Government and contractor trade accusations over spiralling National Children’s Hospital costs

A fresh row has erupted between the Irish Government and the contractor of the National Children’s Hospital over the project’s spiralling cost and drawn-out timeline.

Health Minister Stephen Donnelly sent a letter to the Taoiseach and senior ministers on Friday to outline concerns about a further delay.

It set out the latest updates from the National Paediatric Hospital Development Board (NPHDB) on the “snagging and finish” phase for the hospital’s 5,500 rooms.

It is understood that the letter said the board views construction firm BAM’s approach as “based on extracting as much money from the Irish taxpayer as possible” and that this is partly responsible for the delays.

It also said the government “must be clear and consistent” in its response to this and “any other contractor who might seek to attempt to hold the state to ransom”.

In a statement, BAM rejected the “misleading, ill-informed and incorrect” allegations.

“It in particular rejects the irresponsible claims by the minister that BAM is in any way seeking to ‘extract as much money from the Irish taxpayer as possible’ and ‘is holding the state to ransom’.”

It said the “unhelpful” claims have “absolutely no basis in fact” and described the disagreement as “a highly complex construction dispute”.

In a statement on Sunday, the Department of Health said BAM had attempted to push a previous completion date of February 2025 back further and that according to the development board, BAM had shifted its completion date 14 times since it began work in early 2019.

It claimed that a “key driver” of delays were “extensive” changes to the building after a compliance audit, which required BAM to revisit the vast majority of ceilings in the hospital and remove and reinstall more than 2,200 devices such as smoke detectors and sprinkler heads.

“This level of change comes at an enormous financial and time cost which the minister has failed to recognise or present in his correspondence to the Taoiseach,” it said.

“BAM has complied at all stages with all requirements and provisions set out in the contract and has not been sanctioned by the NPHDB.

“Any application by the board to withhold money will be assessed by the employer’s representative and the standing conciliator.

“The board’s previous attempt to take this action, alluded to by the minister, was overturned by an independent adjudicator and no money was withheld from BAM following this decision.”

The Department of Health said the board and the minister would not accept “an inferior standard of completion on the largest health investment in the history of the state”.

“This Government has been very clear that no further budget increases will be sanctioned,” the department said.

The total spent on the hospital is €2.2 billion after the government approved more than €500 million in additional spending in February.

The amount includes millions for an expected payout to the contractor over ongoing disputes, as well as other contingency funding.