Gordon Deegan
Over 110 redesign variations has been cited as one reason for consultants' fees almost tripling to €24m beyond the original tender estimate on Waterford City’s planned €207m North Quay scheme.
In a statutory local government auditor’s report, Principal Local Government auditor, James Moran has highlighted the overspend on consultants on the delayed and over-budget North Quay scheme.
Mr Moran states that the original Waterford City and County Council tender estimated that the consultants cost would be €6.7m (ex VAT) comprising €3.4m for design and €3.3m for supervision.
Mr Moran stated that when reviewed at audit pay to consultants had increased to €19.6m, due to the design of the flood protection wall under an additional contract.
He said: "Management indicated that the current fee estimate is just over €24m including VAT.”
Mr Moran said that the reasons for the overspend is over 110 redesign variations and the prolonging of the original tender period resulting in the consultant’s work mainly being undertaken at hourly rates.
Mr Moran said that some of the hourly rates for junior technical staff, who consume more attendance hours, exceed those of some of senior professional staff and the application of fee inflation clauses in the contract.
In the response by Council chief executive, Seán McKeown on the consultant overspend, he states that the North Quays “is a highly complex, large-scale development that has been in progress for several years”.
He said: “Over this period, changes in scope and design have inevitably led to an increase in consultant fees. While it is not uncommon for claims to arise in projects of this scale, all claims are being addressed in a rigorous and professional manner by the project team.”
He said: “Considering the escalating costs, the Council is seeking legal advice to ensure that we remain fully compliant with public procurement requirements and to explore any further mitigation measures that may be necessary.”
The North Quay scheme mainly comprises improving access to the city including the construction of a bridge across the river Suir, public realm works, road realignment and signalised junctions, other access bridges, a new public transport hub and water treatment facilities.
Mr Moran states that the overall complete project cost associated with the public works, in March 2024, were estimated at €207.4m, with the Council liable for funding of €22.8m.
He said that the original business case for the development comprised project works of €173.2m and risk and contingency of €34.2m.
In response, Mr McKeown states that “excellent progress has been made on the North Quays infrastructural developments. While the project has experienced some additional costs due to unforeseen factors, the Council has prudently managed the risk and contingency budget”.
Mr Moran also raised concerns over the rent arrears by Council tenants being at a relatively high level.
The report shows that in 2023, 1,379 tenants owed rent arrears of more than €10,000 each to the council and overall rent arrears increased to €5.1m.
Mr Moran states that accounts with arrears of more than €20,000, increased by 50 per cent to 12.
In response, the Council stated that a new Rent Arrears Policy was approved by the Management Team earlier this year.
It stated: “The purpose of which is to ensure early prevention of rent arrears and to protect the Council’s income but to also ensure arrears cases are escalated in a timely manner. A Rent Debt Relief Scheme has also been incorporated into this policy.”
