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READER LETTER: How do you justify the difference between the cost provided to the public and your proposal?

READER LETTER: How do you justify the difference between the cost provided to the public and your proposal?

Tuesday 05 October 2021

READER LETTER: How do you justify the difference between the cost provided to the public and your proposal?


A local campaign group has laid down further questions to the Minister leading what is set to be the island's largest ever capital project.

Responding to Deputy Chief Minister Senator Lyndon Farnham's letter published in Express last week, the Interim Chair of the Friends of Our New Hospital had this to say...

Senator Farnham responded on 1 October to our letter to you of 29 September regarding the Our Hospital Project.

In his letter, Senator Farnham writes “At this critical stage we must adhere to the facts and resist any attempts to derail the project through assumption and the spreading of misinformation.”

It is clear that Senator Farnham is suggesting that the facts set out in our letter are incorrect.

Perhaps Senator Farnham would like to respond to these facts: 

  1. The Future Hospital Review Panel wrote to the Senator on 13 August and asked, amongst other questions, the following: “The OBC [Outline Business Case] refers to the project cost consultant undertaking a benchmarking analysis to evidence the level of costs presented are accurate and reflective of similar healthcare facilities adjusted for Jersey location factor. Excluding the Jersey factor, where does the baseline cost for the facility sit compared to reference projects elsewhere?"

  2. Senator Farnham wrote to the Panel on 27 August in response: “The projected costs for Our Hospital are comparable with other similar hospital builds. Please see Appendix 1 for a comparison of the main hospital building and energy centre compared against similar large hospital projects, on a like for like basis...”  

  1. Senator Farnham’s Appendix 1 (click to open) confirmed that the projected Our Hospital build cost is £4,497 per m². The OBC states that the Our Hospital building will be approximately 67,000m².  On this basis the Senator’s projected build cost would be £301.3 million (£4,497/m² x 67,000m² = £301,299,000).

  1. The Senator also confirmed further expenditure required of £179 million for hospital equipment, land acquisition, Westmount Road improvements, contractor profit, advisors and expenditure to date. 

  1. Senator Farnham’s build cost and further expenditure estimates total £480.3 million.  

    farnham.jpg

Pictured: "The question for Senator Farnham is this: how do you justify the £320 million difference between the cost estimates you have provided to the public and the States and P.80?"

Proposition P.80 'Our Hospital – Budget, Financing & Land Assembly' will be debated in the States this week.

The Proposition requests the approval of a budget for the Our Hospital Project of £804.5 million and borrowing of £756 million to pay for it. The question for Senator Farnham is this: how do you justify the £320 million difference between the cost estimates you have provided to the public and the States and P.80?

The Future Hospital Review Panel has lodged an amendment to P.80 which, if passed by the States, would limit the Our Hospital project budget to £550 million and borrowing to £400 million. The Friends of Our New Hospital have always supported the Island’s need for a new hospital. A hospital built at the right cost without overburdening future generations to pay for it.  We urge the States to approve the Future Hospital Review Panel’s amendment to P.80. 

Peter C Funk
Interim Chair, Friends of Our New Hospital 

Express contacted the Minister to ask if he wished to respond, but had not received a reply at the time of publication.

READ MORE...

READER LETTER: What is the justification for the extra £320m? (29 September, Friends of Our New Hospital)

OPEN LETTER: "Reducing the budget by £250m will bring the project to a halt" (1 October, Deputy Chief Minister, Senator Lyndon Farnham)

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