No final figure yet on cost of National Children’s Hospital

Vast majority of contractor claims ‘overinflated’, Oireachtas committee hears

Sinn Féin said it is ‘shocking and damning’ that the Coalition does not have an up-to-date estimate for the project. File photograph: The Irish Times

Sinn Féin said it is ‘shocking and damning’ that the Coalition does not have an up-to-date estimate for the project. File photograph: The Irish Times

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The final bill for the new National Children’s Hospital is still “some distance off” because of disputes with the building contractor over costs, Minister for Public Expenditure Michael McGrath has said.

The most recent official figure for the cost of the project was €1.433 billion. However, contractor BAM has submitted a significant number of claims for extra payments.

BAM has lodged nearly 900 substantiated claims worth €514 million, said Mr McGrath. “These are the value of the claims made by the contractor, those have not been agreed or approved,” he said.

Speaking to the Oireachtas finance committee on Wednesday, Mr McGrath said 700 of the additional bills had been priced at just €15 million by the National Children’s Hospital’s development board.

But those judgments have been contested by BAM, who have referred 650 of them to a dispute management process set out under the contract, according to Mr McGrath.

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The vast majority of contractors’ claims had been deemed “overinflated” by the development board overseeing the project, he told the committee.

“Where we believe as a State they are unwarranted and unjustified then we are defending the State’s position . . . but this will take some time to work its way through the system,” he said.

The €514 million in claims did not represent an increase in the cost of the project, as the majority are being “contested” by the State, he said.

Mr McGrath said it would be “very wrong and indeed unwise” for him to put a figure on how much the State estimated eventually paying out regarding the claims, as that would be seen as a “target” by the contractor.

Sinn Féin reaction

Sinn Féin TD Pearse Doherty asked Mr McGrath if he could provide assurance the project’s final cost would remain under €2 billion.

The Minister replied that he would not be drawn to give a “guesstimate” of the final cost. “We are some distance off arriving at what is a final estimate of delivering the cost of the children’s hospital,” he said.

Mr Doherty added it is “shocking and damning” that the Government does not have an up-to-date estimate for the project. “I’m not asking you to land at a figure, I’m asking you to give assurance to the public . . . that it will not go beyond the €2 billion figure. The fact that you can’t say that shows we do not have the processes in place to manage capital projects,” he said.

Separately, Mr McGrath said Minister for Housing Darragh O’Brien was to bring details of a redress scheme for homes affected by mica in building blocks to Cabinet next week.