€50m healthcare project in jeopardy as developer tells HSE it is unviable at price

● Swords development on hold ● HSE won’t budge on agreed cost

A major €50m day-care hospital and primary care centre project in north Dublin is in doubt after a developer told the HSE the project is not viable at the agreed price.

The eight-storey development at Airside in Swords – which has full planning permission and was expected to attract patients on waiting lists for a range of procedures – is at a standstill due to a standoff over construction costs.

The HSE’s refusal to budge on an already agreed tender price for the long-term rental of the primary care portion of the new complex has put the entire project on hold and is an issue that has stymied the nationwide rollout of a primary care network, the Sunday Independent has learned.

A HSE spokeswoman said “the provision of a new primary care centre in Swords is a priority”.

But she said that following a review of its operational lease model, “legal advice requires that the HSE request that landlords and developers proceed in accordance with the terms of their priced offers”.

Negotiations were “at an advanced stage” after “the preferred provider for the new centre in Swords has indicated a potential issue regarding the economic viability of the project”.

“Should the preferred provider be unable to proceed, the HSE will be exploring all options to deliver a new primary care centre including potential site acquisitions for a development or re-advertisement.”

Although the negotiation only pertains to the primary care centre, it is seen as a key anchor tenant for the entire €50m development, without which it is unlikely to proceed.

Developer Vanguard International originally won the HSE tender for the long-promised new primary care centre. It obtained options on the land at Airside and brought the project successfully through the planning phase. The development was expected to go ahead just before the pandemic but was delayed.

Legally binding agreements have since been entered into between Vanguard and another developer, Remcoll, regarding the sale and development of the entire project. But the sale to Remcoll of the project has been unable to progress due to the ongoing standoff with the HSE over the uplift in the cost.

“Swords is a town with a population of circa 41,000 and predicted to grow to 100,000,” said local Fine Gael Councillor Tom O’Leary. “The area needs a substantial primary care centre. The HSE needs to agree a realistic rent as it had been agreed four years ago and construction inflation has been over 25pc since.”