Claims for additional costs from builders of new children’s hospital now total €554m

The builders of the new national children’s hospital (NCH) have now made claims for additional costs totalling €554 million for the project.

The figures for the total claims submitted by the builders for assessment were provided to the Dáil's Public Accounts Committee (PAC) by the chief officer of the National Paediatric Hospital Development Board (Nphdb), David Gunning.

There has been controversy over the hospital project for years amid spiralling costs as well as delays that mean that the Dublin hospital will not now open for patients until the second half of 2024 at the earliest.

There is concern that the construction cost of the NCH will be much higher than the €1.433 billion most recent official estimate when delays – some caused by the Covid-19 pandemic – and other issues like inflation in the cost of construction materials and Brexit impacting on the supply of goods and services are factored in.

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The main building contractor, BAM, has been making claims for additional costs. These claims are referred in the first instance to an Employers’ Representative (ER) to make a determination on whether the contract sum for the project should be adjusted as a result.

In a letter to the PAC, Mr Gunning said that at the end of January 2022 there were 1,023 claims and adjustments totalling €554 million issued by the builders to the ER for determination.

The ER has issued determinations for 862 of those claims and adjustments, deciding that €19.9 million should be paid to the contractor. Some €11.3 million of this are provisional sums.

The ER has also determined that claims and adjustments with a combined value of €5.5 million should be credited to the Nphdb.

Mr Gunning said: “Therefore, the net position as at January 31st for determined claims and adjustments equates to €14.4 million.”

Next stages

The letter also outlined how 714 claims have been referred to the next stages of the dispute management process.

Mr Gunning said: “Every construction project, big or small, receives claims and adjustments from the contractor and this project is no different.

“The Nphdb has a robust process in place for the assessment of claims and adjustments by the contractor and has extensive project controls to help manage costs. These processes help to manage and defend costs so that the project can reach the best possible outcomes.

“Where the contractor is entitled to costs under the contract, the Nphdb has been discharging payments.

“The employer/Nphdb is also entitled to submit claims where it believes it is merited, to the process.”

Mr Gunning said there was an agreed dispute-management process in place between the Nphdb and the main contractor.

“As this process is governed by a confidentiality clause and as any dispute may be subject to future litigation, limited detail of these disputes is available,” he added.

Asked about the claims, a spokesman for BAM said: “Under the terms of the contract, BAM is precluded from making any comment.”