Merrion Square tea room budget hits €7.5 million

Dublin City Council has suspended the planned award of a ten year lease for the Merrion Square tea room. The decision follows a recent government audit report confirming that the project budget has swelled to €7.5 million as of April 2026. Councillors are currently reviewing the financial trajectory before the facility opens to the public.

The cost of the cafe has climbed sharply since the council first sought bids in 2019. At that time, the indicative cost for construction was set at €4.27 million. A subsequent audit found the approved budget had risen to €7.5 million by April of this year. However, officials told the council on Monday that the current budget for completion stands at approximately €6.6 million. This figure includes construction costs and design team fees, which have risen to €693,385.

The project timeline has also slipped considerably. Construction did not begin until 2023 due to pandemic restrictions. It was originally scheduled for completion by the end of 2024. The council stated that this timeline proved unrealistic. An additional eighteen month delay occurred during a formal contractual dispute. Mediation resolved the issue at the start of 2026. The contractor now forecasts completion in March 2027.

The council attributed the financial growth to several factors. These include scope changes, extended program duration, and construction inflation. Officials also cited statutory compliance requirements and delay costs from the contractual dispute. They described the period as one of hyperinflation within the construction sector. The final cost will remain unknown until the facility is fully completed. Negotiations regarding expenditure are still ongoing.

Councillors were expected to approve a ten year lease on Monday night. The proposed annual rent was set at €100,000. The council withdrew the contract from the agenda on Monday afternoon. An external review will now be commissioned to assess the project. A competent consultant will examine the causes of cost overruns and schedule delays. The review will also evaluate project governance and decision making processes.

The consultant is tasked with identifying opportunities where earlier intervention could have mitigated delays. The report will also capture lessons learned for future projects. The council aims to procure the review shortly. A completion date for the external audit is set for February 2027. The findings will inform future organizational project management capabilities.

Independent councillor Mannix Flynn called for a forensic audit of the scheme. He argued that the spending was disproportionate to the local context. “This grandiose scheme for a tea room is going to cost €8 million when people in this city can’t afford a cup of tea,” Flynn said. “There is something seriously wrong here.”

The initial design for the cafe was commissioned in 2015. Architects Bucholz McEvoy received a €246,000 contract for the scheme. A 2014 conservation strategy for the Georgian park had recommended the development of a cafe. The main construction contract was awarded to Bracegrade Ltd. The budget for that phase was later increased to €4.6 million after tender returns exceeded pre tender estimates.