Body behind €2.2bn National Children’s Hospital paid building contractor €107m

The National Children's Hospital. Picture: NCH

The administrative body behind the €2.2bn National Children’s Hospital was forced to pay the main contractor for the build €107m after they had a claim awarded in their favour in court.

In auditing the accounts of the National Paediatric Health Development Board (NPHDB), the comptroller and auditor general noted that the board had paid the €107m to BAM in July 2024 after the contractor initiated court proceedings regarding the claim and provided a bond guaranteeing the security of the money until those proceedings conclude.

In his notes appending the NPHDB’s newly-published financial statements for 2023, Seamus McCarthy said that the money was not included in the value of capital commitments contracted for by the NPHDB as of December 31, 2023, but added that this fact did not have a material impact upon his audit opinion.

BAM and the NPHDB have had an acrimonious relationship for the duration of the almost 10-year-long build of the children’s hospital, one of the most expensive buildings of its kind ever constructed.

Much of that acrimony has resulted from hundreds of claims submitted by BAM for perceived ongoing alterations to the design of the hospital, claims which the NPHDB has disputed.

Comptroller and auditor general Seamus McCarthy. File picture Mark Stedman

The payment of €107.6m was arrived at via the recommendation of a conciliator in recompense to BAM “in respect of critical delay events” on the hospital project between December 2019 and February 2024, Mr McCarthy said.

The NPHDB subsequently disputed that award, as per protocol, by issuing a ‘notice of dissatisfaction’. 

However, when BAM initiated court proceedings and provided the necessary bond, the NPHDB was compelled to make the payment in full.

A spokesperson for the NPHDB said that the issues in question “are in dispute and the outcome will be determined by the courts”.

They noted that the bond guarantees the payment, and that should the courts find that BAM is not entitled to part or all of the money it will have to be repaid with interest. 

They also insisted that the payment will not increase the allocated cost of the hospital.

“The NPHDB will defend the matter before the courts to minimise exposure to this and any other claims that it considers to be without merit and/or to be inflated,” they said.

The mammoth children’s hospital project is now expected to be finally completed and ready for business in June 2026, several years past its originally projected completion date.

The build has been heavily criticised in recent years for those repeatedly missed completion dates together with the spiralling nature of its budget, which was initially set at just €800m in by the then Government in 2014.

Separately, the comptroller and auditor general said that elements of the retirement benefits available to NPHDB employees had not complied with financial standards as reported, as the full cost of those benefits was only accounted for as they became payable, as opposed to that cost being reported as the benefits accumulated.

The NPHDB spokesperson said however that in only declaring those liabilities when payable the board was following the "specific policy decisions of the Minister for Health", adding that that fact had been acknowledged in the audit report.