Former National Roads Authority head Fred Barry is to be appointed as chairman of the National Paediatric Hospital Development Board, Minister for Health Simon Harris said.
He replaces Tom Costello who on Sunday announced he was stepping down from his position following the controversy over the escalating cost of the project.
Revelations of an increase in the cost of building the hospital from €987 million last year to €1.4 billion now have sparked a growing political controversy. When other costs are added, the project is expected to cost €1.73 billion and possibly more.
PWC has been tasked with identifying the “underlying root causes” that led to the escalation.
Mr Barry has vast experience in managing complex projects, according to a press release from the Minister.
“I want to thank Mr Barry for taking up this role. The National Children’s Hospital is the most significant investment in children’s healthcare in this country,” Mr Harris said.
“Mr Barry’s experience and leadership will be invaluable to ensuring the next phase of this project is delivered for future generations.”
Mr Harris also said the terms of reference for the PWC review has been finalised.
“The review will be completed the end of March, and will inform any governance or other changes required. The review will deal with the accountability of the relevant key parties, functions and roles,” his statement said.
Earlier today Taoiseach Leo Varadkar has rejected claims by Labour leader Brendan Howlin that the Government's representative on the board of the National Children's Hospital should have informed the Minister for Public Expenditure Paschal Donohoe of serious concerns about costs.
Mr Varadkar said the line of responsibility was from the chairman of the board to the Minister and “not the individual board member acting on their own”.
Pressure on Mr Donohoe increased in the Dáil over when his state of knowledge of serious cost overruns at the hospital when Mr Howlin cited a Department of Finance circular from 2010.
“We’ve been told that the civil servant appointed to the National Children’s Hospital development board was there in a personal capacity. That’s not true,” Mr Howlin said.
He said the 2010 circular was “crystal clear” that informing the Minister “overrides any confidentiality” the board member might have towards the board.
He said that the circular showed that “ civil servants appointed to non-commercial boards must inform the Minister if a matter of serious concern arises”.
Mr Howlin said “the Minister must be notified without delay when there are serious weaknesses in controls despite being brought to the notice of the chair of the board”.
Mr Howlin stated Fine Gael clearly “no longer cares about fiscal prudence”.
The Wexford TD also questioned how Mr Donohoe could not have known until November about the rising costs of the hospital from €938 million a decade ago to €1.73 billion or more.
“How is it plausible that the Minister for Public Expenditure was unaware of cost overruns until November ?
“Mr Harris said he was aware in August. Did it really take three months for Mr Donohoe to be informed?” Mr Howlin asked.
“Mr Donohoe either knew what was going on and did nothing, or else he did not know until November. It is unimaginable that the Minister for Public Expenditure was kept in complete ignorance of public expenditure. Surely he would have received monthly if not weekly updates on progress of a project this significant. Why did it take three months?”
Change in corporate governance
There were repeated interventions when Mr Varadkar first said that while costs should rightly be questioned, people should remember the value of the hospital and that the Government would deliver a project that had been promised since the 1960s.
He also said that corporate governance had changed considerably since 2010.
He said the Minister for Health Simon Harris was first made aware of rising costs in August and “did the right and appropriate thing” by getting the full information and facts and figures before presenting it to Government.
That took 10 or 12 weeks and when Mr Varadkar was informed in November his reaction was “disbelief” and Mr Donohoe was informed at around the same time.
They looked at options but believed that by suspending it, it would be further delayed and cost even more, Mr Varadkar said.
He said re-tendering, reducing the specifications and other options were also considered.
He said that “in terms of corporate governance, it has has changed quite a lot since 2010”.
Mr Varadkar insisted that “if somebody is on a board their fiduciary responsibility and their legal responsibility is to the chairman of the board
“And the correct line is for the chairman of that board to the line Minister not individual board members acting on their own part”.
