New elective hospitals here set to be twice as expensive to build as similar facilities abroad

The cost per square metre of planned new elective hospitals in Cork and Galway are on track to be twice as high as similar facilities in other countries, an Oireachtas report has found.

The report on hospital construction costs published by the Parliamentary Budget Office found that, when converted for purchasing power parity (PPP), the proposed new hospitals will cost US$40,000 per square metre. This compares to the less-than-US$20,000-per-square-metre cost of the Jim Pattison Outpatient Care and Surgery Centre in Canada, which opened in 2011.

The indicative cost of the two planned Irish elective hospitals were compared with the actual costs of 19 similar hospitals completed in the US, Canada, the UK and Spain. Across the 21 sites, the average construction cost per square metre was under US$10,000.

“The indicative up-front costs of the proposed new elective hospitals in Cork and Galway appear to be high on a per square metre basis when compared with other similar hospitals in the dataset,” the report concluded.

The document also compared the expected construction costs of the planned new National Maternity Hospital (NMH) in Dublin with similar completed projects in Northern Ireland, the US, Canada and Kuwait.

Again, the NMH had the highest per-square-metre cost, at US$20,000. In comparison, the Regional Maternity Hospital in Belfast was built at a cost of less than US$10,000.

Building contractors handed over the Northern Ireland hospital to Belfast Health and Social Care Trust last April. However, its opening faces significant delays after high levels of the bacteria pseudomonas were discovered in its water system.

While Ireland’s new National Children’s Hospital (NCH) has been beset by its own delays and high build costs, the report found that, contrary to popular opinion, it is not set to be the most expensive children’s hospital in the world.

Instead, that title goes to the UCSF Benioff Children’s Hospital in Oakland, California, which cost over US$55,000 per square metre. This compares to US$15,000 per square metre for the new Dublin-based children’s facility.

An analysis of 40 children’s hospitals across the world found the average cost per square metre for construction was around US$11,000, with the new (NCH) the thirteenth most expensive.

However, when costs are compared on a per-bed basis, the NCH comes in as the sixth most expensive, at US$5,000 per bed. The average per-bed cost across the 40 hospitals was around US$2,800, while the most expensive, the Children’s Health Hospital in Dallas, Texas, came in at a cost of US$9,000 per bed.

While it is now expected the cost of completing and opening the NCH will reach €2.24 billion, this includes the costs of merging three existing children’s hospitals into one at a corporate level, as well as the opening of two satellite centres in Blanchardstown and Tallaght.

When these costs have been removed the PBO calculate the cost of planning, designing, building and equipping the NCH at €1.794 billion, which is the cost it has used in its analysis.

Across all hospital types, the report found that capital expenditure for a new building is equivalent to around 5-10 per cent of its lifetime operational costs.

Charts: Parliamentary Budget Office report on Hospital Construction Costs