Alan Kelly, a TD for the Labour Party, has vehemently condemned Stephen Donnelly, the Health Minister, and his chief civil officers for neglecting to tell the official that was set to appear before the Dáil Public Accounts Committee that a conciliator advised an additional €107 million to be paid to the company constructing the new children’s hospital.
Kelly, expressing his views in a statement on Saturday, said that the decision was an outright “undermining” of the Public Accounts Committee. This Committee had had a meeting with key individuals from the body supervising the hospital’s construction on the preceding Thursday, but they did not mention this material.
The refusal to brief the official about the extra €107m before appearing at the PAC is considered as detrimental to public confidence, according to Kelly. He also finds it even more shocking that the Minister and his chief officials were privy to the suggestion of the €107 million payout and decided not to notify the official who was to appear before the Public Accounts Committee.
The Health Department mentioned on Friday that top civil servants received updates about the negotiation process on Wednesday, and the Minister was subsequently briefed. The Department also clarified that while they were aware of the negotiation process, the conciliator’s recommendation was not made known to the official appearing before the committee until post-meeting.
The proposed €107 million is the largest additional payment suggested under the reconciliation/disagreements management clauses in the hospital construction contract. The crucial proposal was made just hours before the significant figures of the National Paediatric Hospital Development Board (NPHDB) and a Health Department official were to go before the Dáil Public Accounts Committee.
Mr Kelly asserted that the failure to relay the mediator’s advice was “transparently premeditated” and criticised the committee attendants for withholding such significant information on Thursday’s meeting. The question of the Minister informing Tánaiste Micheál Martin before entering the Dáil on Thursday where he was answering enquiries about the proposed children’s hospital was also raised by Mr Kelly.
In addition, Mr Kelly expressed his intention to take up the matter with the Public Accounts Committee members. He heavily condemned the management of the project, remarking, “This is utterly intolerable and further erodes public trust regarding the disorganised way this venture has been helmed.”
The information about the €107 million recommendation was not shared with the Dáil Public Accounts Committee during the NPHDB session on Thursday. The NPHDB noted that approximately 1,600 additional payment claims made by BAM related to the project were managed under the dispute resolution process. Yet, the impact on the total contract value, inclusive of conciliations and adjudications, has only been around €27 million – a mere three per cent of the original contract value.
It’s presumed that the board was under the impression that the recent mediator’s suggestion remained undisclosed due to the potential for it being challenged in the High Court as per the dispute procedures.
The Health Department stated on Friday, “The NPHDB has implemented a range of scenario and risk management activities to stringently assess the supplementary budget requirements. As described in the 2019 PwC report, the government approved an augmented capital budget of €1.88 billion in February 2024, which accounts for possible contractor claims among other factors.”
The NPHDB acknowledged that the preliminary suggestion from the standing mediator is still undergoing the conciliation process. Subsequently, it was noted that “Even if the NPHDB accepts the mediation recommendation, it won’t exceed the amended budget. We won’t make any more comments while the contract’s confidential and commercially sensitive process is still continuing. Taking a contract to court in public compromises the state’s capacity to safeguard taxpayer’s interests.”