The Merrion Square tea room lease has been suspended after concerns about the rising cost and prolonged delay of the Dublin City Council project. The proposed 10-year operating agreement was removed from the council agenda on Monday as officials prepare an independent review of the development.
What happened in Dublin?
Dublin City Council had been expected to approve a lease for the operator of the planned Merrion Square Park tea room. The agreement proposed an annual rent of €100,000 over 10 years, but councillors were told the item had been withdrawn before the meeting.
The decision follows growing concern over the project’s construction budget. Current estimates place the total cost between €6.6 million and €7.5 million, compared with an indicative construction cost of €4.27 million when the council first sought bids in 2019.
The final figure remains uncertain because negotiations over expenditure are continuing and the facility has not yet been completed.
- Proposed lease: 10 years
- Proposed annual rent: €100,000
- Current estimated project cost: €6.6 million to €7.5 million
- Forecast completion: March 2027
- Independent review expected to be completed by February 2027
Merrion Square tea room costs have increased sharply
The scheme was recommended in a 2014 conservation strategy for the Georgian city-centre park. Dublin City Council appointed architects Bucholz McEvoy in 2015 under a design contract worth €246,000.
Construction tenders were issued in 2019, but the bids exceeded the council’s preliminary estimates. The main contract was later awarded to Bracegrade Ltd, and the approved budget increased to €4.6 million.
A Government audit report found that the approved budget had reached €7.5 million by April 2026. Councillors were subsequently told that the current completion budget was in the region of €6.6 million, including construction work and design team fees of €693,385.
The council attributed the increase to several factors rather than a single cost item, including changes to the project’s scope, inflation, additional professional fees, statutory requirements, delays and costs linked to contractual difficulties.
Why has construction been delayed?
Work did not begin until 2023. Dublin City Council cited Covid-19 restrictions as one reason for the delay, with completion originally expected by the end of 2024.
That timetable later became unachievable. The project then experienced an 18-month delay connected to a formal contractual dispute involving the contractor and design team. The dispute was resolved at the beginning of 2026 following mediation.
The contractor’s current programme forecasts completion of the Merrion Square Park tea room in March 2027. The council said meetings are being arranged with the consultant design team and contractor to establish a clear timetable for the remaining work.
Independent review to examine cost overruns
Dublin City Council will commission an external review of the project. The review will be carried out by a suitably qualified consultant and is expected to be completed by February 2027.
Its remit will include examining:
- The extent and causes of cost increases
- The reasons for schedule delays
- Project governance, reporting and decision-making
- Whether external risks were foreseeable and properly managed
- Whether earlier intervention could have reduced delays or additional costs
- Lessons for future public construction projects
The council also wants recommendations on project delivery, organisational oversight and the management of large capital schemes.
Political reaction in Dublin
Independent councillor Mannix Flynn called for a forensic audit of the development. He criticised the scale of spending on the facility at a time when many people are struggling with everyday costs.
The proposed lease cannot proceed as planned while the council reviews the project and reassesses the circumstances behind the rising budget. Any future decision on the operating contract is likely to depend on the project’s completion timetable, final cost and the findings of the external review.
What happens next?
The immediate next step is the procurement of the independent review. At the same time, the council, contractor and design team will continue discussions about the construction schedule.
Key developments to watch include:
- Appointment of the consultant conducting the review
- Confirmation of the remaining construction programme
- Clarification of the final project cost
- Publication of the review’s findings in February 2027
- A future decision on the tea room’s 10-year lease
Why does the suspension matter?
The suspension highlights the financial and governance challenges facing major public construction projects in Ireland. Rising material and labour costs can affect budgets, but delays, contract disputes, design changes and extended professional services can add further pressure.
For Dublin residents, the review should provide a clearer explanation of how the project moved from an initial indicative cost of €4.27 million to a projected figure potentially reaching €7.5 million. It may also identify changes that could improve oversight of future Dublin City Council developments.
Frequently asked questions
What is the Merrion Square tea room?
It is a planned café facility in Merrion Square Park, developed following a conservation strategy for the Georgian city-centre park.
How much will the project cost?
The current estimates range from €6.6 million to €7.5 million. The final cost will not be known until construction is complete.
When is the tea room expected to open?
Construction is currently forecast to finish in March 2027. An opening date has not been confirmed.
Has the lease been cancelled?
No. The proposed 10-year lease was suspended after the item was withdrawn from the council agenda. A later decision is expected after further review.
Conclusion
The Merrion Square tea room lease has been put on hold while Dublin City Council addresses a project cost that has risen substantially and a completion date that has moved several times. The independent review will be central to establishing what caused the overruns, whether they could have been limited and how similar public projects should be managed in future. For now, the tea room remains unfinished, with completion forecast for March 2027 and the operating contract still unresolved.