Children’s hospital costs spiral by €200m as it is hit by further delays
THE National Children’s Hospital has been hit with further delays and costs have again spiralled by several hundred thousand euro, an Oireachtas committee heard yesterday.
The project should now be half-way completed but it has only reached a third of its completion.
Since the pandemic hit in March, hundreds of claims for additional payments worth over €200million have been submitted by the main contractor BAM.
It was also revealed yesterday that in the period after construction restrictions were lifted due to the pandemic, when construction firm BAM did not resume work on site, the board had considered terminating the project.
The updated cost and completion date of the National Children’s Hospital (NCH) now won’t be known until early next year.
Yesterday, representatives of the National Paediatric Hospital Development Board (NPHDB) and Children’s Health Ireland appeared before the Oireachtas Health Committee to give an update on how the controversial 12-acre development at St James’s campus in Dublin is progressing.
Chief Officer of the NPHDB David Gunning said that there is ‘no expectation’ that the project will meet its completion date of August 2022.
He repeatedly declined to say when the new completion date might be, or when the updated costs of the project might be available.
Mr Gunning highlighted that BAM had not provided the board with a compliant valid works programme, as per their contract.
When asked if this means that BAM is in breach of its contract by Sinn Féin’s David Cullinane, Mr Gunning replied: ‘What we are saying on that particular issue, the contractor is not complying with its obligations. You could call it a breach [of the contract].
‘The remedy for that breach is the withholding of 15% of payments [every month] which the development board is applying.’
If the contractual programme had been followed, the board would have paid BAM €545million up to the end of October. The actual payment is €308million.
Mr Gunning said: ‘We would have expected by now to have the frame, the concrete, the steel, the f acade, various other things moved on and they are nowhere near the level of completion that we would expect.
‘ I nstead of being half- way through the project we’re a third of the way through the project. These are the clear metrics indicating where the challenge is.’
The repeated delays and claims by BAM for additional money for various issues are expected to have an impact on the already sizeable €1.433billion budget.
According to Mr Gunning, BAM has submitted over 600 claims for additional payments worth an estimated €200million. He said some of these claims were worth tens of millions but a large proportion were for smaller amounts.
‘We cannot stop the contractor putting in claims. Our responsibility is to defend those claims and we are doing that robustly and quite effectively,’ he said.
‘ The smaller ones might be something around disagreements around the costs for a particular piece of equipment or a particular structural issue or specification for a wall finish or a piece of joinery. Should this be borne by the contractor or should it be borne by the employer?’
According to the board, even before Covid forced the shutdown of the site, construction work was already behind schedule.
‘In March of this year, when the main contractor closed the site as a result of the Covid-19 restrictions, the delay on the NCH project had increased to approximately six months,’ he said.
During that period, BAM sought additional money from the board to cover Covid costs.
‘We have not acceded to the payment of any of these additional costs. However, this now finds its way through the dispute resolution process. That process is active and under way,’ he said.
It was also revealed that in the period after construction restrictions were lifted, when BAM did not resume work, the board had considered terminating the project. ‘During the course of discussions and while BAM was absent from the site or had failed to resume works, the development board reviewed all the options open to it from engaging with the contractor right through to the termination option,’ said Mr Gunning.
Following the briefing, co-leader of the Social Democrats Róisín Shortall TD said the board’s appearance was ‘highly unsatisfactory’. ‘Given the evidence we have heard here today, it is not credible for the board to talk about working towards the original completion date. More than
‘Contractor not complying’ ‘New amendments added all the time’
nine months of progress has been lost this year alone and who knows what else is going to hold this project up.’
In a statement last night, BAM said it was ‘fully committed’ to completing the hospital ‘as quickly and efficiently’ as possible but took issue with comments made at the committee meeting.
It stated that it has submitted ‘several programmes’ and has updated them every month. It also claimed that it has still not received a complete and co-ordinated design for the project and ‘new amendments are being added all the time’. ‘Therefore, it is hardly surprising that there are hundreds of notifications from BAM and its major subcontractors of potential additional costs/delays.’