Minister for Health Simon Harris has tonight released the memo from last August that flagged the cost overruns at the National Children's Hospital.

It said that the construction budget was €191m above the previous price estimate.

It also stated that the main construction company had submitted substantial additional costs to the tune of approximately €200m.

That brought the total possible overrun to €391m, which is also the amount detailed in the minutes of the project's oversight board's September meeting.

The memo said the figure of €200m needed to be questioned and assessed by quantify surveyors.

A spokeswoman for the minister said tonight the hospital board wrote to main hospital contractor on 29 August saying this amount was not acceptable and the final cost relating to this was significantly reduced.

They said it remains the position that Mr Harris did not know about the final figures until 9 November and he informed the Taoiseach and the Department of Public Expenditure and Reform on that date. 

"The work undertaken from August on was essential to enabling the Minister to bring to Cabinet a thorough assessment and a clear recommendation," they said.


Read the memo


Correspondence released tonight also shows that Department of Health officials had been trying to raise cost issues on the Children’s Hospital project with the Department of Public Expenditure since late September.

However, a meeting between staff from both departments did not take place until November.

The documents suggest too that the Secretary General at the Department of Health had indicated during budget discussions in October that work was being done on the cost issues.

Speaking on RTÉ's Prime Time, Minister Harris said the hospital board refused the €200m requested by the contractor.

The Minister also defended why the information hadn't been revealed in the Dáil or during the negotiations on the Budget and renewing the confidence and supply agreement between Fine Gael and Fianna Fáil.

He said the Taoiseach and Minister for Finance and Public Expenditure were informed of the situation 'at the appropriate moment' in November. He added that his department had been 'seeking to engage' with the Department of Public Expenditure in September and October. 

Minister Harris said he believed he had behaved entirely appropriately and that it was clear that he retained the confidence of the Taoiseach. He said he didn't accept that he'd withheld information from the Dail. 

He said a collective decision was then made to proceed with the project adding that delaying the hospital or retendering it would have cost more money.


Sinn Féin calls for Taoiseach to remove minister

Responding to the publication of a memo this evening, Sinn Féin Health spokesperson Louise O’Reilly has said that the minister’s position was untenable.

Ms O'Reilly said that Taoiseach Leo Varadkar must remove him from his position.

She said: "Minster Harris' story is unravelling before our very eyes.

"The memo published this evening clearly shows that he was aware of a €391million overrun at the hospital as far back as August, yet he did not inform the his cabinet colleagues till November 9th.

"This means that he was aware of a massive cost overrun at the hospital while he and his Government were putting together the Budget for this year yet he never mentioned it till after the Budget was announced.

"Minister Harris' position is completely untenable. The Taoiseach must remove him from his position.

"There is also an onus on Fianna Fáil to make a statement on this matter and they have to stop protecting Minister Harris. They hold the numbers on this."

Fianna Fáil's Spokesperson on Health, Stephen Donnelly described the memo as "very serious revelations".

He said: "It is hard to see any serious attempt made to curtail the escalating costs.

"It would seem that instead of tackling them, the Minister withheld this information from both the Taoiseach and the Minister for Finance, despite being in regular contact in the lead up to, and throughout, Budget talks.

"The statement issued tonight by Minister Harris looks like an attempt to avoid accountability and the pressing need to acknowledge error on his part. His remarks make matters worse."

Artist's impression of the new hospital

Read more:
Donohoe to make proposals to avoid future cost overruns

Revised terms for review of children's hospital costs
Delivery of children's hospital at point of no return - Harris


Costs raised at June board meeting

Earlier, RTÉ News revealed that rising costs of the hospital project were raised at a high-level hospital board meeting last June.

The meeting heard about the challenge posed by the continuing and unanticipated levels of construction inflation.

The Children's Hospital Project and Programme Board meeting was also told about the costs arising from gaps in the initial 2016 hospital design.

There were cost pressures stemming from the delay in completing the price negotiations with the contractors, the meeting heard.

At this time, cost savings of €62m were being sought by those overseeing the hospital project to keep it within budget.

This meeting was attended by among others Secretary General of the Department of Health Jim Breslin and Health Service Executive Acting Director General John Connaghan.

The terms of reference of this board stated that matters would only be escalated to this level if they were exceptional.

Minister Harris has said that he became aware of the spiralling costs in late August 2018. He then was given exact figures for €450m overrun on 9 November last year.

However, at a further meeting of 19 September, the minutes suggest there were possible cost overruns of €100m, €91m and €200m, that is a combined total of €391m.

However, it was another five weeks before Government learned of the final figure. These included additional costs from the main contractor totalling €200m.

It said too that a further €191m came from issues arising from a failure to find savings, additional fire sprinklers, and changes to the hospital design.

Significant concern was expressed over what was termed the "construction cost trend".

Meanwhile, the Public Accounts Committee has decided to invite Robert Watt, the Secretary General of the Department of Public Expenditure and Reform (DPER), to answer questions about cost overruns at the new children's hospital.

Members from across the political spectrum agreed that Mr Watt should be invited to explain his department's role in dealing with the overruns in the controversial project.

Earlier this week, the revised terms of reference of a review by consultants PwC into the cost increases were published.

This probe is seeking to find out what was known, when, and by whom, about the escalating building costs that could yet top €1.5bn.

Sinn Féin TD David Cullinane proposed that the committee write to DPER asking that department's secretary general to come before it. He also proposed that Paul Quinn, Chief Procurement Officer for the Public Service, comes before the committee.

Committee Chair Sean Fleming was critical of a letter received from Mr Quinn.

The State's leading procurement official made no reference to the fact that he was a member of the board of Directors of the National Paediatric Hospital Development Board.

Mr Fleming said that Mr Quinn was a member of the hospital's board since August 2013 and "there was a clear conflict of interest".

Mr Fleming pointed out that the Secretary General of DPER is within his rights to refuse to attend the committee as he is not the accounting officer for the children's hospital project.

He suggested that a request for Mr Watt to appear before the PAC should be framed in such a way that he is invited in to talk about infrastructure projects in general, rather than a specific request to talk about the hospital project overruns.

Labour TD Alan Kelly said that it is "absolutely necessary" that Mr Watt comes in and "I suspect he wants to". He said that Mr Watt and Mr Quinn need to come before the committee to help it get to the bottom of the controversy.

Mr Kelly was critical that there were attempts made for the Department of Health and the Department of Public Expenditure to sit down and discuss the cost overruns with the project last October, but this meeting did not take place. 

He said that the two departments and the Taoiseach were aware that the project was at least €200m over budget at the same time the Budget negotiations were going on, yet they did not sit down to discuss it.

Earlier, Minister for Communications, Climate Action and the Environment Richard Bruton said the Government was determined to find out what led to the overspend of the building of the hospital.

Speaking on RTÉ's Morning Ireland, Mr Bruton said that the Government recognises that the protections it had put in place in relation to the management of the project did not work.

"Something went seriously wrong here and we're determined to get to the bottom of it and apply those lessons, and take control of the situation," he said.

Additional reporting Conor McMorrow