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No comparison between National Children’s Hospital costs and stalled Cork event centre, Tánaiste insists

Absolutely no parallels should be drawn between the National Children’s Hospital costs controversy and the stalled Cork event centre project despite BAM’s involvement in both, the Tánaiste has insisted.

As Taoiseach Leo Varadkar accused contractors of “low-balling” to win state tenders, Simon Coveney defended BAM’s role in the event centre saga which has seen costs soar from €53m to almost €80m, and sanctioned state investment rise from €20m to €30m.

Construction has yet to start more than three years on from when the sod was turned.

Following a competitive tender process, BAM was named in December 2014 as the preferred bidder for €20m of state aid with its design for a €53m 6,000-capacity venue.

The process included a six-month period for entertainment giant, Live Nation, the proposed operator, to engage in detailed design talks with the winning bidder.

But Live Nation said the tendered design wouldn’t be commercially viable and that a larger venue would be needed.

That triggered a lengthy and complex redesign and planning process which has seen costs rise to close to €80m and a request for an additional €10m in state aid, which was sanctioned just before Christmas.

The department of culture’s insistence that €9m be a repayable loan has raised fresh concerns for the viability of the entire project.

Mr Coveney says talks are ongoing to devise a mechanism for delivery of the funding to keep it in line with the original 2014 tender process.

But with BAM’s involvement in the National Children’s Hospital in the spotlight, Mr Coveney said the two projects shouldn't be compared.

“The event centre is an entirely different construct. It involves an awful lot of private sector money - more private sector money than public sector money,” he said.

The National Children’s Hospital is 100% funded by the state.

“What seems to have happened in relation to the National Children’s Hospital was the estimates were wrong at the start. It wasn’t a cost overrun or anything like that, and we’ll have to wait and see when we get the PwC report to understand in detail what went wrong here in terms of getting wrong estimates in place.

“The event centre was a totally different process. There was a competitive tendering process. We’re seeing that process through, but there are multiple interests and partners and also multiple government departments involved.

“We have been very transparent about this process as it has moved on so nobody has had a huge surprise here in terms of extra costs.

“It would be wrong to even talk about the two projects in the same conversation because they are very different with very different structures and I wouldn’t like to see one damage the other.”

BAM was unavailable for comment.