€1bn cost overrun for new Children's Hospital

klaaaz · 19-12-2018 1:24pm #1

The new Children's hospital that was announced by FG a few years ago to cost €485m has now shot up to over €1.4bn, who knows how many more billion it will cost if and when it's finished. Expect a tribunal in a decade's time to find out who is really benefiting from the explosion in costs, it's all murky in the making of a financial scandal.

https://www.rte.ie/news/health/2018/1218/1017899-national-childrens-hospital/

"It may turn out to be one of the most expensive children's hospitals in the world but it is also going to turn out to be one of the best," Mr Varadkar said.

You read that right, a world first in that Ireland has managed to produce the most expensive hospital in the world! Marvellous statement from one of the most expensively paid leaders in the world who lives off the taxpayer.

thecomedian · 19-12-2018 1:25pm

BAM

19-12-2018 1:29pm

1. Who is going to make the additional profit from this?
2. What tax rate will they be paying on the additional profit?
3. Will all that tax be paid to this state?

ARNOLD J RIMMER · 19-12-2018 1:29pm

klaaaz wrote: »

The new Children's hospital that was announced by FG a few years ago to cost €485m has now shot up to over €1.4bn, who knows how many more billion it will cost if and when it's finished. Expect a tribunal in a decade's time to find out who is really benefiting from the explosion in costs, it's all murky in the making of a financial scandal.

https://www.rte.ie/news/health/2018/1218/1017899-national-childrens-hospital/

You read that right, a world first in that Ireland has managed to produce the most expensive hospital in the world! Marvellous statement from one of the most expensively paid leaders in the world who lives off the taxpayer.

Is this the first time you've noticed a project going over budget in Ireland?

buried · 19-12-2018 1:32pm

Hmmm Anyone in some semblance of authority going to take some responsibility for this?

twinytwo · 19-12-2018 1:33pm

One thing that is seemingly never introduced in government contracts is fixed pricing. If the build goes over budget there should be penalties in place.

Deebles McBeebles · 19-12-2018 1:33pm

buried wrote: »

Hmmm Anyone in some semblance of authority going to take some responsibility for this?

Good one.

twinytwo · 19-12-2018 1:34pm

buried wrote: »

Hmmm Anyone in some semblance of authority going to take some responsibility for this?

Ha no politician knows the meaning of the word

buried · 19-12-2018 1:35pm

twinytwo wrote: »

Ha no politician knows the meaning of the word

The Fine Gael groupies sure like to use that word in the Strokestown thread

zl1whqvjs75cdy · 19-12-2018 1:36pm

Well I for one am shocked........ The original costing was obviously ridiculous. I drive past that on a regular basis and the groundworks alone must have devoured 30 million. The way tenders work for public contracts is lowest price wins 99% of the time. So bam come in with a tender of 450 mill, knowing full well that it's going to cost 3 or 4 times that. But by the time that's discovered they are already committed to the job and no one is ever held accountable for the tender process. The system itself is not fit for purpose.

thecomedian · 19-12-2018 1:38pm

donkeyoaty0099 wrote: »

Well I for one am shocked........ The original costing was obviously ridiculous. I drive past that on a regular basis and the groundworks alone must have devoured 30 million. The way tenders work for public contracts is lowest price wins 99% of the time. So bam come in with a tender of 450 mill, knowing full well that it's going to cost 3 or 4 times that. But by the time that's discovered they are already committed to the job and no one is ever held accountable for the tender process. The system itself is not fit for purpose.

Exactly this.
Lowest price gets in and then after that there’s nothing they can do.

DS86DS · 19-12-2018 1:39pm

The ignorance and stupidity of FG for placing this next to St. James A&E where half the junkies in Dublin pay a trip to.

It's a completely inappropriate location for a children's hospital.

griffin100 · 19-12-2018 1:42pm

thecomedian wrote: »

BAM

^^^^^^^^^^ This

kneemos · 19-12-2018 1:47pm

There are some genuine additional costs for new regulations and facilities.
All of these major projects end up costing multiples of the original price however.

seamus · 19-12-2018 1:50pm

I do think it's important to get facts in place. ~€450m was the initial estimate. €650m was another estimate after planning was approved.

But what was the tendered price? €1.4bn according to the Government? OK, that's pretty insane, but if that's the tender price, then really what it means is that whoever gave the initial two figures of 450/650 is basically incompetent and needs to be fired.

I recall at the time of the Luas works, the same issue arose, but the same question of what figures were actually the right ones.

If a price is estimated at one cost, but when it goes out to tender the prices you get back are much bigger, then the person who did the initial estimate made the screw up, not the people doing the tenders. But if it's tendered at €650m and they come back looking for €1.4bn, then the contractor is taking the piss and needs to be reined in.

listermint · 19-12-2018 1:51pm

Building a Large Hospital in the middle of a city with highly complex groundworks and environmental conditions inside quite a small narrow footprint.

In costs alot of money shocker.

The people that made this decision need to come out and own it and apologise. We all knew / know that the sites in Blanchardstown and Tallaght were more suitable on all points. But it seems an elite group within the decision making had a higher pull of the power strings.

Tbh mainly appears to be staffing related / consultants etc unwilling to be outside the M50 loop.

And this is the results we get.

JohnnyFlash · 19-12-2018 1:53pm

I presume some shower of suits from EY, Deloitte or KPMG came up with the initial figure?

mariaalice · 19-12-2018 1:56pm

The was an economist on RTE radio this morning saying how come costs for food, air travel ect is falling but medical and construction inflation is racing ahead, however he forgot to add its the same all over the world, he also tried to intimate a few other things that are nonsense, the Guy on Newstalek was a bit more nuanced in saying its not as simple as it seems. It was costed incorrectly from the start but no one wants to hear that answer.

klaaaz · 19-12-2018 2:03pm

That's what a party in govt do, announce a price that seems "we're doing a great job" and then the story goes away for a few years while the costs escalate to benefit an elite few. This smacks of corruption, can't wait to hear about who actually benefited financially from this project in the year 2040 when tribunal after tribunal try to delay the truth coming out.

mariaalice · 19-12-2018 2:08pm

klaaaz wrote: »

That's what a party in govt do, announce a price that seems "we're doing a great job" and then the story goes away for a few years while the costs escalate to benefit an elite few. This smacks of corruption, can't wait to hear about who actually benefited financially from this project in the year 2040 when tribunal after tribunal try to delay the truth coming out.

Can never decide if you are a troll or serious, but that post is nonsense. I seriousness object to egging on those who might not be able to understand a complex process and because of that start repeating the corruption nonsense.

Wheeliebin30 · 19-12-2018 2:09pm

klaaaz wrote: »

That's what a party in govt do, announce a price that seems "we're doing a great job" and then the story goes away for a few years while the costs escalate to benefit an elite few. This smacks of corruption, can't wait to hear about who actually benefited financially from this project in the year 2040 when tribunal after tribunal try to delay the truth coming out.

Have you actually any evidence of corruption here or are you just talking and making up stuff to suit your anti establishment agenda?

suicide_circus · 19-12-2018 2:14pm

this happened with luas, the port tunnel, m50, dublin airport t2. there are no consequences for anyone except the tax payer.

Cina · 19-12-2018 2:17pm

€1.4bn? Those babies would want to be heading out of there as mini Lionel Messi's with skin made of gold.

Harry Palmr · 19-12-2018 2:20pm

Public funded infrastructure is how construction companies make their money, they hate doing large private works as they have to stick an agreed budget and pay hefty fines if they over-run and they also have to stick to the schedule (again fines if they slacken)

19-12-2018 2:23pm

More than a Burj Khalifa. Fantastic.

Berserker · 19-12-2018 2:28pm

listermint wrote: »

Tbh mainly appears to be staffing related / consultants etc unwilling to be outside the M50 loop.

Doubt that. Plenty of consultants operate out of that loop. Pretty much every medical professional I've spoken to thinks this is a crazy idea, so this hospital isn't for them.

JohnnyFlash wrote: »

I presume some shower of suits from EY, Deloitte or KPMG came up with the initial figure?

I'd believe it. Bumped into a lady I used to give Maths grinds to at university level a while back. She is a director in one of the above now. I wouldn't trust her to tot up my weekly shopping bill.

iamwhoiam · 19-12-2018 2:35pm

Cina wrote: »

€1.4bn? Those babies would want to be heading out of there as mini Lionel Messi's with skin made of gold.

There are many parents who would be very happy their babies headed out of there with an intact heart , skin that didn't peel off on contact , the clefts in their palates closed so they can feed etc
I don't think bringing the sick babies into a thread on finances is appropriate to be honest

suicide_circus · 19-12-2018 2:36pm

Harry Palmr wrote: »

Public funded infrastructure is how construction companies make their money, they hate doing large private works as they have to stick an agreed budget and pay hefty fines if they over-run and they also have to stick to the schedule (again fines if they slacken)

why are there different ts and cs for public contracts?

klaaaz · 19-12-2018 2:40pm

Wheeliebin30 wrote: »

Have you actually any evidence of corruption here or are you just talking and making up stuff to suit your anti establishment agenda?

This from a poster with a hatred of giving a few million of taxpayers money to help the poor, not a peep out of you when your favourite conservative party has spent and will spend over a billion of taxpayers money on just one project with no accountability.

EdgeCase · 19-12-2018 2:47pm

The way that project has rolled on, seemingly with every Tom, Dick and Harry becoming involved in making major decisions about the site choice and all sorts of other things is illustrative of what's wrong with the health system here.

Money has basically been flushed down the toilet and it's money that could have been spent on capital investment in areas that need it.

My view it is this needs to be audited very aggressively and a report published immediate and people brought to account. It's totally unacceptable to be this far over budget.

This pink elephant of waste is contributing to why someone isn't getting a hip or back operation or whatever it is they're waiting in due to lack of theatre space.

It's also going to be a reason for cutting funds to other parts of the health system because it's seen as part of the overall health budget.

So when you're waiting 47 hours in an overcrowded A&E think of this monumental splurge of health budget and think about it again when you're talking to your local TD and particularly when you're standing there with your ballot paper about to make decisions.

19-12-2018 2:50pm

I'd like to see a cost/benefit analysis done with that price tag.

19-12-2018 2:50pm

And to think that for all those years of Fianna Fáil in power, the Blueshirts liked to promote themselves as the "serious" party of fiscal rectitude in contrast to the "populists" of Fianna Fáil. Ha. What pretensions.

I suppose as long as they only let a handful of already rich business people (who are absolutely certainly not paying 50%-60% tax on that income to this state) benefit from this enormous "overrun" they'll still feel morally superior than a party which would be "populist" enough to distribute the same overrun across a wider section of the population.

EdgeCase · 19-12-2018 2:53pm

This needs to be to the PAC and it needs to be heavily audited. It's an off the scale overspend and should be causing all sorts of warning lights go off and flags to be raised about fiscal management.

This is the kind of thing that lands you in situations where you have to get the IMF in to show you how to count.

jay0109 · 19-12-2018 2:54pm

buried wrote: »

Hmmm Anyone in some semblance of authority going to take some responsibility for this?

Simon Harris was all over the abortion referendum 'win'.
All he seems to have said about these overruns is that he won't put a price on quality healthcare for children. Quality stuff

EdgeCase · 19-12-2018 2:56pm

I bet you that this white elephant will open with all sorts of lovely facilities and then it's going to have waiting lists and inadequacies due to constraints around hiring adequate numbers or medical staff to run the services.

jay0109 · 19-12-2018 2:56pm

And don't forget, the 1.4bn price tag is likely to rise further said Varadkar.
And it does not include the fit out costs.

This thing could get close to 2bn yet before the first patient goes in the door

salmocab · 19-12-2018 2:58pm

The figures never meant anything, they decided where they were putting the hospital sold the lotto rights and had the reports done afterwards.
It has been a shambles from day one.

sbsquarepants · 19-12-2018 3:01pm

It's madness - no private company could survive with an attitude that the price they were quoted is not worth the paper it's written on. Price the damn job then build the building - if you got your initial sums wrong, that's your own problem.

EdgeCase · 19-12-2018 3:01pm

jay0109 wrote: »

Simon Harris was all over the abortion referendum 'win'.
All he seems to have said about these overruns is that he won't put a price on quality healthcare for children. Quality stuff

Nothing new there. The aim of all health ministers it to achieve something that does not involve tackling the problems in the HSE because it's like opening a Pandora's box of crazy and unsolvable problems that will destroy you.

That's why they usually pick a topic like the smoking ban or in this case abortion services all of which are useful things to have done but it allows the HSE to roll on.

There's a major problem with this and it's only going to be solved by declaring the health system a national mess that has to be solved cross party without political football issues.

Time after time the HSE manages to sail on and 100% of of political pressure lands on a minister who has only barely has his or her feet under the desk for 10 minutes.

The result is that ministers for decades have learnt from experience of predecessors that trying to tackle this beast results in it destroying your career and it just rolls on anyway.

The health system in my opinion is a national crisis and I think it needs to be handled as such until it is working.

Cina · 19-12-2018 3:03pm

iamwhoiam wrote: »

There are many parents who would be very happy their babies headed out of there with an intact heart , skin that didn't peel off on contact , the clefts in their palates closed so they can feed etc
I don't think bringing the sick babies into a thread on finances is appropriate to be honest

I never mentioned sick babies so I really don't see where you're getting that from. It was a joke relating to the cost of the hospital.

19-12-2018 3:04pm

I really have to wonder what the point is of spending so much money on this.

Chips Lovell · 19-12-2018 3:10pm

Did Dermot Bannon do the initial cost estimate?

Simon Harris: "I've a budget of €650 million"

Bannon: "No problem"

Two months later

Bannon: "Yeah, it's actually going to be €1.4 billion...."

marvin80 · 19-12-2018 3:10pm

Set to be the world's most expensive medical facility and in a ridiculously unsuitable location - some shambles.

gandalf · 19-12-2018 3:15pm

TBH these kind of projects worldwide overrun the mark but this project overrun is pretty insane and I'd say I would be safe making the prediction that it will be higher than the 1.4 billion mark when it opens in 2022.

They should have bought HP's former plant in Leixlip. It was built originally for use as a hospital and contained rakes of free space for expansion in the years to come with easier access for people from all over Ireland and ample parking. I believe the asking price was around €50 million.

Anita Blow · 19-12-2018 3:17pm

Have no doubt this is going to balloon to >1.8 billion by the time it's done. There is no way a hospital should be costing this much. How can building costs alone rise by 350 million since September?

iamwhoiam · 19-12-2018 3:17pm

Cina wrote: »

I never mentioned sick babies so I really don't see where you're getting that from. It was a joke relating to the cost of the hospital.

Well what kind of babies are usually in a paeds hospital ? You mentioned the babies getting out of there so it stands to reason they are sick babies . The cost of building the facility has nothing to do with the babies in my opinion

seamus · 19-12-2018 3:21pm

gandalf wrote: »

TBH these kind of projects worldwide overrun the mark but this project overrun is pretty insane and I'd say I would be safe making the prediction that it will be higher than the 1.4 billion mark when it opens in 2022.

Anita Blow wrote: »

How can building costs alone rise by 350 million since September?

You see, we don't actually know what the overrun is, or whether costs have actually risen at all.

The Dermot Bannon comparison is a good one.

We need to know what the price was at tender.

Because it wasn't 450m or 650m. Those were terrible estimates thrown out by someone who should be fired. A monkey with a dartboard could have provided better estimates.

But if the price at tender was €1.4bn, then it's not a cost overrun but a terrible underestimation.

When I first had a builder and architect look at my extension, they estimated €40k. When the formal tender came in, it was €65k. The final price was €72k.

Did my extension overrun by €7k or €32k?

manonboard · 19-12-2018 3:22pm

iamwhoiam wrote: »

Well what kind of babies are usually in a paeds hospital ? You mentioned the babies getting out of there so it stands to reason they are sick babies . The cost of building the facility has nothing to do with the babies in my opinion

Thats a pretty creepy point you are trying to drag. There was no insinuation about sick babies, merely a reflection that for the money we are paying we would to be getting almost super powered babies. No malice was in his statement and you dragging it on is a pretty weird way of interpreting it.

Cina · 19-12-2018 3:23pm

iamwhoiam wrote: »

Well what kind of babies are usually in a paeds hospital ? You mentioned the babies getting out of there so it stands to reason they are sick babies . The cost of building the facility has nothing to do with the babies in my opinion

It's also a maternity hospital.

When I made that post I didn't even think of sick babies, however that's somehow what you're deducing from what I'm saying, which was simply a joke about the financial cost of the hospital. I think that speaks more about you than me. You seem a bit too eager to jump on what someone says and claim they're being inappropriate. My post was a joke with no malice toward anyone, I suggest you lighten up and stop fishing for things that don't exist. Quite frankly it's insulting for someone to insinuate that I'm making a joke at the expense of ill children in the first place.

EdgeCase · 19-12-2018 3:23pm

This is also the the problem though.

A gross overspend is not going to achieve better services. It will achieve a white elephant and constrained sercives due to lack of budget putting pressure on in other areas.

Emotive arguments don't take away from the fact that this has been at best absolute chaos from day one.

I mean I could stand here and burn 500 million euro and say it's for the health budget and I can assure you that will not help sick children. It will actually take money away from them.

The reality of this is if you keep changing the specifications for a large piece of infrastructure it will double and triple in build cost. We had every well meaning lobbyist jumping on the bandwagon and they all suddenly were world experts on hospital location.

We then had the whole project scrapped and redesigned and there was all sorts of other crazy things done in the middle.

This isn't a garden shed. It's a very complex healthcare facility.

What happened was absolutely insane and demonstrates a total lack of management, oversight or accountability.

Would you rather €1 billion be spent on cardiac facilities for pediatric care or on redesigning the hospital building over and over due to lobby groups and political interests fighting ?

iamwhoiam · 19-12-2018 3:27pm

Cina wrote: »

It's also a maternity hospital.

When I made that post I didn't even think of sick babies, however that's somehow what you're deducing from what I'm saying, which was simply a joke about the financial cost of the hospital. I think that speaks more about you than me. You seem a bit too eager to jump on what someone says and claim they're being inappropriate. My post was a joke with no malice toward anyone, I suggest you lighten up and stop fishing for things that don't exist. Quite frankly it's insulting for someone to insinuate that I'm making a joke at the expense of ill children in the first place.

Its not a maternity hospital actually

€1bn cost overrun for new Children's Hospital

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