Wallace says it is not too late to retender for children’s hospital and save €500m

The Government could save half a billion euro by retendering the contract to build the national children’s hospital, former builder Mick Wallace has claimed. The Independents4Change TD insisted that in the current contract “the Government has the potential for termination at will”.

He said “we have not reached the point of no return. We are really only starting”.

He warned that if the Government sticks with the current contract the cost would rise beyond €2.2 billion.

However, Tánaiste Simon Coveney said that as far as he was aware from the advice to Government "nobody is suggesting that by retendering we would get this done for less money".

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The TDs were speaking during leaders’ questions in the Dáil.

Mr Wallace said “if the Government stops now, which you are allowed to do according to the terms of the contract, and retenders you could save in the region of €500 million”.

The Government should opt “for a re-measurable contract rather than stick with a fixed price contract which will cost a lot more than €1.7 billion”. It was a big problem for the Government and “right now for [main contractor] BAM it is like picking apples in an orchard”.

The Wexford TD said the Government should look at the legal process and the “conflict of interest between the board and the legal firm involved”.

Fixed price contracts did not suit a job such as the construction of the hospital. “That gives unbelievable potential to the contractor to get extra money as it goes.”

Lessons

Mr Coveney said lots of projects had come in on time and on budget because the systems in place had developed significantly in the last seven to 10 years. Something had gone wrong in relation to hospital costs and they would learn lessons for future projects.

Mr Wallace said he would like the Minister to learn lessons for the present, and insisted that if it stopped now and retendered half a billion euro could be saved.

“The extra costs we are looking at now will be far exceeded in time if the Government continues along this road. The Government needs to stop and retender.”

The cost of the project has risen from an estimated €800 million in 2014, to €983 million in 2017, and €1.43 billion now. Equipping the building and providing IT pushes this bill up to €1.73 billion; this does not include the cost of family accommodation, a research centre, excess construction inflation and any other changes to clinical standards.