Housing / Hjaltland to re-tender Staney Hill housing contract
HJALTLAND Housing Association is having to re-tender for its Staney Hill development in Lerwick after costs for the first phase of housing came back higher than anticipated.
Chief executive Bryan Leask said the association is now looking at the “high cost items on the tender, to see if we can rationalise some of that and bring the cost element down”.
The social housing organisation went out to tender earlier this year on a contract worth £9.8 million excluding VAT for 60 homes in what was a milestone moment for the project.
It would be the first phase of housing in a development that ultimately could host around 300 homes.
Infrastructure work is continuing at the site, which is needed before housing can go in.
Speaking to Shetland News this week, Leask said Hjaltland is hoping to go back out to tender at the end of October or early November.
“We’ve tendered it, we did an estimate what the cost would be, the cost came in higher than the estimate,” he reflected.
“Some of the rules around how we procure things mean we can’t accept it if it goes above a certain level above our estimate.
“We’ve just got to go through a process of re-tendering it, looking again […] at the original tenders and maybe reassess our budget.”
Leask explained that the association used tenders it received for its previous King Harald Street development, which was completed in 2021, and “inflated that cost element” to make an estimate for Staney Hill.
“During that period we’ve had Covid, Brexit, we’ve had a Ukrainian war,” he added.
“That’s obviously turning up the inflation element more than we’d estimated.”
Despite this, Leask said the association is still hoping to be on site for the housing work by the end of the financial year.
He said it was not so much a setback but “part of the process” – and a process that has happened before.
The housing chief added there is an issue in Shetland in relation to availability of contractors and staff.
“It’s been well publicised over the last while,” he said.
“This is probably just the reality of where we’re at now in Shetland in terms of construction workers.”
Shetland Islands Council’s large Knab redevelopment project is also set to come forward in Lerwick in future years, which could include around 140 homes.
Leask reiterated that Hjaltand is in close contact with the council about timescales, and the need to “make sure we’re not competing with contractors”.
In terms of the infrastructure work at Staney Hill, Leask said this is going to plan.
The bulk of rock excavation at the back of Anderson High School hostel is “now pretty much complete”, with a focus now on work such as trenching.
“It’s just a case now of trying to get the houses on site, that’s the next step,” Leask said.
He said he “fully appreciated” that the noise of rock breaking which has emanated around the area for months has been disruptive.
But Leask said it was needed to open up the site, and “in some ways it’s better to get it done all in one go”.
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