Right strategy was taken, says children's hospital board

The National Paediatric Hospital Development Board has defended the additional construction costs of the new children’s hospital, insisting that the “right procurement strategy” had been taken.

Project director John Pollock said they always intended that it would be one of the finest children’s hospitals.

“In 2016 this was the right procurement strategy and today having interrogated it again, it remains the right procurement strategy,” he said.

The Government has launched an independent review of the cost of the project, which has now reached €1.43bn.

Board chairman Tom Costello said they “fully appreciated” the significant cost difference between the first investment decision and the one approved by the Government.

“There have been a number of challenging factors, which, when combined, have resulted in additional costs for this long-awaited project and we will fully co-operate with the independent review of that process,” said Mr Costello.

The board tendered the children’s hospital contract in 2016 using a two-stage procurement process that allowed construction to start as early as possible.

However, it had resulted in “significant additional construction and associated costs” resulting in a higher overall cost than they envisaged when submitting their business case to Government early last year.

Other cost drivers included finalising the materials and fixtures required in each of the 6,000 rooms, changes in the fire regulations following the Grenfell Tower fire in London in June last year, and the need to install additional sprinklers following a decision by An Bord Pleanála.

Mr Pollock said they believed that all steps that could be taken to mitigate current and future costs had been taken.

They now had an agreement with the contractor that would ensure that a quality project would be delivered to the people of Ireland in the shortest timeframe possible.

The overall construction programme has been extended from 48 months to 57 months, with the hospital on track to be completed by the end of 2022.

Mr Pollock said that if the cost was “stripped back” to the construction costs of the children’s hospital, it was €890m and that included a three-level basement with 1,000 car parking spaces and third-level educational facilities.

He said the cost worked out at €1.8m per bed but that was a crude benchmark because it depended on the area of the building.

“Cost per square metre is a more normal benchmark for comparing construction costs across projects and we are the upper end,” he said.

But we have done a benchmarking study comparing with hospitals in Europe and the States of a similar level of scale and complexity. It is an expensive hospital but certainly, on a cost per square metre it is not the most expensive.

Mr Costello said that the contractor would have an opportunity from next year to recover some, but not all, of the construction inflation — that would depend on what happens in the marketplace, he said.

He also compared managing the project to driving an ocean liner.

“Once you set in a direction with the design, it is difficult to turn because sometimes turning is the exact wrong thing to do and infinitely more expensive,” said Mr Costello.