Children’s hospital row grinding big projects to a halt, says Sisk

Fallout from the row over the €1.7 billion bill for the national children's hospital is slowing infrastructure spending and threatens Government development plans, says Steve Bowcott, chief executive of builder Sisk.

Profit at Sisk's parent, Sicon Ltd, grew 6 per cent last year to €28.3 million, while turnover rose 24 per cent to €1.17 billion, on the back of growth in its Irish, British and international businesses.

Mr Bowcott warned that slower decision-making in Government departments on big construction projects such as national roads threatened to grind infrastructure development to a halt, particularly outside Dublin.

“We think it’s probably nervousness over what procurement route to go down,” he explained.

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Mr Bowcott added that Sisk believed this stemmed from questions raised about how the State recruited builders for big developments following revelations that the cost of the national children’s hospital would hit €1.7 billion.

However, he argued that there was nothing wrong with the method used to hire the contractors for the hospital.

Mr Bowcott noted that for the first time in Sisk’s history, it earned more revenue last year from projects outside Dublin than within the city.

“It was €400 million in the regions and just over €300 million in Dublin,” he said. “But in terms of what will happen in 2019 and 2020, we just can’t see that being sustained.

"We are seeing infrastructure projects going further and further backwards." He warned that Project Ireland 2040, the Government's €116 billion development plan, would be "pushed back".

Social housing

Mr Bowcott argued that Government departments and State agencies could still get on with designing key projects, such as the Cork-Limerick motorway, while they waited for the procurement issue to be thrashed out.

Meanwhile, he confirmed that Sisk was interested in building the social housing earmarked for Poolbeg, where the National Asset Management Agency plans to fund more than 3,000 new homes on a site near Ringsend in Dublin.

The agency signalled recently that it intended seeking partners to build the dwellings, including about 350 social and affordable homes. “We only build social housing, we don’t build houses for sale,” Mr Bowcott said.

“We would like to be a part of Poolbeg, but we want somebody prepared to take the risk on the houses for sale to bid with us as a partner.”

Sisk recently finished the Capital Dock apartment and office complex on Dublin’s quays, which includes Ireland’s tallest residential tower.

It also worked on the Centre Parcs resort in Co Longford, new stands at the Curragh Racecourse in Co Kildare and a series of projects for pharmaceutical giant Johnson & Johnson in Cork.

Big player

In Britain, where Sisk is a big player in social and affordable housing among other markets, the company’s projects include working with developer Circle Square on a large scheme in Manchester and with Quintain on two apartment complexes in Wembley, London.

Britain generated €395 million of Sisk’s sales last year. Mr Bowcott said that the company saw no real risk from Brexit, as the construction market there is worth about €90 billion and continues to draw investors.

He predicted that its European business would grow from around €90 million this year to €200 million in 2020. Sisk works with existing clients such as Johnson & Johnson, Penneys owner Primark and tech giants Microsoft and Facebook on the Continent.

The company does either project management or building. Mr Bowcott pointed out that it uses a lot of Irish professionals for this work.