“Fine Gael incompetence on show as PAC cannot be told when or at what cost National Children’s Hospital will be completed” – Matt Carthy
The Fine Gael government were “so incompetent that the Dáil’s Public Accounts Committee (PAC) could not be told the final cost or even a completion date for the new Children’s Hospital”. So said Sinn Féin TD, Matt Carthy, following an engagement with the National Paediatric Hospital Development Board (NPHDB) at a PAC meeting last week.
Deputy Carthy described newly revealed delays and increased costs at the National Children’s Hospital as an utter failure and stated that he has no confidence that further delays will not be measured in years and hundreds of millions of euro.
Teachta Carthy said:
“The Oireachtas last heard from the NPHDB in November of last year when they advised the Health Committee that they were working towards a completion date of August 2022.
“That was a fanciful notion, and they conceded to the PAC that the project is now at least a further 10 months behind.
“With a further ‘service activation’ period estimated at nine months, it will now be 2024 at the earliest before the hospital will open.
“At that same meeting in November, the NPHDB told the Committee that there were 600 claims totalling €200 million levelled by the contractor against the NPHDB. These figures now stand at 700 claims and €300 million.
“Government urgently need to take a handle on these spiralling costs.
“It is absolutely unbelievable that the previous Fine Gael government agreed to a contract that exposes the state to such uncertainty.
“I have genuine concern for what this review will yield in terms of another supposed final cost. It seems certain that it will exceed €2 billion at a minimum. Fine Gael cannot wash their hands of this monumental debacle.”
PAC hearing interaction
Deputy Matt Carthy: To recap, a project is in place that was originally estimated to cost €650 million. In December 2018, the Government approved an investment decision of €1.433 billion. Those costs appear to have spiralled to the extent that it has been suggested that expenditure may reach anything up to €2 billion. The board says that a report will be furnished next month but we are quite a bit into the lifetime of this contract.
Can the witnesses give a sense, say, to the nearest hundred thousand euro, of what the overall cost of this project will be?
David Gunning (NPHDB): We will have to wait for the report to come out. I am not at liberty to share that information. As a bit of background, if I could—–
Matt Carthy: On the basis that the report has not come out, can Mr. Gunning give an estimate to the nearest €1 million, if he cannot to the nearest €100,000, or even to the nearest €100 million? Let us be as broad as that.
Can we at this stage of the project be given even that information?
David Gunning: Given the commercial sensitivity, the other issues we are managing and the relationship with the contractor, I cannot possibly share that information.
Matt Carthy: The Dáil’s Committee of Public Accounts cannot even get a figure, to the nearest €100 million, for how much this children’s hospital will cost.
We learned today that the board has a complex contract in place with a contractor, to facilitate different levels of dispute resolution and conciliation and all that comes with that, yet we heard there have been 700 conciliation claims by the contractor, with a potential outlay of €300 million. We learned that, leaving aside High Court actions, we spent €691,000 and €466,000 on legal costs in 2019 and 2020, respectively.
We are learning – the witnesses might tell me if I am wrong – that the number of conciliation claims on behalf of the contractor will only increase. Despite all that, we still cannot get a specific timeframe for when the hospital will be complete.
Mr. Gunning stated on a number of occasions that he came on board in 2019. Who is responsible for this absolutely scandalous debacle, whereby we have a contract built on quicksand, based on what I can see and what the committee has heard today?
David Gunning: The Deputy has asked a very tough question.
We as the development board are responsible for the delivery of this hospital, including design, build, equipping, commission and handover and that is absolutely what we intend to do. We have four main work streams, as I mentioned. The design element is practically complete and we now need to ensure the design is delivered. We are engaged on that.
The build element is contracted out to the main contractor. On the equipping element, we have already equipped the centre at Connolly Hospital Blanchardstown and we are in the process of equipping the centre at Tallaght Hospital. We are well advanced in the equipping of the national children’s hospital, NCH, at St. James’s Hospital. The commissioning work, which is a complex piece of work, is the commissioning of a highly complex digital hospital.
The planning for that is well advanced. We are well advanced and we just need to get the project progressing. I mentioned that the last of the concrete will be poured in the not-too-distant future. If one drives past the hospital, one will see the progress that is being made. We are making progress although the Deputy is absolutely right; we are not where we need to be.
Matt Carthy: Another member gave the analogy of building a house. If Mr. Gunning had contracted a person to oversee the design, building, equipping and all the other planning issues pertaining to building the house and, when 20% of the works had been done, that agent was not in a position to tell him when the job would be completed or what the final cost would be, would he consider that perhaps he had signed a bad contract and that that is where the fundamental problem lies in terms of the delivery of this project?
Greg Dempsey (Dept of Health): It is probably worth recognising that, since the 2019 PwC report, strong additional measures have put in place by the development board in order to strengthen oversight of the contractor and its process in terms of claims management. Although there were issues in the past, it is fair for Mr. Gunning and his team to state that they have strengthened their oversight and control mechanisms.
There is much uncertainty by the very nature of the cost. We are working through an updated timeline and cost but, in fairness, we should wait until we actually have assessed it and can discuss it confidently. That is why we are proposing to come back before the committee to do that work.