Children’s Hospital bill rises to €2.5bn
As costs of the vital project spiral, sources say it is just one of many ‘landmines’ left for new ministers by the outgoing government
THE Children’s Hospital could cost as much as €2.5bn because of substantial specification and construction restrictions required due to Covid-19.
It comes after a dispute saw main contractor BAM Construction agree to return to work tomorrow after a row over who would cover the extra costs given the ongoing social distancing requirements.
Sources from the outgoing Fine Gael minority government told the Irish Mail on Sunday that a number of major ‘landmines’ have been left for incoming Fianna Fáil Ministers and the ‘Children’s Hospital is the biggest, a €2.5bn one’.
Although BAM has committed to returning to the site tomorrow there are significant ‘inflationary problems’, according to sources at the Department of Health.
‘The spiralling costs are beyond the control of the builders, the Government or anybody – it’s simply because of coronavirus,’ said a source at the Department of Health. ‘But the fact is costs that were already spiralling way beyond the original estimate are now going to increase further.’
Before the huge construction project at St James’s Hospital shut down due to Covid-19, the projected cost stood at €1.7bn.
However, sources at the Department of Health and Department of Public Expenditure, which monitors Government spending, confirmed to the MoS that ‘specification changes’ may be required in the already underway project.
‘We are looking at what is required, but certain operating rooms and wards may have to be reconfigured to accommodate the changing world we are now in due to the pandemic,’ said a Government source.
‘There is no point in building a state-of-the-art medical facility that isn’t cognisant of the additional sterile and social distancing requirements for Covid-19.’
It is also predicted that all construction projects, not just the hospital, will incur significantly higher costs for the same reason.
‘The Construction Federation itself has said that,’ said a Department of Health source. ‘With all this in mind we are now predicting the total cost of this in the new inflationary period ahead of us will come in at €2.5bn.’ Health Minister Stephen Donnelly faces many challenges and the Children’s Hospital will be one of the biggest.
However, he told the MoS last night that he is happy with the work the hospital’s board has done in keeping costs down.
‘The board has more recently done an excellent job in keeping costs contained as they have related to ongoing claims,’ he said. ‘No additional costs have been agreed at this time.’
Construction Industry Federation Director General Tom Parlon recently told the Dáil’s Covid-19 committee that building costs could rise by as much as 40% because of the new workplace safety measures.
Mr Parlon said the new protocol for building sites, which include measures like physical distancing, would add significantly to the cost of large and complex projects.
Asked by Labour TD Duncan Smith about the impact of new safety measures on projects such as the Children’s Hospital, Mr Parlon stated: ‘Industry people have said that to me that for the most complex ones it could be in the range of 40%.”
Mr Parlon, who did not directly reference the NCH project, gave an example of one site where there would usually be 1,800 workers but that because of the new measures ‘500 to 600’ would be the maximum allowed on site at any one time.
A 40% increase in the cost of the NCH project would bring the final bill close to €2.4bn.
Department of Health sources told the committee that they are already preparing for the budget to hit €2.5 bn.
Mr Smith said: ‘This figure is astronomical. The Irish people have already contributed a significant amount into the National Children’s Hospital, to the tune of €2bn.
‘The Government Procurement Office needs to now publish revised estimated final costs for the National Children’s Hospital and make known how much they anticipate the cost of the project to rise by.’
Mr Parlon also said that the cost of building a house could rise by as much as €15,000 and €20,000 for an apartment because of the new workplace safety measures. He said, in answer to questions from Fianna Fáil TD John McGuinness that, based on conversations with colleagues in Europe, the extra cost would be between five per cent and ten per cent across the sector.
Mr Parlon added that physical distancing measures would also mean that the 15 weeks it usually takes to build a house will increase to 25 weeks and noted that there has been a ‘significant drop in productivity’ on construction sites as a result.
The revelations come after BAM confirmed on Friday they will resume construction.
In a statement it said: ‘BAM has confirmed to the Hospital Board that it intends to resume works
‘Costs are beyond anyone’s control’
on the site from Monday next.
‘It does this in good faith following robust communication with the board and in the interest of completing the rest of the project as quickly and economically as possible.
‘Work will recommence with the safety of all stakeholders as the top priority and with full implementation of the Government’s mandatory Covid-19 regulations.’
Taoiseach Micheál Martin has said he is ‘annoyed’ over the delays. ‘Work has commenced at construction sites right across the country. It is unacceptable, in my view, what has happened here. I would say to people, get back out there on site and start building the children’s hospital because the children of this country need it,’he added. ‘A lot of investment and effort has already gone into it.
‘The only objective has ever been that the children of Ireland would have a world-class health facility that could genuinely cater for our children. I’m angry about this and I think they should get back out on the site. I’m not interested in excuses. I’m not interested in what people are saying and blaming.
‘If they have the interests of the children of Ireland at heart they should get back on site and start building.’
Mr Donnelly agreed and appealed: ‘Please get back on site. At pretty much every building site across the country, contractors and builders are back on site.
‘There are ongoing issues between boards and developers and there are processes to be resolved.
‘The very clear message is get back on site – the children of Ireland need a new hospital.’