PAC to probe rising €1bn NMH costs
Minister says he’s unaware of outlay on new maternity hospital as bill concerns mount
HEALTH Minister Stephen Donnelly claims he does not know how much the delayed National Maternity Hospital will cost taxpayers as members of the powerful Public Accounts Committee warned the final bill for the project will exceed €1bn.
And the Irish Mail on Sunday has learned the powerful Dáil spending watchdog is considering exercising its powers of compellability to secure details of a review into the escalating costs of the National Children’s Hospital, which Mr Donnelly also claims not to be aware of.
The committee is growing increasingly concerned over the cost of the National Maternity Hospital (NMH,) which was estimated would cost €350m just five years ago. This escalated to €800m by mid-2021 and it is now believed the final bill will cost at least €1bn.
Social Democrats co-leader and PAC deputy chair Catherine Murphy this weekend expressed concerns that the mistakes made in the Children’s Hospital project, which has been beset by constant delays and cost overruns,
‘There is huge unease we are heading towards €1bn’
will be repeated.
Ms Murphy told the MoS: ‘The National Maternity Hospital, which was earmarked as costing €350m in 2017, is now being talked about as a project of the same scale [as the children’s hospital] costing €1bn. People forget when the National Children’s Hospital started we were told that selling the lottery licence would pay for it.
‘I want to see evidence as to how a bill for €350m [for the NMH] has turned into €1bn. This is especially the case given that there are no land acquisition costs and the site is far more accessible.’
Ms Murphy said she is concerned no one from the Department of Health has been able to provide an answer to the committee’s queries on the latest projected cost of the maternity hospital.
She told the MoS: ‘No one has come to us with a cost. How the NMH has increased from €350m to €1bn is now a priority. We cannot end up in the situation where another big hospital project runs out of control.’
PAC chairperson Brian Stanley added: ‘There is huge unease we are heading towards €1bn. It is critical that we don’t end up in a similar situation to the Children’s Hospital with the NMH. We need to ensure we do not.’
Despite taking the decision to push ahead with the construction of the NMH on the grounds of St Vincent’s University Hospital in south Dublin, Mr Donnelly said he does not know what the cost of the project will be.
In response to a parliamentary question from his Fianna Fáil colleague Niamh Smyth on the subject, the minister said estimates of the final costs could not be made.
Mr Donnelly said: ‘The business case to support the capital project to relocate the National Maternity Hospital to the St Vincent’s University Hospital Campus is progressing.
‘A final business case has been submitted to the Department by the NMH Project Board and is now subject to technical review by the Department of Health, including the External Assurance Process for major capital projects recently introduced by the Department of Public Expenditure and Reform.
‘The final decision to proceed with the construction and therefore to estimate the final cost for the new NMH cannot be made until the tender process has been completed and the costings reviewed to ensure that the proposal delivers value for money and remains affordable.’
However, Sinn Féin health spokesperson David Cullinane said it appears ‘expensive lessons’ from the State’s inability to control the cost of the Children’s Hospital have not been learned, which he said is ‘a matter of the gravest concern’.
The Waterford TD told the MoS: ‘Already costs for the maternity hospital have spiralled from €350m to €1bn and could exceed that figure.
‘Before Stephen Donnelly signs on the dotted line for the National Maternity Hospital we really need to see the business case and the costs and timetable, if they even exist.’
Meanwhile, the PAC is considering exercising its powers of compellability in a bid to obtain details of a review that was conducted a year and a half ago into escalating costs associated with the children’s hospital.
Department of Health secretary
general Robert Watt has refused to issue the report on the grounds that there was an ‘extremely high likelihood that any discussion on costs or dates, however hypothetical, even from the draft stages of the process, would prejudice enforcement of the existing contract.’
However, amid growing concerns that the cost of the National Maternity Hospital is heading for similar huge overruns, the committee is poised to force Mr Watt’s hand.
Compellability is exercised rarely by committees. One senior political source told the MoS: ‘It is the nuclear option, normally it needs the sanction of the Dáil but in the case of the PAC its special position means it only needs the Committee on Procedures.’
Ms Murphy criticised the response from the Department of Health and Mr Watt to the committee’s request for information.
She told the MoS: ‘Increasingly, when it comes to accountability and the PAC there appears to be a culture of obfuscation and passing the buck. We are being managed and it has to stop.’
Mr Watt will face another grilling on the issue this week when he is due to reappear before the committee.
Expressing concern about the soaring costs of the children’s hospital, committee chair Brian Stanley said: ‘When it comes to cost everyone is at sea.
‘The Public Accounts Committee are in the dark. The committee, the people and the Oireachtas are entitled to this, and the committee is charged with these matters.’
When asked if the Dáil spending watchdog would use its powers of compellability, Mr Stanley said: ‘We are not ruling out anything. We have to use each and every power we have.’
He said: ‘It is regrettable, but this report is now a year and a half old. There needs to be far fuller levels of transparency and disclosure.’
The Laois-Offaly TD said that while commercial sensitivity is an issue, ‘a greater public interest now lies in telling the taxpayers and the public what the final cost of the National Children’s Hospital will be.’
Earlier this year Mr Donnelly confirmed the total programme costs for the hospital had risen to €1.73bn, up from the €1.433bn capital budget approved in 2018.
However, sources close to the project recently told the MoS figure that ‘galloping costs’ due to hyperinflation have significantly added to the revised budget.
There are also concerns over the potential cost of claims taken by the main contractor, BAM, which have risen from a previous figure of 920, with a value in the region of €500m, to more than 1,050.
‘We are being managed and it has to stop’