Delay costs for Our Hospital (FOI)

Request

According to Senator Lyndon Farnham’s statement of the ‘Our Hospital project in a media release: “Each week the project is delayed will cost the public purse an additional £100.000.” Please give an explanation of how this figure was arrived at.

Response

The statement made by Senator Lyndon Farnham that each week the Our Hospital project is delayed, there will be an additional cost to the public purse of £100,000 is a simple approximation.

The full project cost, up to the point at which an outline business case and outline planning application are submitted, is expected to be £7.4 million. The project is scheduled to produce these deliverables within 20 months.

The total cost divided by the number of weeks in 20 months results in an average weekly cost of around £85,500 but given that more resources will be committed to the latter stages of the project by the project team and specialist advisers, the cost could be closer to £100,000 per week of delay.