Council seeking legal advice on 'escalating' North Quays consultancy costs
An audit of the Council has reported that the current consultancy fee estimate is just over €24 million.
Waterford City and County Council are seeking legal advice on the 'escalating costs' of consultancy fees regarding the North Quays project.
The current estimate of the consultancy fees stands at just over €24 million (including VAT), despite the original tender having been for €6.7 million (excluding VAT) comprising €3.4 million for design and €3.3 million for supervision. The soaring costs have been partially blamed on more than 110 redesign variations of the project.
According to an audit of Waterford City and County Council's annual financial report, the cumulative payment to the consultants at the end of 2024 amounted to €13.4 million. That figure, however, is due to rise considerably.
In May 2024, the figure had risen to €18 million ex VAT and, upon audit, the figure had risen to €19.6 million, due to the design of the flood protection wall under an additional contract, the auditor noted.
The statutory local government auditor’s report by the Department of Housing, Local Government and Heritage, Principal Local Government auditor, James Moran explained that the rise in costs was due to more than 110 redesign variations of the project and the "prolongation of the original tender period resulting in the consultant’s work mainly being undertaken at hourly rates".
It was also noted by Mr Moran that "some of the hourly rates for junior technical staff, who consume more attendance hours, exceed those of some of [the] senior professional staff."
Inflation clauses in the contract have also been noted as causes for the fee rises.
The Auditor further noted that there are "several claims that have not been agreed and may have to be addressed in the contract dispute resolution process" and that there is a "low risk" that supervision costs for the construction of the flood protection wall "may increase if these works are not run concurrent [sic] with the main contract".
In his response to the audit, Waterford City and County Council Chief Executive Sean McKeown revealed that, in light of the "escalating costs", the Council is "seeking legal advice" to ensure full compliance with public sector procurement regulations and "to explore any further mitigation measures that may be necessary".
Mr McKeown said: "The North Quays is a highly complex, large-scale development that has been in progress for several years. Over this period, changes in scope and design have inevitably led to an increase in consultant fees."
He said that while it is "not uncommon for claims to arise in projects of this scale" the Council are ensuring that "all claims are being addressed in a rigorous and professional manner by the project team".
