BAM to temporarily suspend costs claims on Children's Hospital project

BAM to temporarily suspend costs claims on Children's Hospital project

The new National Children's Hospital was first approved for construction in 2015 and had initially been slated for completion in 2020 at a cost of €650m.

The principal contractor on Ireland’s €1.7bn new National Children’s Hospital has agreed to a temporary suspension on legal claims relating to the controversial build.

The respite, which lasts until next month, has been agreed between contractor BAM and the National Paediatric Health Development Board (NPHDB) – the agency with responsibility for the hospital construction – after a wave of legal claims have threatened to derail the project.

David Gunning, the NPHDB’s chief officer, has told the Public Accounts Committee that he is “happy to report… that a period of moratorium on claims will apply”.

“This will be in place until June 2021,” he said, adding the delay has been designed to allow all parties “to engage all their energies on delivering the project in the shortest possible timeframe”.

“To date, the claims and conciliation process has engaged significant energy and resources,” Mr Gunning said.

He said that, while the moratorium does not remove “the risk presented by claims”, the hope is that it will ultimately “be beneficial to the project”.

800 legal claims

To date, BAM has lodged more than 800 legal claims totalling more than €300m in relation to the project, stemming from the shifting nature of the build’s requirements according to the contractor, while more than 450 of those claims have since gone to dispute resolution.

Close to 200 of those claims have been made since last November.

Last month, it emerged that BAM had taken the State to the High Court over a €20m claim which had initially been decided in favour of the contractor following a mediation process, which it is believed had ruled in BAM’s favour.

There are currently four such cases between the two parties before the courts, one of which was initiated by the NPHDB regarding a dispute raised by BAM over the validity of the above-ground works involved in the project.

Contentious meeting

The precarious nature of the project came to the fore at a contentious meeting of the Public Accounts Committee on February 9, where it emerged the hospital is unlikely to be completed until 2024 at the earliest.

The hospital was first approved for construction in 2015 and had initially been slated for completion in 2020 at a cost of €650m.

At that February meeting, Mr Gunning had described the number of claims made by BAM as “inordinately” high, in his professional experience. At the time, BAM responded saying it “rejected” any suggestion that it had been “underperforming” on the project.

Also in February, Health Minister Stephen Donnelly was delivered a rebuke by the Minister for Public Expenditure and Reform over the hospital’s delayed progress.

Michael McGrath said the Government had been waiting since July for a “definitive update” on the matter, with clarity at that point being “urgently required”.

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