New children’s hospital could top €2.5bn and take until 2024
THE final cost of the National Children’s Hospital could spiral to €2.5bn because of the absence of checks and balances on spending on the project, ministers believe.
Meanwhile, there is a growing belief within Cabinet that the latest 2024 end-date for the hospital is at best ‘optimistic’, and that final construction work may not end until the next government is in place.
The Oireachtas Health Committee heard this week the opening of the children’s hospital has been pushed back to 2024.
The Department of Health insisted it does not have a working estimate for the final cost of the hospital, which was due to be completed in August 2022, but sources this weekend indicated taxpayers may be left picking up a tab of up to €2.5bn.
The department conceded that the scandal-hit project now faces delays
‘Equivalent of a runaway Dermot Bannon job’
of more than 14 months.
But one minister told the Irish Mail on Sunday: ‘We will be lucky to see that and more. At this point, the mood is almost “build it and send the bill”. It has become the hospitals equivalent of one of those runaway Dermot Bannon house extension jobs.’
The chief officer of the National Paediatric Hospital Development Board (NPHDB), David Gunning, acknowledged this week the latest delay is likely to add to the final cost, but he would not reveal any estimate or likely figure.
Mr Gunning blamed the pandemic for the latest setback, saying: ‘Because of the Covid shutdown, the estimated date of completion is December 2023, with an estimated opening date in the second half of 2024.’
Director of Infrastructure at the Department of Health Fiona Prendergast added that they could not give an exact final date for completion owing to ‘uncertainties that are out there in relation to Covid and in relation to Brexit, and the fact that we still have two years to run’.
She added: ‘Because it is going to take longer, it is going to cost more. That is the nature of the beast.’
In response, one minister told the MoS: ‘The blunt truth is that we are flying blind on this project. There are no consequences for [building contractor] BAM under the current deal. It is an openended invitation to take the Exchequer for whatever you want.
‘The accounting is almost like Weimar Germany: print enough money and you will get there.’
The current setback is just the latest example of how the project has been beset by delays and cost increases since 1993 when the College of Physicians first recommended the building of a new children’s hospital.
Over the three-decade hiatus, the cost of the project has quadrupled from €500m – with €400m due to come from the Exchequer and the balance being made up by the sale of the National Lottery – a decade ago.
In 2016, Leo Varadkar said the cost would be €650m while insisting the hospital would open in 2020 ‘unless an asteroid hit the planet’.
By November 2018 Simon Harris was told the costs had soared to €1.433bn.
In an indication of a growing sense of unreality surrounding Government spending, one Cabinet source admitted: ‘No one knows where this will end.’
Intriguingly, the minister said: ‘We are not experiencing any blow-back over this, there was a time when a billion would mean something. There would be a furore if the amount being spent on the entire health budget was over by a billion.
‘The voters have no interest in overspending. Insofar as they think about the Children’s Hospital the view is to get it built and get the kids in and we will deal with the costs later. Voters are interested in things like digital certs, green certs, where you can eat or holiday or drink. Overspending on a project doesn’t register with them. They see that as business as usual.’
Another minister said: ‘There is a complete absence of any sense of reality or of consequence when it comes to Government spending. It is only a matter of interest for those who read ESRI reports.
‘This is the age of zero interest borrowing where all the rules are suspended.’
Another Government source said: ‘I dread, though, to think what will happen if interest rates rise.
‘It is essentially coronavirus economics gone mad. We don’t know what the final bill will be. In fact, we are told it is almost bad manners to ask.’