‘Bad business’ for State to allow main children's hospital builder to step down

New board head says no scope for savings and cites ‘diminishing returns’ at this stage

National children’s hospital new board head, Fred Barry, says: “I don’t think it would be good business for the State to stop the works and retender it.” Photograph: Collins

National children’s hospital new board head, Fred Barry, says: “I don’t think it would be good business for the State to stop the works and retender it.” Photograph: Collins

 

The new head of the national children’s hospital board has said it would be “bad business” for the State to allow the main builder of the hospital to step down from its role.

The chair designate of the board Fred Barry, who is appearing before the Oireachtas Committee on Health this morning, also said that there was an “underestimation” from a very early stage in relation to what the project would cost, leading to an increased bill of € 1.73 billion up from the estimated € 800 million cost in 2014.

Bam, the construction firm, said last month it would step down from the construction of the hospital if the board asked it to do so.

Labour TD Alan Kelly asked Mr Barry this morning for his opinion on the offer, given his new position.

“My view is that if we were to negotiate the termination of the main contract and go to retender that it would take an absolute minimum of a year and a half and could in fact take two years or more to get a new contractor,” Mr Barry said.

“The State would be picking up the extra inflationary cost, carrying the cost of the development board and Children’s Hospital Ireland board, the current contractor would have to be paid for demobilising, there are a lot of equipment items on order and the State wold have to pay cancellation costs for those.

“I don’t think it would be good business for the State to stop the works and retender it.”

Underestimate

Fianna Fáil TD Stephen Donnelly questioned Mr Barry around why the cost of the project had risen so significantly.

“As far as I can judge, what happened here was an underestimation of scope of project from an early stage compounded by initial tender documents which didn’t properly pick up the full scope (of the project).

“You would like in any circumstance to have more of the total cost determined through competitive tendering rather than partially competitive tendering.”

Despite this, Mr Barry said he did not think the cost would have ended up being much different from its current cost.

He also indicted to committee members that there may not be scope to make savings to the current costs stating that efforts were made to make savings at an early stage and at this stage “we are into diminishing returns”.

Fine Gael TD Fergus O’Dowd said if the project were to stall now, it would be “a national disaster.”