The extraordinary overrun in the cost of building the national children’s hospital requires a full explanation and a reassessment of how major public capital projects are dealt with. The sound of recriminations and blame-shifting now fill the air, but the litany of issues that have dogged the project will be repeated unless the right lessons are learned.
The fact that more than a decade of medical infighting, political intrigue and planning mistakes preceded a final decision on where to site the hospital was a portent of trouble. The National Paediatric Hospital Development Board to oversee the project was established in 2007 but construction work only began 10 years later.
The estimated cost of building the hospital then rocketed from €983 million in 2017 to €1.433 billion today. That the final bill could be much larger again and might even top €2 billion is alarming, and would make it one of the most expensive hospital in the world .
One aspect that seems clear is that BAM, the construction firm that successfully tendered for both phases of the project, was awarded the contract on a bid that was far too low. With the tender being decided 75 per cent on price and 25 per cent on quality, BAM was certain to win as it came in 20 per cent cheaper than the next lowest bid.
Serious questions
Fianna Fáil TD John Brassil is right to suggest that this should have led to serious questions being asked. "BAM, knowing that if it got in it could not be removed, bought the contract with the aim of recovering its costs at a later stage," he suggested, under privilege, at a meeting of the Oireachtas health committee last week.
Another mistake was to split the contract into two stages with separate tender processes for building the foundations and another for completing the structure. In addition, the complex layers of oversight and management put in place over a period of years also contributed with, it seems, no clear demarcation of who precisely was in charge of what.
Ireland is not unique in experiencing such a cost overrun on a major public project. The most spectacular of all is probably Berlin Brandenburg airport, which was initially supposed to cost €2.8 billion and is now estimated at €8.5 billion. Its opening was postponed in 2012 and it will not be completed until next year or the year after. Rather than excusing events here, such experiences underline the need for the most rigorous approach to intrastructural development.
The resignation at the weekend of the children’s hospital board chairman Tom Costello was inevitable. But wider questions of reponsibility and accountability remain over the framing, management and oversight of what is such an essential project. As the blame game intensifies, Minister for Health Simon Harris might usefully take the lead by starting to provide answers.