National children’s hospital legal bill nears €2m amid disputes

The board overseeing the development of the new National Children’s Hospital has spent almost €1.7m in legal costs in less than three years, including defending itself against claims from contractors, according to new information.

In fresh documentation given to Social Democrats TD Catherine Murphy, the National Paediatric Hospital Development Board (NPHDB) also said it has issued a new request for capital funding to the HSE to ensure the project can be built.

Ms Murphy asked for details of the legal costs incurred by the NPHDB in challenging claims brought against it by contractors associated with the National Children’s Hospital.

She also asked if the board has made requests for extra funding for day-to-day operations.

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In documentation supplied to Ms Murphy, a spokeswoman for the NPHDB confirmed that €1.68m has been spent on general legal costs since 2021. This figure includes nearly €300,000 in legal fees from the start of 2023 to date. The board told Ms Murphy that since the start of the children’s hospital project there have been “significant numbers of claims”.

“Where the main contractor, BAM, is entitled to costs under the contract, the NPHDB has been discharging payments, but claims are being made on matters that we believe fall within its contractual obligations. We are using all levers available to us through the contractual process regarding the performance of the main contractor and to manage and defend against claims to protect the public purse.”

BAM has submitted approximately €750 million in cost claims which threaten to escalate the overall cost to almost €2.2 billion, The Irish Times previously reported.

The board pointed out that there is an already agreed dispute process in place between them and BAM around claims.

“As it stands, claims are now at all levels of the dispute mechanism process, which involve the employers representative, project board, conciliation, adjudication and the High Court. As they remain in the dispute management process, they are governed by a confidentiality clause and as they may be the subject of future litigation, we are therefore limited in disclosing this information at this time,” the board said.

The board said that a robust process is in place for the assessment of claims by the contractor.

“As communicated at the Joint Oireachtas Health Committee in July 2023 and at previous Dáil committees, the main contractor has been underperforming as regards project execution and has been extremely assertive as regards claims.”

There has been speculation that the cost of the hospital could top €2bn when claims, delays, inflation and supply issues are all taken into account. Politicians have been eager to also find out whether the project has surpassed its original budget of €1.43bn already despite not being finished.

To date expenditure on the hospital has reached more than €1.325 billion of an authorised capital spend stretching to €1.433 billion.

Answering questions about additional requests for funding, the board said that it is “currently operating within the Government-approved investment decision of €1.433 billion for the design, build and equipping of the new children’s hospital and the two outpatient and urgent/emergency care centres at Tallaght and Connolly hospitals”.

However, the spokeswoman confirmed that the board has submitted a request for capital funding to the HSE “to ensure that there are sufficient funds to bring the project to substantial completion”.

“This request is being considered by our stakeholders and the NPHDB is precluded from discussing the details of those figures. As we are in constant engagement with BAM, it may also be the case that to divulge detailed information on costs publicly at this time would be disadvantageous to the State’s position,” according to the board.

“The new children’s hospital project is the most complex construction project underway in Ireland and represents the State’s biggest single investment in healthcare. Communicating with all stakeholders throughout the planning and now the construction phase is essential,” the board told Ms Murphy.

The NPHDB also said that they have paid nearly €583,000 in PR costs since 2021, as they have appointed the company Q4PR.

The project has been beset by delay and controversy and more recently a breakdown in the relationship between the main contractor BAM and the NPHDB.