The National Children’s Hospital is being held like a “hostage” in negotiations with lead contractor BAM, the chief officer of the development board has said.
The National Paediatric Hospital Development Board (NPHDB) has accused BAM of under-resourcing the project and failing to deliver on its contractual obligations.
A fresh row over the hospital emerged after it was claimed that not one of the facility’s 5,500 rooms is finished to the expected standard.
The beleaguered development has been delayed on 14 occasions – four of which occurred within the last year.
The projected costs of the hospital have spiralled to €2.2 billion, up from an initial estimated price tag of €650 million in 2014.
The current completion date of the hospital, billed by the Government as “state-of-the-art”, is set at a contested June 2025.
Following completion, there will be an approximately six-to-eight month commissioning period before the site is ready to accept children as patients.
The NPHDB has responsibility for engaging with BAM on behalf of the Government.
It has said that main delay around the hospital is insufficient resourcing from the contractor. BAM claims that thousands of design changes from the Board have delayed the project.
NPDB chief officer David Gunning told the Oireachtas Health Committee on Wednesday that BAM will “not be given another cent beyond what it is entitled to”.
Mr Gunning, who said he spoke to BAM Ireland’s chief executive on Tuesday, maintained that there had been no “significant design change” from the beginning of the project.
The board accepts that there had been changes to drawings, for which Mr Gunning said the contractor had been paid “over and above the agreed price” for additional resourcing.
Mr Gunning said: “We do not agree that design change is the cause of delays on this project. We simply don’t buy it.”
On the contractor’s commercial strategy, he added: “It is almost as if BAM will slow down the progress and, you know, the hospital is the hostage in this negotiation and it’s only if additional monies are paid that we can get this hospital done completely.”
Mr Gunning said he had “never seen anything like this” and told Senator Martin Conway: “We’re sick of it. We have been dealing with this day in and day out. Commitments made, commitments missed.”
He said the Board does not have a detailed programme on how BAM plans to execute the last 10 months of the project.
“Without that detail, I certainly would not go so far as to give any assurance to this committee in terms of the bankability or the confidence in the June ’25 date.”
Mr Gunning said the timeline could be secured if the project was appropriately resourced by BAM, but claimed the contractor is “consistently failing to deliver on its planned commitments”.
In particular, he said the contractor continually insists on describing areas within the hospital as finished when they are incomplete.
“As of today, not one room has been fully completed in line with the standard and finish as set out in the contract,” he said.
“There are 5,678 clinical spaces in the new hospital and whilst to date BAM has offered 3,128 as complete, none were completed to the required standard.”
It follows a series of inspections of rooms that were presented as complete.
Phelim Devine, the board’s project director, said rooms can only be considered complete when they are “as close to snag free within reason”.
However, he said outstanding issues with the rooms are not akin to “scuffs of paint”.
He told the committee that examined rooms have on average 13-15 defects including fire sealing, ventilation, and incomplete works above ceilings.
In addition, BAM has made 3,020 claims over project changes which could drastically increase the cost of the hospital. Of these, Mr Devine said 2,473 had been substantiated by the contractor at a total of €862 million.
The employer’s representative has determined 2,190 of the claims worth €748 million, of which just €31 million in extra cost has been awarded towards BAM.
There are around 280 substantiated claims outstanding.
Under questioning from Social Democrats TD Róisín Shortall, Mr Devine said there were 6,000 drawings relating to the project which have been revised up to three times – for more than 23,000 updated drawings.
He rejected that these were “design changes” and said they may involve additional information or “tweaked positions”. However, he said there had been 469 “change orders”.
Ms Shortall described the distinction as “pedantic” given that the contractor is entitled to claim for the updated drawings.
Mr Devine said the independent employer’s representative has determined that there had been about 4 per cent of design change on the contract, but the contractor had pushed out the end date by 66 per cent.
Mr Gunning accused BAM of a “continued unwillingness to resource the project appropriately”.
He said BAM has not provided a compliant “baseline programme” outlining its approach and timeline for remaining works underway.
“It shows a complete disregard for internationally recognised professional processes and contractual procedures,” he said.
“The approach being taken by BAM also shows complete disregard for sick children and young people and their families – as well as the dedicated and excellent staff in Children’s Health Ireland.”
Meanwhile, Mr Gunning said BAM continues to submit “large volumes of claims”, including triplication of claimed time and value.
“It is the view of the NPHDB that BAM is seeking to implement a strategy to exert pressure on the State to secure additional monies above the contract sum, by whatever means,” he said.
The chief officer said the NPHDB is doing everything in its power to compel BAM to fulfil its contractual responsibilities, adding that it is “robustly defending” the claims it considers to be without merit or inflated.
Mr Gunning, who said his message to the contractor was “not one penny more”, said he could not possibly know if the price tag would increase following further legal challenges.
The €2.2 billion figure includes €1.88 billion for the NPHDB component of completing construction, as well as hundreds of millions of euros for the full commissioning of the building.
The NPHDB will hand the site over to Children’s Health Ireland following the completion of the hospital.
Mr Gunning said he was “confident” that the current €1.88 billion funding allocation will be “sufficient” to complete the project, which is described as 94 per cent complete.
However, he told the committee that he could not guarantee that costs of the project would increase following the resolution of legal claims from the contractor.
Asked by Fianna Fáil TD John Lahart if he would recommend BAM for future State infrastructure projects, Mr Gunning referenced the rules around making comments at committees and said: “I don’t believe I should answer that question.”
More generally, he said there was “merit” to proposals suggested by Minister for Health Stephen Donnelly that past performance should be considered when awarding State contracts.
