Lack of Covid-19 compensation unfair, says children’s hospital contractor

Construction on €1.7bn site yet to resume as Bam Ireland claims restrictions make delays inevitable

Construction at the national children’s hospital site at St James Hospital, Dublin. File photograph: Dara Mac Dónaill

Construction at the national children’s hospital site at St James Hospital, Dublin. File photograph: Dara Mac Dónaill

 

The main contractor developing the new national children’s hospital has said it is “unfair” that it is not being offered compensation for the additional construction costs on foot of Covid-19 public health restrictions and that this needs to addressed urgently.

Bam Ireland said on Friday that the Government had agreed to make ex-gratia payments to companies building other public projects.

However, it said no such compensation payments for the restrictions – which would allow fewer workers on site and lead to constructions delays – were being made in relation to the children’s hospital which is being built at the campus of St James’s Hospital in Dublin.

Construction work has yet to resume on the €1.7 billion facility, seven weeks after coronavirus restrictions on the building sector were eased, because of a dispute between the main contractor and the board of the hospital.

The board indicated earlier this week that there would be further delays to the completion of the hospital but added it was “too early to fully assess the time or cost impact of the pandemic”.

No work has been done on site since March 31st when construction work across the State came to a halt as part of measures to contain the spread of Covid-19. This industry-wide restriction was lifted on May 18th but almost two months later work has yet to resume at the hospital site.

In a statement on Friday, Bam said it and its major sub-contractors were “most anxious to proceed with the vital works at the national children’s hospital as expeditiously and economically as possible within the new mandatory Covid-19 requirements”.

It said significant preparatory work had been undertaken at the site in recent weeks to meet these requirements and ensure it was ready to recommence.

Bam said the hospital was by far the largest construction project in the State and that at peak of construction it was anticipated that it would need more than 2,000 people on-site.

“As a consequence of the Government restrictions which are required to keep workers, their families, the St James’s Hospital community and the neighbourhood safe during Covid-19, and in particular to observe the requirements of social distancing, it is evident that no more than half of that number (1,000 staff) can be safely deployed on site.

“Given the progress on the site in the months prior to lockdown, a significant proportion of the current work is indoors or covered and this may further reduce the number of workers that can be safely engaged.”

Bam said that “the consequences of these public health restrictions are significant delays which will continue until there is a vaccine widely available, as well as additional costs on a once-off and ongoing basis”.

‘Unclear’

The company maintained that the Government had recognised this issue “by confirming it will make ex-gratia payments to contractors on public works contracts throughout the country to meet these costs”.

“The National Paediatric Hospital Development Board has confirmed that these payments will not be available to Bam on this project. It is unclear why the national children’s hospital has been excluded from this compensation regime.

“The board has confirmed that its view is that the contract has no mechanism for dealing with this issue, and it makes Bam responsible for the entire Covid-19 impact. This means there would be no compensation for the extra costs incurred, or extensions of time allowed for the inevitable delays and resulting damages payable to the client (Liquidated Damages) on the project. This is unfair and must be addressed as a matter of urgency.”

The National Paediatric Hospital Development Board (NPHDB) said on Thursday contractors Bam Ireland should return to the site “without delay” and the matter should be put to the dispute management process in the meantime which, the board said, was agreed when the contracts were signed.

The hospital is scheduled to be finished by the end of December 2022 with the handover to the State in early 2023.