Public concern around the monumental waste of taxpayer money has intensified in recent years. Cost overruns have become the norm with publicly-funded projects. The new National Children’s Hospital is, without doubt, the prime example.
A couple of important questions come to mind. Are these cost overruns justified and how can we avoid making the same errors in the future?
As a doctor and engineer, I became involved in the provision of medical facilities 40 years ago. I studied hospital construction in some detail and was fortunate to be put in contact with an American hospital construction company, Gerrits Construction. At that time, as well as building hospitals in America, the company was constructing hospitals in the UK and Middle East.
All of its projects were delivered over a 12-month period, both on time and on budget.
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They achieved this by following 10 simple principles. I applied these same principles initially in the development of the Blackrock Clinic and subsequently to the Galway and Hermitage Clinics. All three hospitals were constructed within 18 months and all were within budget – Blackrock Clinic took just 10 months.
The steps were as follows:
- Only build on a greenfield site. Construction costs are a minimum of 10 per cent cheaper on a greenfield as against a developed site. Site-preparation costs are minimised in this instance. Room for surface parking, as opposed to basement parking, generates considerable savings. A single storey of parking at basement level is four times the cost of surface parking. If deeper excavation is required, the cost increases significantly depending on the site.
- All plans are signed off prior to construction. This entails a detailed design, with no latitude for design development during the construction programme. The last plug socket should even be specified. This process is key to successful construction, delivery and cost-control of a project. Architects and design teams must not be permitted to develop their plans as programmes progress and leave budgets for design development. In the case of the National Children’s Hospital, 23,000 design changes have been reported.
- All big equipment should be specified and ordered before construction commences. Hospitals have sophisticated equipment, particularly in the imaging departments, with particular requirements such as chillers and specific room requirements. These details vary considerably from company to company. How often do we see contracts with virtually a rebuild of vital areas such as operating theatres due to inadequate planning? Traditionally, in Irish hospital programmes, a separate budget applies for equipment. The choice of the equipment is only made towards the completion of construction and results in multiple design changes. Suppliers should be identified during the design stage so their detailed specifications are incorporated into the design from the onset.
- Maximum construction is one year. Compacting the programme not alone minimises the risk of equipment alterations, but also the amount of bridging finance and interest that has accrued during this period.
- Commissioning. This commences on the first day of construction. Once the hospital has been handed over with the snags rectified, the treating of patients can get under way. In Galway, commissioning after the handover of the facility took an additional two weeks before the first major cardiac procedures were undertaken.
- All vital fixtures and fittings are purchased in advance and stored in an adjacent warehouse. Gerrits estimated that when building in Europe, approximately 30 per cent of the workforce were idle at any one time awaiting supplies. In the past, particularly in the boom years, delays of up to six months occurred for certain items, such as sanitaryware. Having these items all at hand eliminates delays and optimises the use of the workforce.
- All fixed fittings should be included in the contract, so that subsequent separate fixing is eliminated. A simple test for evaluating whether items are included in the contract is to turn a building upside down and shake it. What falls out is not included.
- Use prefabricated components whenever possible. In Blackrock, Galway and Hermitage clinics, all the operating theatres were fabricated in Germany. They were constructed from stainless steel and were of the highest quality. They were assembled on site and commissioned in eight weeks. The bathrooms in the Galway and Hermitage clinics were manufactured in Italy and craned into the building. Prefabricated bathrooms eliminate the need for eight separate tradespersons and their co-ordination on site. Not a single snag required rectification.
- The contract price is fixed with no variation. If variations are deemed necessary, these are not permitted until the contract is complete and the building handed over. Any additional work can then be undertaken at additional cost, but not by interfering with the fixed contract.
- During construction, the design team meets weekly. Only the principals are involved in these meetings, allowing for instant decisions to be made. Gerrits frequently had contracts on at least three continents ongoing at any one time. The boss used his Lear jet to ensure his presence at these weekly meetings irrespective of the continent.
The size of the hospital did not impact the contract time. Larger and more complicated hospitals just entailed a larger construction force. I have no detailed knowledge of what has gone on in the new national children’s hospital, but the process appears to merit a score of zero out of 10.
James M Sheehan is a retired orthopaedic surgeon who was founder and developer of the Blackrock, Galway, and Hermitage clinics
