New national children's hospital costs reach €1bn – as construction continues 2 months ago

New national children's hospital costs reach €1bn – as construction continues

There is still almost a year and a half to go before building work is due to be finished.

However – three-quarters of the construction budget has now been spent as costs top €1bn – and yet the new National Children's Hospital is still a long way from being finished.

The projected cost for the new hospital at the site at St James's Hospital in Dublin was originally set at €800 million back in 2014 – but it did not take long before that budget was blown, and according to the Irish Times, costs have now topped €1 billion out of the €1.433 billion approved for the construction phase of the project according to figures provided to the Dáil’s public spending watchdog.

Another €300 million is expected to be spent on the integration and transfer of services from the existing three children’s hospitals in Dublin including information technology and commissioning costs bringing the total expenditure to €1.73 billion.

However, a note to the Public Accounts Committee (PAC) accompanying a letter from Department of Health secretary-general Robert Watt says that a definitive update on the costs cannot at this stage be provided.

The spending watchdog's chair, Brian Stanley, told a meeting of PAC on Thursday that the latest update was concerning given the project potentially has another three years to go until completed.

Pandemic delays

The PAC was told earlier this year that construction of the new National Children's Hospital at the St James’s Hospital site is expected to be substantially complete by the end of January 2024.

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But according to sources, thanks to several devastating delays, it could well be 2025 before the hospital is up and running.

Pandemic delays, inflation and other factors like Brexit are said to have impacted on the supply of goods and services, and this in turn will increase construction costs.  Opposition politicians have long suggested that the total spend on delivering the NCH could exceed €2 billion.

The Department of Health note says:

"Brexit, the pandemic and recent geopolitical developments have severely impacted construction industry supply chains and more general economic challenges — the NCH project is not immune to these external challenges.”

It adds:

“Every effort is being taken to mitigate the risks but these externalities beyond the control of the contractor and the NPHDB make speculation and more definitive forecasting unwise.”