Watchdog still does not know final cost of children's hospital

The Department of Health refused to provide a figure due to 'commercial sensitivity'. Picture: Brian Lawless

The State’s spending watchdog still does know what the final cost of the National Children’s Hospital will be, three years after the last estimate put the project at €1.7bn.

Secretary general of the Department of Public Expenditure and Reform David Moloney said it “remains the position” that responsibility for the project budget rests with the Department of Health, which has yet to deliver final cost estimates.

The much-delayed project is now expected to open its doors by the end of 2024, having initially been slated for completion in 2020 at a budget of €650m.

The final cost of the hospital has been a bone of contention for many years, initially due to the shifting estimates. For the past two years, the Department of Health has refused to provide a figure due to the “commercial sensitivity” surrounding the project.

The last official budget estimate for the hospital was delivered more than three years ago and was set at €1.7bn, though the final bill is expected to exceed that figure by a distance.

In a letter to the Public Accounts Committee, Mr Moloney said the Department of Health “has overall responsibility for managing the project within budget and for ensuring that value for money is obtained for the delivery of the new hospital, as part of its oversight role”.

“It remains the position that a definitive estimate of final costings, including the extent of costs arising due to construction price inflation, has not been provided by that department,” he said, adding that the timeline for the management of budgetary claims on the part of the main contractor BAM “is also a matter for the Department of Health".

PAC chair Brian Stanley described the "stock" nature of Mr Moloney's comments as “unacceptable”.

PAC chair Brian Stanley said the hospital 'is due to be complete in the next 12 months... and we’re not getting any closer' to knowing the final cost. Picture: Gareth Chaney/Collins

“It’s not a satisfactory reply,” said Mr Stanley. He said the hospital “is due to be complete in the next 12 months... and we’re not getting any closer” to knowing the final cost.

He suggested that the committee should “re-examine” the matter in the coming months, something his fellow Sinn Féin TD Matt Carthy agreed with.

“The letter answers a question we didn’t ask,” Mr Carthy said. “We didn’t ask for a definitive final cost; we asked for an estimate.

I don’t think it’s a feasible position for the Department of Public Expenditure to say it’s the Department of Health managing this, as it would put into question what the point of DPER is in the first instance if it weren’t managing one of the most expensive public infrastructure projects we’re dealing with.

“It’s coming to the point where we need accountability on this,” Mr Carthy said, adding that the State’s guarantee to pay all construction costs on the project above 4% inflation marks it as “one of the worst public infrastructure projects ever signed”.

It emerged earlier this month that a moratorium on claims taken by BAM against the hospital board was lifted last January and that €480m worth of claims made by the contractor are yet to be resolved.