Douglas Council’s proposals to transform Cambrian Place into a multi-storey car park and library ‘were lacking in a number of areas’.
That’s according to Treasury and Infrastructure chiefs, who issued a joint statement explaining their decision not to approve the borrowing to fund purchasing the land and going ahead with the scheme.
Douglas Council leader David Christian announced last week it could not fund the project and the land owner, Rural Views Limited, had now pulled out.
Developer Time and Tide was given approval in principle for the scheme by the Council of Ministers in January, and submitted a reserved matters application in July.
Infrastructure Minister David Cretney said: ‘I have been disappointed that, despite a significant amount of work from all parties, the scheme has not been able to be progressed.
‘However, as the department with responsibility for approving local authority borrowing, we are responsible for ensuring that value for money is clearly demonstrated.
‘With regard to Cambrian Place, this has not been the case and it is the responsibility of the Department of Infrastructure and Treasury to safeguard the interests of the ratepayer/taxpayer in the longer term.
‘We are obviously disappointed that the development opportunity has been frustrated but clear accountability, transparency and competition for any substantial investment of this kind must be paramount.’
In the statement, it says Douglas Council was told by Treasury at a meeting in December 2012 that there were ‘a number of issues with the proposals’.
They included lack of consultation, no transparency or competition in the procurement process, and the high costs of construction and the land.
In addition, they said the contract arrangements needed amending, and the developer was unable to provide a bond.
The statement continues: ‘Both Treasury and the department have been in extended correspondence with the Council to address these issues over the past 10 months.
‘However, they have not been successfully addressed or resolved and therefore the department has been unable to approve the petitions and Treasury has been unable to provide concurrence for the borrowing from the Local Authority Borrowing Scheme.
‘The department has sought the advice of independent valuers/surveyors who confirmed that the proposals were lacking in a number of areas and did not meet the value for money criterion which open, transparent and competitive tender arrangements would provide.’
Douglas Council submitted two petitions to the DoI in October, one for £2.5m to purchase the land, and the second for £12.072m for the Cambrian Place Development Scheme.
