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Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: What is the scale? What is the schedule of payments? Do they get any advance payments for work or is it for-----

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: In arrears.

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: If something happened to a major contractor with which there is direct involvement – there are a number of them – the cost of another contractor tendering and picking up the pieces would result in an additional cost. What kinds of performance bonds or completion bonds – there are different words for bonds – has the board in place?

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: In other words, if something happens the main contractor, the board has €40 million available to cover the costs of the project stopping, retendering and appointing a new contractor. Is that reasonable, from Mr. Costello's experience?

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: I understand that.

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: Mr. Costello can understand the concern, particularly in view of what occurred with schools building projects. Fortunately, there were no advance payments in those cases. Had there been, we would be in a dreadful position. Does Mr. Costello understand there is heightened public concern regarding these issues?

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: Sammon is gone.

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: There is a lot of talk about the preliminary design. Who produced that?

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: Mr. Costello might send us a note on that. The underestimation associated with the preliminary design seems to be a core issue. There is an argument not that costs escalated to the extent they did but that, to begin with, the figures given at an earlier stage were incorrect. The comment has been made at the Committee of Public Accounts over the decades. There is often a tendency for public...

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: It looks a bit like that.

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: When was the main contract signed? Was it early 2017?

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: So they were on site in October 2017. When was the detailed design completed because it was at that stage, you started to see the issues. When was the detailed design?

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: Approximately a year.

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: To get on site a year early to show activity, we left ourselves wide open to having a contractor on site without a detailed design and now we are in the situation that when we do see the detailed design, the options are very limited. The witnesses can understand that scenario. It looks like that.

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: Not the completed. There was no completed-----

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: The total project.

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: Without the detailed design.

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: Did Mr. Costello revisit this? Was it the cheapest tender?

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: I think it was €120 million or €130 million below the others. In the public sector, there is another method of deciding which is the most economically advantageous price. It means if things go up like the PC sums or extra quantities come into play, a contractor might give the lowest price to do the basic work but when the extra items are factored in, it might not be the most...

Public Accounts Committee: National Paediatric Hospital Development Board: Financial Statements 2017 (31 Jan 2019)

Seán Fleming: Was that done?

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