€480m claims by National Children’s Hospital contractor yet to be resolved

€480m claims by National Children’s Hospital contractor yet to be resolved

Nearly €480m worth of claims made by the main contractor for the new National Children’s Hospital are yet to be resolved.

New figures provided by the National Paediatric Health Development Board (NPHDB), the body with responsibility for the delivery of the project, state that 1,095 claims taken by contractor BAM, totalling over €461m, have been referred to either the project board or conciliation for decision after exhausting the first stage of the dispute process.

A solitary case valued at €45m remains before the High Court, bringing the overall total in dispute to €506m.

Some €28m of that figure has since been awarded to BAM, which has chosen to dispute the remaining €478m.

The large amount of costs claims lodged by the contractor since construction began at the hospital site at St James’s campus in south Dublin has been a source of much controversy for the duration of the €1.7bn project.

To date, 1,875 claims have been lodged, according to a briefing note supplied to the public accounts committee (PAC) by the NPHDB, with 1,541 of those having been “substantiated” and “issued for determination”.

However, while €509m worth of claims were ruled upon at the first stage of the dispute process, involving the adjudication of an ‘employers representative’, the aforementioned €506m was subsequently referred to the next stage by the contractor.

Should decisions arrived at by either the project board or at conciliation fail to be agreed upon, the only remaining avenues are adjudication or recourse to the courts.

In May 2021, BAM agreed to temporarily suspend its costs claims in order that both sides of the project could engage with the other in order that the hospital could be delivered in the shortest possible timeframe.

In its note to PAC, the NPHDB confirmed that the moratorium, which had initially been slated to last just five weeks, had finally come to an end for “high-value delay related disputes” after 20 months in January, with a number of such claims having been lodged since that date.

Progress has ‘advanced significantly’

“Progress on the construction of the new children’s hospital has advanced significantly and the major focus in 2023 is the internal fit-out and commissioning of mechanical and electrical services,” David Gunning, the NPHDB’s chief officer, said in his briefing note.

The building is now expected to achieve substantial completion by March 2024, with just the fit-out of the building to be finished before it can open its doors. 

Mr Gunning said an updated date for completion is due to be received imminently from BAM.

“The build is now well advanced in all areas. Fit-out is also at an advanced stage in all parts of the hospital and orders have been placed for all the specialist medical equipment that is integrated into the building,” he said.

The other large unknown pertaining to the project, its expected overall cost, was not addressed in the briefing note.

Since February 2021, the Department of Health and NPHDB have refused to speculate as to the final cost, stating that the release of such “commercially sensitive” information would be “very damaging to the State’s interests”, according to department secretary general Robert Watt.

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