The board of the national children’s hospital has issued proceedings against the main contractor on the project, BAM Building Ltd, in a row over a building contract.

The increasing bill for the construction of the hospital has been the subject of ongoing controversy amid claims for additional costs being submitted by contractors.

Last December, National Paediatric Hospital Development Board (NPHDB) chairman Fred Barry admitted the final cost of the hospital is not yet known.

The facility is set to cost at least €1.7bn, but politicians have expressed concern the final bill could top €2bn.

It has now emerged a dispute has arisen between BAM and the NPHDB relating to the contract for the latest phase of the project.

BAM has questioned the validity of an instruction by the board to proceed with Phase B of the project. Officials fear that if the construction company’s arguments were to be accepted this would lead to considerable additional costs for the State.

The row hinges on a claim by BAM that the board was required, under a contract signed in August 2017, to provide it with a “complete fully coordinated” design before the instruction would be issued.

The company claims this was not provided as required by the contract and that the design remains incomplete.

The NPHDB disputed the arguments made by BAM but a conciliation process failed lead to a resolution of the matter and the hospital board issued High Court proceedings against the building company on Wednesday.

Contacted for comment today, the NPHDB confirmed it had filed a plenary summons against BAM.

“This follows the issuing of a notification of our intention to bring these proceedings, in the absence of an agreement regarding a contractual issue, at the beginning of March,” the NPHDB said in a statement.

“In the absence of a response from BAM, the NPHDB was left with no other option but to file this plenary summons.”

Costs were agreed with BAM at the outset of the project, but a number of additional payment claims have since been made.

The statement said all contractual issues or claims for additional payments that have arisen over the course of the construction had to date all been subject to “a dispute management process”.

“This process was agreed by the NPHDB and BAM and was set out in the executed construction contract prior to issuing the instruction for the Phase B construction works, the above ground construction works,” the statement said.

“The instruction for the Phase B construction works was issued to BAM by the NPHDB on January 8, 2019 and the Phase B works commenced at that time and have been ongoing since.

“Despite this, the main contractor had made a claim disputing the validity of that instruction. The NPHDB rejects this claim.

“The agreed dispute management process has been exhausted with respect to this specific claim, without agreement from the contractor.

“Given the importance of the works, the cost and the date for completion of this critically needed new children’s hospital, it is essential that this fundamental contractual issue is definitively resolved.

“In order to rigorously defend the public purse, the NPHDB has been left with no option but to bring the matter to the High Court.”

In a statement, BAM said: “As the parties have been unable to agree on this issue, BAM welcomes the fact that the issue will now be subject to a proper and careful analysis, and ultimately resolution, by the Courts. BAM agrees that it is important that these issues be resolved so that all parties can concentrate on the delivery of this vital project to the highest standard in the shortest possible period.”

The initiating of the proceedings came not long after it was announced work on the building site on the St James’ Hospital campus would halt due to the Covid-19 crisis.

BAM closed down the site this week due to coronavirus restrictions after receiving confirmation the hospital was not being deemed an “essential” construction project.

Online Editors