Thursday 18 December 2014

Landmark buildings went over budget

Published 22/03/2013 | 00:21

Costs for the MAC, which opened last year and has staged world-class exhibitions and theatre, rose to nearly 18 million pounds
Costs for the MAC, which opened last year and has staged world-class exhibitions and theatre, rose to nearly 18 million pounds

The cost of seven landmark buildings in Northern Ireland - including the showpiece MAC arts centre - soared over budget by £25 million.

Part of the increase was down to rising prices between plans being completed and construction taking place, said the audit office.

Auditors investigated how seven projects performed against time and cost targets - the Ulster Museum, Lyric Theatre, Metropolitan Arts Centre, Public Records Office, Crescent Arts Centre and Tollymore National Outdoor Centre.

Comptroller and auditor general Kieran Donnelly said: "It is disappointing that most of the construction work did not go according to plan, with delays and cost overruns which resulted in all seven projects needing additional funding."

The combined final cost of the seven projects was £103.4 million, £24.8 million (31%) more than the £78.6 million estimated in the original business cases. The rate of increase ranged from 3.2% for the Public Records Office to 91.3% for the Metropolitan Arts Centre (MAC). Costs for the MAC, which opened last year and has staged world-class exhibitions and theatre, rose from £9.2 million to £17.6 million.

Most projects experienced delays when compared to initial forecasts. Changes in the business cases, the rising cost of construction and unclear objectives contributed to inflation across the projects, the audit office said. Six of the seven projects experienced delays ranging from seven months to two and a half years. The business case for the Lyric provided no indication of an estimated completion date.

The firm behind the Lyric in Belfast, Gilbert Ash NI Ltd builders, made a £150,000 donation towards construction costs, which was disclosed immediately by the Lyric. The firm bid for and won the £10.9 million contract in a separate tendering process carried out by a different team from the Lyric's fundraising department.

Despite submitting the most expensive initial estimate, Gilbert Ash was given the job following adjustments as its bid was most "economically advantageous". The audit office report said: "In the case of the Lyric Theatre project, the investment decisionmaker did not identify the potential for conflict of interest and no action was taken to fully consider and record events and decisions regarding the Gilbert Ash NI Ltd patronage in an open and transparent way."

A spokeswoman for Gilbert Ash said: "We had no control over the adjustment to tender costs made during the procurement process - a practice that is standard in our industry to allow for like-for-like comparison of bids."

A spokesman for the MAC said the findings of the report are a matter for DCAL. He maintained the MAC was an excellent example of local stakeholders working together to deliver a major capital project in Northern Ireland. He said: "The MAC has had a dramatic effect on the economic fortunes of its vicinity and has attracted more than 270,000 visitors in less than 12 months, more than 100,000 over target."

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