‘It’s not too late to rip up hospital contract’
TD Wallace claims re-tendering could save €500m
THE National Children’s Hospital contract is ‘like picking apples in an orchard’ for the main construction firm involved, Mick Wallace has said. But the Wexford TD and former builder added: ‘We have not reached the point of no return,’ and claimed that tearing up the contract will be cheaper than allowing the €1.7billion project to roll on with the current builder.
‘You could save up to half a billion,’ the Independents 4 Change politician told Tánaiste Simon Coveney in the Dáil chamber, arguing for the termination of the current contract followed by a new process.
But Mr Coveney replied: ‘The advice to Government is that re-tendering would not result in a significant saving of money.’
The Government used a fixedprice contract for the hospital, Ex-builder: Mick Wallace TD which must have a well-defined scope of works, ‘or the claims will come’, Mr Wallace said, adding that there was no welldefined specification because it was such a complex project.
‘So the claims are coming, and we are only starting,’ said Mr Wallace, whose own construction firm is in liquidation. He added: ‘I would argue that right now for BAM [the main contractors], it is like picking apples in an orchard and that is a big problem for the Government.’
A legal firm acting as adviser on how to procure and amend the tender documents had a duty to alert its clients to the consequences of using such a contract, as it did not suit the job, he argued. ‘That gives unbelievable potential to the contractor to get extra money as it goes,’ he added. The TD urged the ending of the contract.
‘The Government has the potential for termination at will, which excludes loss of profits. The cost of calling a halt is in the contract,’ he said. ‘The extra cost we are looking at now will be far exceeded in time if the Government continues along this road. The Government needs to stop and re-tender.’
The Tánaiste acknowledged Mr Wallace’s ‘obvious experience in the construction industry, which makes for a very helpful contribution’. He also recognised that mistakes were made, with a gross underestimate of the cost of the hospital.
While the decision to proceed nonetheless with phase two had now been taken, the Government was listening to ensure it learned lessons, he said.
‘We’ve asked an independent firm, PwC, to inquire into the mistakes that were made,’ he added. But he stressed: ‘I do not think it is helpful to start naming individual firms in this House and to start apportioning blame before we have the full, clear picture of what happened.’
Mr Wallace said that if the Government stuck with the existing contract, it would ‘cost a lot more’ than €1.7billion. ‘I do not expect the overall cost to stop at €2.2billion,’ he added.
The Irish Daily Mail offered right of reply to the Dáil remarks to the main contractor, but had not received a response at the time of going to print.
‘Mistakes were made’