Contractor BAM suing national children’s hospital board in €20m costs dispute
Main contractor on hospital project lodges High Court proceedings
Jack Horgan-Jones
The site of the new national children’s hospital in Dublin. File photograph: Dara Mac Dónaill
The site of the new national children’s hospital in Dublin. File photograph: Dara Mac Dónaill
The main contractor on the new national children’s hospital project, BAM, is suing the hospital’s development board in a dispute over a €20 million costs claim.
Proceedings were lodged in the High Court on Wednesday by BAM Building Limited, against the National Paediatric Hospital Development Board (NPHDB).
It is understood the High Court proceedings followed the exhaustion of a mediation process mandated under the development contract – last year saw a similar case lodged, albeit by the development board against BAM.
That case related to the legality of an instruction to move to phase B of the project – however, the new proceedings relate to a dispute over costs.
Both BAM and the NPHDB had no comment on the case when contacted. However, it is understood the claim is for extra costs, which the contractor claims is due to delays caused by incomplete design and incomplete design information.
The NPHDB has previously rejected the claim of incomplete design, made by BAM. In a statement released earlier this year, it argued that there has been “no material change” in the design of the new children’s hospital since the GMP was agreed with the contractor in December 2018.
The company is seeking approximately €20 million in payment arising from the dispute, which industry sources estimated would cover about 45 per cent of the actual claim. It is understood the claimed delay period covers about 41 days during a two-year period across 2019 and 2020.
The issue is understood to have been referred to the conciliator under the contract’s dispute resolution mechanism. Industry sources say the conciliator adjudicated in favour of BAM, but this was rejected by the NPHDB – BAM is now seeking the payment through High Court proceedings.
A spokeswoman for the NPHDB said: “As this matter is now subject to High Court proceedings and, so not to prejudice those proceedings, the NPHDB will not be providing any comment.”
Additional costs
Only a handful of the hundreds of claims for additional costs at the project have been resolved, and it is thought the claim at the centre of the High Court action may be the first of several significant claims to come through the conciliation process.
The Public Accounts Committee (PAC) was updated on the project earlier this year, and was told by the NPHDB that contractor claims for additional costs have hit about €300 million. That covers about 700 claims. The final sum to be spent on the hospital is expected to be about €1.7 billion, with construction costs set to compose €1.4 billion of that.
The hospital was supposed to be completed by August 2022, but that has been pushed back to October 2022 due to the shutdown of the construction industry during the Covid-19 lockdown. However, the PAC heard earlier this year that the delays could be more significant than that.
David Gunning, the chief executive of the NPHDB, told the PAC that it is currently withholding 15 per cent of payments due to its stance that a compliant programme of works illustrating BAM’s approach to delivering the new hospital is supplied.
PAC also heard allegations that the main contractor was not advancing the construction due to “under resourcing”, and that BAM is “underperforming”.
BAM has previously said it rejects any accusation that it does not resource the project correctly or is underperforming.
Last year, the NPHDB told the Oireachtas Health Committee that it considered terminating its contract with BAM at the height of a bitter dispute over the company’s refusal to resume work on the site after Covid-19 restrictions were eased last summer.