Helensburgh’s waterfront development has gone more than £350,000 over its agreed budget.
A report has stated that a combination of factors, including delays in connecting to the permanent electricity supply, have resulted in an overspend of £367,000 over its approved financial allocation by Argyll and Bute Council.
And it is said to be ‘likely’ that the project will require additional budget support, possibly from additional Covid funding that the council has received.
It is also stated in the report that given the Covid-19 pandemic and other economic impacts, it was always felt that the cost of the project was likely to increase.
The document went before the authority’s policy and resources committee today.
In a section asking what has caused the issue, the report said: “A combination of factors including delays in achieving permanent connection to mains electrical supply, which required the provision of temporary power supplies and heating to maintain [the] overall contract programme.
“Conformance by the contractor with the Scottish Government Covid regulations pertaining to construction sites.
“Impact of a number of external international/global factors e.g. Covid-19, Brexit, Russian invasion of Ukraine, on the availability and cost of essential construction sector materials, resources, plant and equipment.”
It then said: “We are currently awaiting the formal assessment of the contractor’s contractual claim by our appointed cost consultants, which will enable us to undertake and conclude the commercial negotiations with them as to the final contract sum.
“Additionally we are assessing all commercial/legal options to address issues of underperformance on the delivery of services etc, and which have had a detrimental impact upon the project costs e.g. the delay in achieving the permanent connection to the mains electrical supply.”
Addressing the implications of those actions, the report added: “We have previously reported to committees of the council that, whilst the value of the construction contract, at award stage, was £19,971,918.51, given the global health pandemic and other economic impacts which have emerged since the contract award, the anticipated final cost for the contract and therefore the project was likely to increase.
“We are working with the contractor, Heron Bros Ltd, to ensure that any claims for extensions of time, and/or loss and expense, are properly and fully substantiated and assessed in accordance with the requirements of the contract.
“This work stream is ongoing and its outcome will be reported to the relevant committees of the council in due course.
“It is therefore likely that we may require to secure additional budget support, and which could include funds from the Covid specific additional funding that the council has been in receipt of.”
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