Birmingham city council has run out of money for phase two of its ambitious Paradise development.
The scheme has been hit by construction inflation as double market forecast and the collapse of Carillion on a key project in phase one.
Minutes from the council audit committee have now revealed that funding for both phase one and two was swallowed up in key enabling works in the first phase.
The whole project is now in limbo as the city council tries to raise an extra £50m to deliver essential works for phase two.
Greater Birmingham and Solihull Local Enterprise Partnership was earmarked to invest a total of £88m in the project.
Of this £38m was budgeted for phase one and £28m for Phase 2. A further £22m will be relead for Phase 3.
But audit council minutes reveal that phase one design development, inflation, programming, highways infrastructure, demolition and remediation costs required substantially more infrastructure investment than the original LEP contribution of £38m planned and sucked up most of the phase two allocation
Now the private/public joint venture with the council, PCLP, is asking for the extra cash for deliver phase two.
This will see around 500,000 sq ft of space delivered in the One Centenary Way, Three Chamberlain Square office projects and new 4-star hotel buildings as well as Ratcliff Square.
The funding will support £2.3m of a Carillon liquidation claim, £17m CPO costs and £30m of infrastructure works.
A full business case report settingout the case for extra funding will be considered by the LEP and Council Cabinet in the New Year.
The £500m Paradise Square scheme is expected to deliver 2m sq ft of new development.
This comprises up to 10 new Grade A office buildings and the 4 star hotel with up to 250 bedrooms.
from Construction Enquirer http://www.constructionenquirer.com/2018/11/22/birminghams-paradise-scheme-runs-out-of-cash/
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