The new National Children’s Hospital (NCH) is due for “substantial completion” next February but will not be able to admit patients until August 2025 at the earliest, the Dáil’s public spending watchdog has been told.
The project, originally due to have been completed by 2020, has been beset by delays – some due to the Covid-19 pandemic – and spiralling costs.
In an update on Thursday, David Gunning – the chief officer of the organisation overseeing the project, the National Paediatric Hospital Development Board (NPHDB) – told TDs at the Public Accounts Committee that the main contractor, BAM, has “indicated a further delay to the substantial completion date”.
This new date is February 2025. However, Mr Gunning said the contractor has not provided a programme to the board, only a substantial completion date, and so he is unable to express confidence as to whether or not that new timeline is realistic.
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Speaking in the Dáil, Tánaiste Micheál Martin said the “bottom line” for delays and increased costs on the NCH was that BAM “has not resourced this project sufficiently for quite some time”.
Mr Martin said the contractor had delayed the project and he called on BAM “to resource the site adequately and comprehensively to enable this hospital to be completed as fast as we possibly can.”
In a statement on Thursday afternoon, BAM rejected the suggestion that the project was under-resourced.
“To accommodate the level of ongoing design change and the implications this has on the delivery of our agreed work programme, the project is currently resourced at 54 per cent above the anticipated levels for this stage,” the statement said.
“Any suggestion that BAM is deliberately not committing adequate resources to the project or is in any way slowing down delivery of the hospital, is completely untrue.”
BAM said design change – ordered by the development board – is the primary reason for delay.
“It remains a significant challenge, with weekly change orders or change instructions from the client occurring throughout 2024,” it added.
Mr Gunning said there was a “lever” available to the development board called liquidated damages, which is a payment the contractor would pay to the board based on a weekly cost of delays upon completion of the project.
Within the contract, there is provision of €300,000 payment from the contractor to the board per week of delay.
Mr Gunning said operating on a 29-month delay, €21 million is the approximate figure that is likely to accumulate, though this could be slightly higher by completion date.
However, Mr Gunning said he expects there to be a legal battle once the board “attempts” to levy this on the contractor. “I fully expect the contractor to oppose that process. It’s not without challenges.”
The NPHDB said about 1,600 claims for additional payment made by BAM in relation to the project were already subject to a dispute management process.
However, it said, so far the net change to the overall contract value including conciliations and adjudications had been approximately €27 million – 3 than three per cent of the original contract value.
Mr Gunning told the PAC it was “robustly defending claims that are without merit and/or inflated to prevent cost escalation and to protect the public purse”.
According to Phelim Devine, project director of the NPHDB, the contractor has, over the past eight months, completed about 60 per cent of the work due to be completed within that timeline.
“We have told the contractor that in our view more resources are required,” he said.
Children’s Health Ireland previously said commissioning the hospital – which largely takes place after the substantial completion date – will take at least six months, and possibly up to nine months.
Eamonn Quinn – principal officer, major capital projects at the Department of Health – told politicians at PAC “we have to believe” the hospital will open in 2025, stating there was a need to hold the contractor to its obligations.
He said by his maths, once commissioning was completed, it would be August 2025 before the hospital could admit patients.
There was an “opportunity cost” as well as a financial one, he said, adding: “We need to get patients into this hospital.”
Earlier this year, the Government confirmed the cost of the NCH had risen again. The total capital and current budget sanctioned for the project is now €2.24 billion. Prior to this, the last publicly available estimate for the total cost was €1.7 billion.
Included in this are the design build and equipping costs, including satellite centres at Tallaght and Connolly hospitals – which are already open; the cost of building the main hospital beside the St James’s Hospital campus; and a separate €360 million for the integration and transition of services to the NCH.
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