Children’s hospital builder may get millions if ousted

By Fiachra Ó Cionnaith
Irish Examiner Political Correspondent

The taxpayer could be forced to pay substantial penalties to the construction firm at the centre of the children’s hospital costs crisis if it is asked to leave the project.

Fears over the potential bill were raised after BAM said it would be willing to quit the multi-billion euro project, but only if it is asked to do so by the hospital’s board, as fresh demands were made to re-tender the second construction phase.

In a hard-hitting Dáil statement on Tuesday, Taoiseach Leo Varadkar said some firms should be blocked from receiving further State contracts, and accused unidentified firms of “low-balling” with fake figures before driving up prices.

In a subsequent announcement that afternoon, Finance Minister Paschal Donohoe confirmed Cabinet had agreed to beef up tendering rules to take into account past work on State projects and to strictly limit costs.

After three days of silence, BAM said yesterday it wants Mr Varadkar to publicly clarify that he was not referring to the firm. BAM added that it is willing to leave the project, but only if asked to do so by the national paediatric hospital development board — which multiple sources confirmed could mean it is given substantial pay-outs in breach of contract compensation.

“BAM wishes to confirm it did not benefit inappropriately from the tender process,” said its Irish branch chief executive, Theo Cullinane, in a statement.

“BAM will fully engage with PwC [which is due to complete its report on the children’s hospital costs on March 29] to ensure all relevant facts are disclosed.

“In response to the Taoiseach’s comments in the Dáil, BAM has written to the Taoiseach directly to respectfully request him to clarify he was not referring to BAM.

BAM will continue its commitment to the new children’s hospital... BAM wishes to advise the hospital board that if it would prefer to opt out of this contract and procure the work in some other way, then BAM will co-operate with them to facilitate this option.

A Government spokes- person said last night Mr Varadkar “did not reference any specific company in the Dáil”, but confirmed the Coalition “is not satisfied with several aspects” of the children’s hospital project.

The national paediatric hospital development board would only say it is “committed to delivering the new children’s hospital” but the BAM statement has led to a fresh flurry of concern over the hospital’s future.

Sources last night said if BAM is asked to quit by the hospital board, the firm would potentially be due millions in breach of contract penalties, as it has only offered to facilitate a request to quit, rather than saying it will voluntarily leave. While it is understood the Government “hopes and would expect” BAM to waive its right to compensation, a BAM spokesperson yesterday declined to rule out seeking the penalties.

Speaking to the Irish Examiner last night, Labour’s Alan Kelly, Fianna Fáil’s Stephen Donnelly, and Sinn Féin’s Louise O’Reilly called on BAM, the hospital board, and the Government to clarify the BAM exit cost.

Mr Kelly and Ms O’Reilly criticised Mr Varadkar’s Dáil comments as “unwise”, and Mr Kelly said: “The Government is in an awkward position here.

“If they don’t [re-tender] they will be blamed for not changing companies, and if they do, they will be blamed for the compensation and re-tendering costs.

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