€12m tender 'mistake' could stall Cork port scheme
A €12m arithmetic mistake in a bid to relocate container shipping at one of the country's busiest seaports could hold up the €82m project, it has been claimed in Commercial Court proceedings.
Building company BAM Civil Ltd, which won a €46m tendering process for some of the relocation works at Cork port, says it made a "significant mistake" in the computation of its tender.
It has told the Port of Cork Company (PoCC) that, after carrying out a review of its €46.3m tender price, it "discovered there was an arithmetical error" and had "omitted approximately €12m" from the price.
That consisted of 6pc for head office/offsite overheads and 18pc for site preliminaries/overheads "such that our tender is not sufficient to construct the project".
As a result, PoCC has brought proceedings against BAM seeking a number of orders, including that it commence permanent and temporary works referred to in the contract, provide tax-clearance certificates, evidence of insurance and "performance security" for the project.
The contract is part of an €82m plan to move the container shipping activity at the city-centre Tivoli location to Ringaskiddy by 2025.
Around 160 acres at Tivoli is to be redeveloped for residential and mixed use purposes. The relocation project, says PoCC, is part of the Government's March 2013 National Port's Policy Statement and it has already been awarded significant grant funding by the EU.
PoCC has also signed funding agreements, following approval by the Government, with AIB, the European Investment Bank and the Irish Strategic Investment Fund.
John Geoghegan, project director for PoCC's Ringaskiddy redevelopment, says in an affidavit that PoCC sent a letter of acceptance (of the €46.3m tender offer) to BAM on December 20 last. This followed a 13-month tender process.
However, Mr Geoghegan says, in various letters since then, BAM has purported to raise questions as to whether a contract was concluded and more recently sought to deny the existence of the contract.
It asserted it made a mistake and was "entitled to rescission of any such contract by reason of mistake or alternatively rectification".
BAM also stated "no legal relationship or other obligation shall arise" between the parties unless and until the contract had been formally executed in writing.
PoCC says the contract was concluded by reason of the letter of acceptance sent on December 20 last.
Mr Justice Brian McGovern admitted the case to the fast-track commercial list and fixed a date for hearing in July.