The chairman of the new Children’s Hospital Development Board, Tom Costello, is to step down from his position following the controversy over the escalating cost of the project.

Mr Costello announced his resignation on Saturday after five years in the role and said concerns about reputational damage to the project due to the controversy over the costs had forced his decision.

Minister for Health Simon Harris said on Saturday he has accepted the resignation of Mr Costello.

The controversy over the rising costs of the new National Children’s Hospital which could top €2 billion, has prompted the Government to ask consultants PWC to examine the series of events that led to the increase. The hospital will be located on the campus of St James’s Hospital in Dublin.

I have acted with professionalism and integrity in all my dealings with the project stakeholders

In April 2016, Taoiseach Leo Varadkar said the total cost of the project would be €650 million.

Last December, The Irish Times revealed the total cost of the project has increased to at least €1.73 billion. There are concerns now that the final cost may exceed €2 billion.

In a statement this morning, Mr Costello said: “I have acted with professionalism and integrity in all my dealings with the project stakeholders including the Minister for Health and his Department.”

“Every decision made by the board has been guided by what was deemed best for the Project.

“I am concerned about the reputational damage that the ongoing commentary about the increased cost of the hospital is having on this critically important project and so I have decided to step down from my role to help ensure that focus is restored on delivering the project.”

Thanked

Mr Harris thanked Mr Costello for his service and his commitment to the project for the past six years. He said Mr Costello’s decision to step down had been motivated by this same overriding commitment.

“Throughout his tenure, Mr Costello worked tirelessly to ensure a state-of-the art facility is built for our children and advanced the project significantly,” the Minister said.

On Friday Mr Harris signalled he was prepared to change the membership of the board developing the new National Children’s Hospital if necessary.

If the PWC report on the escalating costs recommended governance or personnel changes, the Minister would act on these, his spokeswoman said last night.

People will be held to account. There will be governance changes in relation to this, of that there is no doubt

She said the Minister acknowledged there were serious concerns regarding overrun and particularly with the governance of the project.

“The Minister has powers under the Children’s Health Act to review the composition of the board and he will keep these matters under review.”

Earlier on Friday Mr Harris appeared to suggest there would be “personnel changes” without any linkages to the forthcoming independent report into the cost escalation.

“People will be held to account. There will be governance changes in relation to this, of that there is no doubt. There will be personnel changes in relation to some people involved in the governance structure,” he had said.

It also emerged on Friday that the consultants who have been tasked with examining the cost escalations in the hospital were told to “stop short of determining culpability at the individual level”.

The PWC review of the rising costs is due to be completed by March 22nd. The hospital is due to be completed in 2022.

Terms of reference

According to the terms of reference for the review, it will establish the “underlying root causes” that led to the escalation.

While it will deal with the “role and accountability of the relevant key parties,” it will “stop short of determining culpability at the individual level”.

Meanwhile senior officials from the Department of Public Expenditure are to be questioned before two Oireachtas committees over the escalating cost of the National Children’s Hospital.

Sinn Féin TD Pearse Doherty said the Finance Committee is asking the Secretary General of the Department of Public Expenditure Robert Watt to appear “as soon as possible” to answer questions about the oversight of the project.

Fianna Fáil TD Seán Fleming, who chairs the Public Accounts Committee, said he wants to question the officials on various capital projects including the National Children’s Hospital.

It comes after it emerged that the Department of Public Expenditure and Reform (DPER) raised concerns nearly two years ago about governance arrangements for the development of the hospital.

Informed sources said DPER had contacted the Department of Health in early 2017 regarding its concerns about governance issues.