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Children's hospital contractor seeking extra claims totalling more than €300 million

Six of the claims are more than €40 million, the committee was told.

PAC told contractual completion date has been extended to October 2022, but that is not a realistic date for the opening of the new hospital.
PAC told contractual completion date has been extended to October 2022, but that is not a realistic date for the opening of the new hospital.
Image: Sasko Lazarov

BAM, THE PRIMARY contractor building the new National Children’s Hospital, has submitted claims for extra costs running to more than €300 million, the Oireachtas Public Accounts Committee (PAC) was told today. 

The National Paediatric Hospital Development Board (NPHDB) have said it is withholding 15% of payments to the main contractor over contractual disputes, according to Chief Officer of the Board, David Gunning.

The overall cost of the project was not shared with the committee members today, with Gunning stating that a submission on the progress of the hospital construction, including the cost, will be sent to the Department of Health at the end of the month.

The Dáil’s public spending watchdog was told by the board that the main contractor is “underperforming”, stating that there is likely to be a “reset on the timelines” for the opening of the hospital.

Gunning said he could not give an exact date for the completion of the project.

At present the project is 10 months behind schedule. It was five months behind at the start of Covid last March, he said.

The contractual date for completion was August 2022, but due to the seven-week closure of construction due to Covid-19, this has been extended out by eight weeks to October 2022, said Gunning. He acknowledged that this is not a realistic date.

Fianna Fáil’s Marc MacSharry said given the dates provided by the board it could be May 2024 before the hospital is open. Sinn Féin’s Imelda Munster said it will be the most expensive children’s hospital ever built. 

“By way of an example, at the end of December 2019, the contractor had progressed 8.5% of the works when it should have progressed 22% and this delay has continued to grow month on month,” Gunning said.

Of late things have improved, he said, stating that numbers on site are “still not at the level” as the contractor had set out in the resource plan for the project.

There are more than 1,000 on-site, which is highest since the project began, the committee was told. This is not going to be enough to recover the delay that has accumulated, added Gunning. 

In relation to the additional claims being levelled by the contractor amounting to €300 million, Gunning said some of the claims are around €10,000 while some are in the tens of millions. 

Six of the claims are more than €40 million, the committee was told. 

Members were told the number of claims is “inordinately high”.

Gunning said the board has no other option but to defend these claims, which comes at a “considerable cost”. If the contractor engaged in another matter, other than the courts, the high legal fees would not be incurred, he said. 

Overall legal fees as an entity in 2018 were  €128,000, this rose to €691,000 in 2019.

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Last year, legal costs incurred were €466,000, but this does not include the cost of a High Court case with BAM over one of the additional claims.

The committee was told that it is expected that the level of these claims will continue.

“The last of the concrete will be poured in the not too distant future – we are making progress, though we are not where we need to be,” said Gunning.

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