Multiple project overruns by BAM

Multiple project overruns by BAM

The Government has been asked to explain why the same construction company has been involved in cost overruns for major projects in Dublin and Cork.

Solidarity-PBP TD Mick Barry highlighted how estimates for three projects constructed by BAM had increased, as he called for a new national State agency to oversee major infrastructure builds.

Controversy has arisen over the costs for the national children’s hospital, which rose to €1.4bn late last year — an increase of some €450m. The project is being overseen by BAM.

Mr Barry highlighted how BAM is also involved in constructing an events centre in Cork City, a project marred by price hikes and delays. He told the Dail this cost had gone from €53m to €74m.

BAM is also constructing a new port for Cork, in Ringaskiddy, said Mr Barry. This build had risen by €12m to €58m. BAM claims this latter increase was an error.

Mr Barry explained that you have “a major construction company” and cost overruns with three major State projects.

“Why does this company keep getting lucrative state contracts?” asked the Cork North Central TD, adding that the situation underlines the need for a national State agency to oversee projects.

Finance and Public Expenditure Minister Paschal Donohoe said a company has a “right to participate” in a particular project.

Fianna Fáil health spokesman Stephen Donnelly zoned in on the design costs for the national children’s hospital, which he noted were highlighted by a special report into the project.

The Mazars report, he said, showed the increased costs had little to do with inflation, that no extra beds came with the bigger bill; and that the functionality of the hospital did not change.

Mr Donnelly said his assessment of the report was that some €230m-€240m in costs for the project were for design.

Design fees had gone from €44m in 2017 to €71m by late 2018, an increase of some 60%, he added.

Health Minister Simon Harris refused to comment on the design team and said he would await the outcome of a PwC probe into the cost overruns for the hospital.

He also pledged to the Dáil that the Government would attempt to reduce the €1.4bn bill for the project, as long as this does not reduce clinical benefits on the site. 

“We will not be found wanting in pursuing that [the cost].”

Mr Donohoe said the Government would be more sparing with two-stage processes for future project builds. It was pointed out that the Mazers report also addressed these concerns.

Sinn Féin TD Louise O’Reilly and Labour TD Alan Kelly said it is not credible that ministers or their officials had not raised the alert last year about escalating costs for the hospital build.

“If you had asked you would have known the costs were only going in one direction,” said Ms O’Reilly.

Mr Kelly said it was not credible that a senior public expenditure official, who was on the National Paediatric Hospital Development Board, had not raised cost concerns with Mr Donohoe.

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