Construction inf lation at hospital project ran at over 50%

CONSTRUCTION inflation at the National Children’s Hospital was 56% over just 18 months, a report released last night declared.

The analysis by Mazars, the firm commissioned by the hospital itself, showed the huge jump from April 2017 to October 2018 – at a time when actual construction inflation in the economy was 6%.

The Ceann Comhairle repeatedly had to interrupt the Dáil debate last night to object to the naming of the main contractor, with Mick Wallace declaring under Dáil privilege: ‘They are going to rob us blind.’

The chair said the company was not in position to respond.

Health Minister Simon Harris told the Dáil: ‘We were badly let down here, and we need the PwC report to identify where.’

The hospital itself had assumed inflation would be 4% in the same period, said Fianna Fáil health spokesman Stephen Donnelly in the Dáil last night.

Mr Donnelly said that €240million in additional costs are ascribed in the report to calculations that were ‘got wrong by the design team, which then did not signal the looming overrun’. There was nonetheless a 60% increase in fees for the design team itself, he added.

Mr Harris said: ‘If it was simply a matter of inflation, we wouldn’t need an inquiry. While inflation is a piece of this, it does not explain it all.’

He said the Government was awaiting a separate PwC report into the entire affair, which will be published at the end of next month. ‘If the report indicated that there was a failure of any professional firm, they would be pursued vigorously,’ he said.

Róisín Shortall of the Social Democrats said that it was not credible that Mr Harris had not told his Cabinet colleagues of the overrun for two months.

Mr Harris said the Government took the overrun ‘extremely seriously’, and when the scale emerged there was a high level of work to discover the full position.

‘I absolutely reject the idea that partial information leads to better decision-making,’ he maintained.

The new hospital would result in increased capacity and treatment, including a 16% increase in available in-patient beds, he said.

But he added that taxpayers ‘want to be assured, as does Government, that their investment is being managed efficiently,’ he said.

‘The review will deal with accountability and this will inform appropriate next steps. The Government will then act swiftly,’ Mr Harris said.

He said he would ‘not be found wanting’ in taking action against any company or entity to which fault was found to attach.

Earlier yesterday Finance Minister Paschal Donohoe admitted on RTÉ Radio 1’s Morning Ireland that ‘something did go wrong’ with the hospital budget and costs, and the Government was awaiting inquiry findings, adding that he was not in a position to guarantee that the price wouldn’t go up further.

Meanwhile Construction Industry Federation chief Tom Parlon said that the Government would continue to have problems with firms ‘lowballing’ with contracts if it continued to have unrealistic expectations on price and chose to award contracts to the lowest bidder.

‘We were badly let down here’