Sunday 8 December 2019

Construction sector fragile, warns hospital builder BAM

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John Mulligan

John Mulligan

IRELAND'S construction sector remains in a "fragile state", with "little progress" made on delivering key infrastructure projects, the boss of the company building the €1.7bn National Children's Hospital has warned.

BAM Ireland chief executive Theo Cullinane also criticised what he described as "adversarial public contracts".

"Little progress has been made on delivering much-needed infrastructural projects," he said in a statement to investors as part of BAM's 2018 results. "Margins remain far too low and make reinvestment difficult. We have all seen the problems caused by the reliance on adversarial public contracts and processes ... which is something BAM has been flagging for many years."

He added: "This has the real potential to cast doubt over the Government's ability to deliver the Project Ireland 2040 plans, especially if large international firms are not willing to partner on their delivery."

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BAM Ireland is part of the Netherlands-based BAM Group.

Mr Cullinane said he "strongly" recommended the adoption of early contractor involvement in major public projects.

"Government must take its share of risk on major projects," he said.

"This will achieve better oversight, better certainty on costs and better outcomes for taxpayers' money."

BAM Ireland is the main contractor on the National Children's Hospital, which is being built in Dublin beside St James's Hospital. The projected construction cost of the new hospital has spiralled from €1bn to €1.7bn.

In February, BAM Ireland offered to pull out of the contract if the hospital board wanted to opt out of the agreement.

BAM Ireland stressed at the time that it "did not benefit inappropriately from the tender process".

In its results yesterday, BAM Ireland said it had enjoyed a strong 2018, despite its pre-tax profits falling 11pc to €13.7m. Its turnover was 13pc higher, at €523.6m.

Irish Independent

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