Letter sent by board reveals €83m spend on Children's Hospital building costs in five months

Taoiseach Leo Varadkar has been urged to "guarantee" the cost of the new children's hospital will not exceed €2bn after the project's board admitted the full price will not be known until construction work is completed.

The new transparency demand was made after hospital officials said there "cannot be price certainty" until the project finishes and confirmed they have appointed a "conciliator" to address "significant potential costs" and "additional [price] claims".

In a letter to the Dáil's public accounts committee seen by the Irish Examiner, the national paediatric hospital development board said between March and the end of August construction costs rose from €314m to €397m.

In the letter, the NPHDB's chief officer David Gunning acknowledged the spend but, "these costs are within the budget approved by the Government in December 2018".

However, Mr Gunning added that due to the project's scale and issues around it "there are a number of exceptions that have always been outside of the approved budget, and for which there cannot be price certainty at this point or for the duration of the project".

And in a further acknowledgement of the costs crisis which risks engulfing the children's hospital project, he added: "The NPHDB is also reviewing significant potential costs as additional claims are presented from the contractor.

"The NPHDB is diligent in its examination of these claims and is providing a robust defence in relation to these in line with the PwC recommendations the board has implemented.

"In addition, and in accordance with the construction contract, there is a dispute management process in place to deal with these claims through the appointment of a standing conciliator."

The PAC letter comes just 24 hours after Taoiseach Leo Varadkar told the Dáil companies involved in the construction of the new children's hospital have submitted new pay claims, saying they "have to be adjudicated on".

Speaking to the Irish Examiner tonight, Labour health spokesperson Alan Kelly and Social Democrats co-leader Catherine Murphy called on Mr Varadkar to clarify the exact situation facing the taxpayer after the latest update from hospital officials.

"The Taoiseach said I was exaggerating when I said earlier this year the cost will exceed €2bn. I challenge to guarantee it won't, because he can't," Mr Kelly said.

Ms Murphy added it seems inevitable the €1.7bn planned project cost will now be exceeded.