CHAOS BEHIND NCH FINAL BILL
● Total spend will go ‘way over’ €2bn says hospital insider ● ‘Nobody can tell you how much it will end up costing’ ● PAC vice-chair says money will run out ‘early next year’
THE final cost of the National Children’s Hospital is set to be well north of €2bn, an insider has told the Irish Mail On Sunday.
And the massive final bill has less to do with pandemic-related delays and construction inflation than the fact that contracts were awarded before plans were completed, according to a source who has worked on the project.
It comes as pressure mounts on Health Minister Stephen Donnelly and secretary general at the Department of Health Robert Watt over a lack of transparency on the costs.
Public Accounts Committee chairman Brian Stanley was sharply critical this week of the ongoing refusal of Mr Watt to provide the committee with sufficient information on the ‘live status of the current budget’.
And his vice-chair, Social Democrats coleader Catherine Murphy, told the MoS the State will run out of money for the
completion of the National Children’s Hospital a year before the contractors expect to leave the site.
Originally, the contract with the developers had a scheduled completion date of December 2023 with a final bill rising to €1.73bn.
However, construction delays and legal conflicts mean this could extend out to the end of 2024 with uncertain fiscal consequences.
A construction executive who worked on the project told the MoS this week that the site is still chaotic.
‘There are contractors working on that job today who don’t have a design.
‘The Government can attempt to massage figures to underplay the final spend but the true costs will certainly go way over €2bn.’
The source said when he was working on the project, he was ‘sitting in an office, and there were lots of people on the job and they didn’t have a design and they were already on site’.
He said the design issues were ‘at the heart and the root cause of a lot of the problems on that job’.
‘Plus, the original allowances, a lot of it wasn’t designed. So you had quantity surveyors making assumptions and putting figures against things, which had turned out to be multiples wrong.
‘Not wrong because they didn’t know, but when the design was actually done, the level of finish, the cost would have spiralled in comparison to original estimates.
‘It was always going to. If you design an external facade that’s completely curved and made of glass, you’re only asking for trouble.
‘It was never going to even remotely come in at the original figures. You don’t need to be a rocket scientist to know that. Anyone who gives an answer is basically just lying to you.
‘It’s not a figure anyone could give with any science whatsoever.’
The project is also being delayed by more than 1,000 claims and adjustments submitted by the contractor with a value in excess of €500m.
Commenting on the challenging fiscal landscape, Ms Murphy said: ‘The NCH is probably going to be the most expensive hospital in the world. We don’t know what the ceiling is.’
She expressed special concern over the HSE running out of money at least a year before the end of the current contract.
The final amount budgeted by the HSE for the build is €1.73bn.
But, she said that ‘given this is not now scheduled to complete until 2024, there will have to be further intervention by the Government’.
Commenting on the current budget allocated to the hospital, she said: ‘Early next year the pot will be empty. There will be nothing to draw-down. The Department [of Health] will have to go to the taxpayer again looking for another pot of money.’
As speculation over the final bill spirals, concern is rising within the PAC that the State’s primary accountancy body is being ‘left in the dark’ over the final costs of the National Children’s Hospital.
Both Mr Stanley and Ms Murphy were sharply critical of the ongoing refusal of Mr Watt to provide the committee with sufficient information. They were referring to a key review into the NCH by the National Paediatric Hospital Development Board (NPHDB) and the Department of Health.
Originally the PAC was promised access to the report but, on the accession of Mr Watt, this was withdrawn on the grounds of ‘commercial sensitivity’.
Mr Stanley told the MoS that ‘in the absence of the report the spend is open-ended and the taxpayer is utterly defenceless’.
The Sinn Féin TD added: ‘We were promised sight of that report a year ago and the committee has yet to see it thanks to the opposition of Mr Watt.’
Mr Stanley warned that when it came to the issue of escalating costs ‘at this late stage the State and the taxpayer have been put in a bad place by the two-stage process’. He added: ‘Realistically it is impossible to move BAM [the main contractors] off. That ship has sailed.
‘Even if BAM were removed, it is more difficult still to get a new contractor in a situation where everything is bogged down in litigation.’
The situation, he said, had ‘not been improved by the scenario where, when it comes to the provision of information, we are fighting with one hand tied behind our backs. We are utterly operating in the dark. We are restricted in the information we can secure’.
The PAC is especially concerned over the role played by Mr Watt who headed the Department of Public Expenditure when the current contract was signed. Mr Stanley said: ‘It is less than satisfactory that the person who essentially decided and had responsibility for the contract has taken the decision to deny access to the PAC. We have drawn a blank on all levels.’ He added: ‘When it came to a cost above €2bn, Robert Watt could not guarantee it wouldn’t go past that.’
The chairman said: ‘My judgment from the information is that the second half of a contract can be far more costly.’
Deputy Murphy also slammed the culture of secrecy surrounding the provision of information.
She said: ‘We are getting the accounts in retrospect – we are not getting real-time information.’
And in a signal of potential future spats, she said: ‘Contracts are a two-way process. There is an obligation to hold on to a timeframe. Because of the contractors’ delays we have walked into an inflationary spiral. Someone has to be held accountable for this.’
Earlier this year, a source close to the hospital project admitted to the MoS that the costs of construction were ‘galloping away’.
He agreed that the revised €1.7bn price tag was now ‘unrealistic’.
He said: ‘The goalposts have changed many times since we started this project but the last 12 months have seen the biggest challenges of all.
‘The construction costs are soaring. We had Brexit and we had the pandemic, and labour shortages. Now the pandemic is over but the housing crisis means Dublin is not an attractive place to be. The estimated final cost for the entire project being floated last year was €1.7bn – that’s unrealistic now.’
Neither the Department of Health nor the NPHDB commented when contacted about the constuction insider’s claims. BAM also did not reply to our request for comment.
‘Contractors working on the job with no design’