THE COST of Lerwick’s new Anderson High School and halls of residence has risen by 25 per cent on what had been forecast, it was confirmed on Thursday.
Additional work at the nearby Clickimin Leisure Complex for gym lessons to take place will cost an extra £3 million.
Work on the £55.75m project can now commence after Shetland Islands Council, the Scottish government and the building contractors signed contracts earlier this week.
The SIC will pay one third of the overall cost, with the other two thirds coming from the government through the Scottish Futures Trust.
SIC chief executive Mark Boden described reaching financial close on the largest capital project the local authority has ever undertaken as a “great moment for Shetland”.
The price of the contract has now been fixed and construction firm Morrisons say they are confident about completing the four-storey building at Lower Staney Hill by September 2017.
During a press conference on Thursday afternoon the project team rejected any suggestions that the cost for the project had actually risen by one quarter.
Boden insisted the council had never said the new school could be built for £43 million, adding the figure had been a professional estimate based on Scottish mainland prices.
“There has never been an estimate of this before. This is the first and true figure,” he said.
“What you have seen before is a guide price from Scottish Futures Trust’s Scotland-wide metric, and what we have always said was that the cost of building in Shetland is higher.
“Of course the other thing that has happened in the meantime is inflation.”
The contractor is now on site and will spend the next few weeks carrying out preparatory work such as erecting fences, site accommodation and welfare facilities.
During the height of the construction phase Morrisons expects a workforce of between 250 and 300 on the job.
The company said they would employ as many local subcontractors as possible and would also rely heavily on local supplies, ranging from concrete to catering.
Hub North Scotland, the public/private partnership in charge of the managing the contract, said the price of the school was now set in stone.
Chief executive Angus Macfarlane said: “The purpose of Hub North Scotland is to de-risk it financially for our client and that risk is passed on to Hub North Scotland and subsequently passed down to the supply chain, so the position is that the price that is set today is the price that will be paid out – there are no negotiations and no further payments after that.
“We have not committed to something that we don’t believe we can achieve.”
The three different elements to the project will be treated in very different ways contractually.
The school, with a price tag of £42.01 million, will be paid for over a 25-year period through annual unitary charges that come off the education department’s revenue budget, at the end of which the SIC will own the school.
The unitary charge rule will not be applied for the halls of residence. Here the council will have to pay its third on completion of the project.
Finally, the work undertaken at the Clickimin Leisure Centre is a council project and will be funded fully through its capital programme.
Council leader Gary Robinson added: “It has been quite a long and tough journey but I firmly believe that we now have the right school in the right place, and it will go on to serve the folk of Shetland for many years.”
Three years ago the SIC aborted plans to build a new school at The Knab at the very last minute after Irish construction firm O’Hare and McGovern had already moved on site, a decision that cost the authority £5.5 million.
The original plan had been slated to cost £63 million, while the preliminary estimate for the school at the Staney HIll site was £36 million.
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