PEH and schools projects could cost £90m. more
PROJECTS to improve the Princess Elizabeth Hospital and develop a new model of secondary and further education are now expected to cost at least £90m. more than when the States approved them.
The maximum estimated cost of the hospital project was £93.4m. when the States voted for it in 2019. But Policy & Resources has revealed the latest figure is £154m.
The estimated cost of a new centre for sixth form and further education studies at Les Ozouets and digital improvements was £101m. as recently as last year.
However, P&R has revealed the latest figure is £128m. and could climb higher.
Phase one of the hospital project is on time and on budget. It should be completed by March next year for a fixed price of £34m. But the estimated cost of the rest of the project – phase two – has shot up from around £50m. to £120m. in less than four years.
‘It seems fantastical to me that it has more than doubled since we first saw it,’ said treasury lead Mark Helyar at a Scrutiny public hearing with P&R yesterday.
‘There were a series of steps here. The first figures we saw were for phase two and they were well under £100m. Then it jumped because of the confidence limits that are put around it by quantity surveyors and people who are looking at it.
‘The subsequent jump has really been because of inflation in the costs of building since we’ve had inflation rising. Building costs have gone up significantly higher than inflation.’
Scrutiny president Yvonne Burford told P&R members that other deputies and the public would be shocked by the increase in costs.
‘You say there are project overspends, but in the time I’ve been in the States I really don’t recall that many project [increases] which have been of that magnitude,’ she said.
‘There are questions to be asked about how a project can be priced at £49m. as an upper band and then come out in excess of £100m.’
P&R member Bob Murray said the increased budget estimate for secondary and further education was largely down to digital costs and delays to a new post-16 campus at Les Ozouets.
He admitted the revised estimate was still ‘somewhat variable at this point in time’.
‘All we’ve got at this stage is what our quality assurance people are telling us that it might be,’ he said.
Deputy Helyar said ESC’s secondary and further education plans would ‘have to be revisited’ alongside all other large capital projects in a States debate scheduled for July.
