National children’s hospital: No children will be treated in new facility for at least 18 months, expert says

A public procurement expert has warned that it would be at least 18 months before the first child is admitted to the new children’s hospital.

Dr Paul Davis, assistant professor in Dublin City University, told RTÉ radio’s Today with Claire Byrne show that since there was not a completed design when the project went to tender, the contractor was legally entitled to make claims. Earlier the Minister for Health Stephen Donnelly told Morning Ireland that the board of the hospital was fighting 2,000 claims amounting to over €760 million from the contractor BAM.

“Under the terms of the contract where there are changes to the contract they are entitled to put claims in. Given that we didn’t have a design in the first place when we actually went out to contract, there were going to be changes to the design. So what we have is €760 million of claims based on the design that wasn’t there. So it’s understandable that that has escalated over the years.”

Dr Davis pointed out that the original agreement was that additional costs would be covered to seven per cent above inflation, but that at times the building’s inflation had been in excess of 20 per cent. “Because they didn’t have the design there for any changes that were being made as they went along, they were actually having to pay for those as well. So it was an open cheque book, unfortunately.”

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Prior to Covid and the war in Ukraine, both given as reasons for delays and escalating costs by the minister, there were already excess claims, added Dr Davis.

“The design was already coming under question in 2019, with PriceWaterhouseCoopers talking about the project management of the hospital board and the lack of project management skills and the lack of project management ability.”

The National Children’s Hospital was “an outlier” globally in terms of cost and was now one of the most expensive buildings in the world. “Given it’s a hospital, which will be a fairly standard process because many hospitals are built around the world, it’s very much an outlier in the way that we project managed it and the way that we’ve actually gone out to tender for it.

“We literally went into the marketplace without a final design and without a final budget in place. So the outlier being that we handed over a design process to a group of people.”

Dr Davis questioned if it was “politically expedient” not to announce a completion date, given that there could be a general election next year.

“There’s still a further probably 18 months before we actually see the first child admitted at this stage. Had it been within a couple of months, then we probably would have expected the board to have approved it (a completion date). But given that it probably is not within a couple of months of May next year, nobody really wants to announce the date, I suspect, because there’s an election due next year.”

[ National Children’s Hospital timeline ]

Dr Davis said it had been “glib” for the Minister for Health to say that the hospital was 90 per cent complete, with the remaining 10 per cent involving mechanical and electrical works, as he told Morning Ireland. “We need more detail on this,” Mr Davis said. “I think it’s the responsibility of the board to publish a much more comprehensive plan of when they believe it’s going to be finished and more importantly, when are we going to see the first children being treated?”

Mr Donnelly had earlier spoken of his deep frustration at the ongoing delays.

“There has been intensive engagement between the board and the contractor in recent months,” Mr Donnelly said.

“The contractor had submitted a completion date of March of next year. That’s what we were all looking forward to. Then they resubmitted one to say it wouldn’t be March, it would be May. They then resubmitted again with another date, which the board at this point is not accepting and is in very intensive engagement with the contractor on this.”

The Minister rejected the suggestion that the board was helpless, they were doing a “very commendable job” and they were fighting the 2,000 claims from the contractor. To date €12 million has been awarded, and the board would continue to fight the claims and keep costs down.

[ Just 27 rooms at National Children’s Hospital finished out of 3,000, committee hears ]

Three factors had led to the delays, Mr Donnelly said – the pandemic, the war in Ukraine and the necessity to fight the claims. The contractor was seeking an extra €760 million. “The board obviously is saying ‘you’re not getting anything like that’. And that’s an ongoing intensive interaction between the board and the contractor. Some of it is in the courts, some of it is in the dispute resolution mechanism set up within the contract.”