Cork City Council spent €3.8m on mediation to extract itself from house contract dispute

Cork City Council spent almost €3.8m on mediation to extricate itself from what it described as “a complex contractual dispute” regarding an unfinished 24-house development, before also paying almost €2.5m to the contractor.

However, the council has insisted the €6.2m payout saved the taxpayer from “a very substantial eight-figure multi-million claim”, estimated to be in the region of €83m.

In March 2020, a private contractor commenced work on 24 houses on Kilmore Rd in Knocknaheeny before work ground to a halt a few months later in a dispute with the council.

The houses were being built under Phase 2C of the Cork City Northwest Quarter Regeneration project, a huge multi-annual, phased regeneration scheme which began in the Knocknaheeny and Hollyhill area more than a decade ago.

The regeneration plan, adopted by the council in November 2011, involves the demolition of 434 houses and the design and construction of 656 new homes.

In 2024, the council resolved its dispute with the Phase 2C contractors, paying them €2,482,245, including Vat, in May 2024, and reissued the tender for the project, costed at an estimated €5m. Works eventually began in summer 2025 under a new contractor.

Mediation and dispute resolution

Figures released under Freedom of Information legislation to Cork North Central Sinn Féin TD Thomas Gould show that, between May 2021 and May 2024, Cork City Council paid €3.78m for — in addition to other items — mediation and dispute resolution.

Queried about those costs, a council spokesperson said they also included “the numerous other costs of developing a site for a regeneration housing development: An enabling works contract; design team fees; demolition and decanting costs; site surveys; site investigations; utility diversions and connections; technical reports, planning costs; and site security”.

The spokesperson said the contractor had claimed “a very substantial eight-figure multi-million claim against the council, relating to alleged additional works, instructions and damages”.

The council successfully resisted that claim, the spokesperson added, achieving “an agreed termination of the contract, regained possession of the site, and resolved the overall claim for less than 3% of the total amount claimed”.

A final payout of €2,482,245 suggests that the contractor’s initial claim was in the region of €83m.

All proceeding well

“The council subsequently appointed a new contractor to complete the project, including some more up-to-date enhancements and energy-saving measures,” the spokesperson said.

“All is proceeding well, and the 24 homes will be handed over and allocated shortly.”

Mr Gould said it was “totally unacceptable” that delays to the Northwest Quarter Regeneration project had cost the taxpayer millions of euro. He said: We are talking about 24 homes. They’ve been under construction for almost seven years.

“They were supposed to be finished in July and that’s now been pushed to the end of autumn. These will end up as some of the most expensive publicly built homes in the State.

“There are serious questions to be answered about contractual disputes that cost public bodies this much money to resolve.

“We are looking at millions spent on 24 homes in a community that doesn’t even have a playground.”