The main construction company building the new national children’s hospital should receive an additional payment of €107 million, an independent conciliation process has recommended.
The Irish Times understands the conciliator proposed in recent days that the sum should be paid to building firm BAM which had sought further payments for delays in the project until the early part of last year which could be attributed to the client.
It is understood this is the most significant additional payment to be recommended under the conciliation/dispute management provisions in the hospital building contract.
The new children’s hospital has been beset by delays and cost overruns. Substantial completion of the project is not now expected until next February with the first patients unlikely to be treated there until autumn 2025 at the earliest.
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In February Minister for Health Stephen Donnelly said the cost of the project had gone up by €500 million, taking the final bill to €2.24 billion.
Some TDs fear that ultimately the final cost will be higher, especially in the light of revelations surrounding the new recommendation by the conciliator.
Details of the €107 million recommendation were not given to the Dáil Public Accounts Committee when it heard from the National Paediatric Hospital Development Board (NPHDB) on Thursday.
[ Delivery of new national children’s hospital set to be further delayedOpens in new window ]
It said about 1,600 claims for additional payment made by BAM in relation to the project were subject to the dispute management process.
However, it said, so far the net change to the overall contract value including conciliations and adjudications had been approximately €27 million - less than 3 per cent of the original contract value.
It is understood the board believed the recent conciliator’s recommendation remained confidential as it could still be appealed.
The NPHDB told The Irish Times the dispute resolution process was highly confidential. “Therefore the NPHDB is precluded from commenting.”
Labour Party TD Alan Kelly, who questioned members of the NPHDB about conciliation recommendations on Thursday, said on Thursday night it was deeply concerning that new information about costs had emerged within hours of the committee hearing.
Mr Kelly said there were also potentially hundreds of millions more in other claims that still had to be determined in the arbitration process.
Mr Kelly said he had lost confidence in Mr Donnelly in his handling of the new children’s hospital project.
Tánaiste Micheál Martin said BAM had “not resourced the project sufficiently for some time.
NPHDB chief officer David Gunning told the PAC it was “robustly defending claims that are without merit and/or inflated to prevent cost escalation and to protect the public purse”.
The NPHDB said under the dispute management process, when a recommendation was made parties had 20 days to respond.
It said if any party was dissatisfied with a recommendation that involved a payment, the transfer of money was conditional on the initiation of court proceedings and the provision of a bond for the sum involved.
“To speculate that there could ultimately be an increase to the contract sum at this stage due to the ongoing conciliation is premature and is not correct.”
Asked on Thursday about the conciliator’s decision, BAM declined to comment.
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