Builder of National Children’s Hospital could be hit with financial sanctions over continuing delays

The hospital faces further a delay in completion, with next February now stated as the new completion date.

David Gunning of the National Paed­iatric Hospital Development Board (NPHDB) was responding to questions at the Public Accounts Committee (PAC) on why it had not taken actions against contractor BAM, which has missed the latest completion promise of October.

He told Social Democrats TD Catherine Murphy that there is a “process” and said it has previously imposed fin­ancial sanctions.

“All options are on the table and a decision is imminent,” he said, adding that the rolling penalty that could be applied for delay could be in the “low 20 millions”.

TDs said it appeared the construction company had the upper hand and the board should be able to hold their “feet to the fire”. They likened the pace to a “slow bicycle race”.

The meeting heard there had been 23,000 design changes and that delivery of the plan in the last six months was running at just 60pc with around 1,100 workers on site, but this is not enough.

In response to the claims, BAM said it wanted to clarify a number of points made at the meeting, and it rejected accusations it was not putting enough resources into the work. It blamed design changes for driving delays.

In its statement, it said “the build phase of the hospital is now more than 92pc complete, as indicated in our monthly progress reports to the development board”.

It added: “BAM is fully committed to the efficient completion of this ­critical piece of medical infrastructure. We have always fully resourced this project beyond the level required for the original programmed works – largely to cope with the high level of design change and disruption – and will continue to do so until the building is completed.

“To accommodate the level of ongoing design change and the implications this has on the delivery of our agreed work programme, the project is currently resourced at 54pc above the anticipated levels for this stage. Any suggestion that BAM is deliberately not committing adequate resources to the project or is in any way slowing down delivery of the hospital is completely untrue.”

It said the company has repeatedly highlighted design change as the primary cause of delay and disruption on the project.

“This was also raised in the 2019 PwC review as a key issue. It remains a significant challenge, with weekly change orders or change instructions from the client occurring throughout 2024,” it added.

“BAM is the build-only contractor for the hospital. The NPHDB remains the lead agency for design and delivery of the National Children’s Hospital.

“Predictability regarding the completion of the final design information is essential to achieving certainty of the completion timeline of any construction project and it is highly unusual to see this level of change at such an advanced stage of construction.”

It also defended the claims it had submitted for additional payments of over €785m. It said: “BAM is obliged under the terms of the contract to raise any variation, including instructions, with a time or cost implication as a ‘claim’. These must be itemised on an individual, change-by-change basis.”

The meeting heard there were 2,782 extra claim costs, of which 2,182 have been valued at a cost of around €785m.

Only a small number of the claims have been assessed as in favour of BAM at over €22.8m.

The PAC was told the net change to the overall contract value is around €27m, including conciliations and adjudications on extra claims. Other claims are in a disputes-management system and two proceedings are before the High Court.

BAM said it is “ fully committed to delivering this world-class hospital for the children of Ireland within the shortest possible timeframe”.

However, speaking in the Dáil yesterday, Tánaiste Micheál Martin said BAM had not resourced the hospital site adequately for some time and was “delaying” completion of the project.

He said the various deadlines set by BAM were “likely to be part of a commercial strategy by BAM to try and extract more money and more funding from the Irish people”.

Mr Martin called on the contractor to resource the site “adequately and comprehensively to enable this hospital to be completed as fast as we possibly can”.

However, he was told by Sinn Féin that the project had been “a slow-moving car crash since day one”.

Pearse Doherty of Sinn Féin reminded the Tánaiste that Leo Varadkar said many years ago that “short of an asteroid hitting the planet”, the National Children’s Hospital would be built by 2020.