The contractor at the National Children’s Hospital has submitted 906 claims worth 446 million euro, on top of the estimated construction costs of more than 1.4 billion euro.
The National Paediatric Hospital Development Board (NPHDB), which oversees the project, is spending 15 million euro fighting the claims, which could push the cost of the facility towards the two billion euro mark.
At a meeting of the Dail’s Public Accounts Committee on Tuesday, officials from the NPHDB and the Department of Health again refused to disclose the latest total cost of the project, citing commercial sensitivity.
Chief officer of the NPHDB David Gunning warned of “inadvertently giving targets to the contractor that they look at with a great degree of desire to land”.
Mr Gunning told the committee that contractor BAM has submitted 906 claims with a total value of 446 million euro.
“Claims are a part of construction contracts. If the contractor considers that under the contract there should be an extension of time, or an adjustment to the contract sum, or that if the contractor has any other entitlements in connection with or under the contract, the contractor submits a claim,” he said.
However, he said those costs are not guaranteed to be awarded to the contractor, and will be fought by the NPHDB.
“One of our main tasks, I would say, is defending each and every one of these claims,” Mr Gunning said.
“The claims defence, the budget put in place for that was of the order of 15 million euros.”
He added: “We believe this money is well spent to save the state money longer term and defend each and every one of these claims.”
A moratorium is currently in place on those claims, agreed by all stakeholders, with a view to focusing efforts on opening the National Children’s Hospital in 2024 – 14 months later than is set out in the contract.
Any elongation of the programme will lead to additional costDavid Gunning, NPHDB
“This does not remove the risk of claims, nor does it mean that we will not continue to receive claims,” Mr Gunning said.
The hospital, which is being built on the site of St James’s Hospital in Dublin, has been beset by spiralling costs that have escalated to 1.433 billion euro.
The committee also heard that the Covid pandemic and Brexit will place “pressure on the availability of essential supplies” which will have a potential impact on the project’s cost and delivery timelines.
“Any elongation of the programme will lead to additional cost,” Mr Gunning said.
Many TDs and Senators criticised officials from the NPHDB and the Department of Health for their refusal to reveal the latest costs of the project.
Sinn Fein TD Matt Carthy said the department had repeatedly provided cost updates in the past, including 800 million in 2016, 983 million in 2017 and 1.43 billion in December 2019.
“Were you not cognisant of commercial sensitivities at that stage?” he asked.
Fiona Prendergast, an official at the Department of Health, replied: “At that stage, the contract either had not been signed, or we were in an early stage.
“We’re midway through a contract with the main contractor at this stage, and it is not appropriate to now consider discussing this in open forum.”
Mr Carthy responded: “Do you have any idea how crazy that sounds?
“That you are able to give an estimated cost before and at the early stages of a project, but at the heart of the project, that has been severely delayed, commercial sensitivities mean that the people who will be paying for this hospital, i.e. the taxpayers of Ireland, can’t be informed as to what the potential maximum cost will be.”
Ms Prendergast replied: “It’s very difficult to tell what the maximum cost will be given the uncertainties outlined by ourselves and Mr Gunning, in the context of Covid, Brexit, inflation etc.
“There will be full and total accountability in relation to the cost of this hospital in due course.”