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Joint News Statement from Minister for Infrastructure & Minister for Treasury Cambrian Place

Friday, 29 November 2013

Douglas Borough Council submitted two petitions to the Department of Infrastructure on 5 October, 2012, not 18 months ago, as was advised by Councillor Christian. However, it is acknowledged that the preferred developer was in discussions with the Planning & Building Control Division with regard to planning matters at an earlier stage, but this activity was separate to the petitioning process. 

The first petition was for £2.5M to purchase land at Cambrian Place from Rural Views.  The second petition was for £12.072M for the Cambrian Place Development Scheme.

Owing to the nature and value of the two petitions, early engagement with Treasury was essential and the Department and representatives from the Council attended a Treasury meeting on 12 December 2012.

At this meeting Douglas Borough Council was informed by Treasury that there were a number of issues with the proposals, these being:

  • Lack of consultation – early advice would have avoided abortive work;
  • No transparency or competition in procurement process;
  • Construction costs considered too high;
  • Land cost considered too high for area of land to be conveyed; area of land not calculated correctly;
  • Contract arrangements needed amending and contract had not been structured correctly;
  • Due diligence not evidenced for potential developer;
  • Developer was unable to provide a Bond. 

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.

Minister David Cretney said,

'As Councillor Christian will be aware, I am a strong advocate for regeneration in Douglas and across the Island as a whole.  I am Chair of the Douglas Regeneration Partnership and my Department is the primary delivery mechanism for the Chief Minister’s Regeneration Programme.   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.'

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