Wednesday 23 October 2019

Build costs for 10 third-level projects ran €67m over budget - watchdog

NUI Galway
NUI Galway
Katherine Donnelly

Katherine Donnelly

THE final cost of 10 buildings in third-level colleges was €67m over budget, according to a report from the State spending watchdog, the Comptroller and Auditor General (C&AG).

The final combined bill for the projects was  €350m – 24pc higher than estimated – and  they were selected for scrutiny because of the significant time and cost overruns incurred.

Under-estimation of the costs involved at the tender stage was one of the main causes,  accounting for €20m of the overruns.

The findings have prompted the C&AG to warn that “overall, there may be a lack of capacity within the higher education sector to manage large scale capital projects.”

According to report, while most of the colleges involved have learned lessons from their experience, “it is unclear if these learning outcomes are shared across the sector.”

The review looked at the detail of the projects at the pre-contract stage, during the execution of the contract and the post-construction phase.

The most common issue during contract execution was changes to the scope of the projects with. “in some cases, ambiguous and incomplete project documents” contributing to disputes and, in others, a “significant number” of changes sough issued by the institutions or their agents

Nine of the 10 projects ended up in a dispute resolution process and, in one instance, an institute incurred legal and other professional fees of €3.3 million in relation to resolving contractual disputes.

Three of the 10 buildings are in NUI Galway and they include the one among the 10 projects under review that had the most significant cost and time overruns.

A bundle of research buildings at the university, which were substantially complete in 2015, took 45 months longer than expected to finish and overran by €15.7m,  bringing the cost up by 35pc, to €60m.

Meanwhile, the NUIG engineering building finished  €5.4m over budget, with  a total bill to €32.3m, while its sports complex ended up costing €18.8m, some €2.1m above budget.

At University College Dublin (UCD), the final bill for a student learning, leisure and sports facility, was €35.5m, some €9.1m – 34pc - above budget

Trinity College Dublin’s (TCD) Biomedical Sciences Institute cost €91.6m, involving an overrun of €16.7m.

A campus development programme at Dublin City University (DCU), completed in January 2015, was 28 months behind schedule and, at €36.3m, was €4m above budget.

At Athlone Institute of Technology, construction of an engineering building ran 14 months over time and cost €30.3m, €4.6m above budget, while the cost overrun on a sports building was €2.2m, bringing the bill to €9.5m.

The C&AG reviewed two projects at the University of Limerick: its Graduate Entry Medical School Building (GEMS), which cost €21m - €4.5m above budget - and the Irish World Academy of Music and Dance, which cost €14.8m - €2.9 m above budget.

In the case of the NUIG research buildings, the DCU campus development and the GEMS building at UL, C&AG notes that the cost overruns are net of recoupment of performance bonds.

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