Construction costs of the V&A Dundee to almost double original estimates

The price of the V&A Museum of Design Dundee project has almost doubled the original estimates due to “surprising” constructions costs, it was revealed today.

Dundee City Council said that the project, which has had a £45 million price tag for several years, is now expected to cost over £80m.

It is understood that works associated with the building’s concrete shell, which is being cast in situ on site, are much higher than the council and contractors had previous anticipated.

The cost of cladding the building has been much higher than expected too although the council said it hopes to claw back some savings on this aspect of the project by using other sub-contractors.

Councillor Ken Guild, Dundee City Council leader of the administration and convener of policy and resources, said with unique buildings like the V&A there is always the chance of original costs of pre tenders can increase but that he was confident the museum will come to fruition.

He said: “The V&A is a unique building with unique challenges and we believe it has unique potential. It is a highly bespoke building and not one off the peg. One of the things that drew us to the project in the first place is that it was one that stood out of the crowd.”

Cllr Guild added: “The costs increase is capital therefore it can be spread over a long period and will not impact on other council departments. People in Dundee were worried that the V&A wouldn’t happen at all, well what we are doing today is making sure that it does.”

Work could start in March this year, with the main building completed by the end of 2017 and opened to the public before June 2018. A report outlining a fixed price tender and a proposed funding arrangement details how the construction of the V&A will create hundreds of jobs and inject millions of pounds into the economy.

The museum will be located at the heart of Dundee’s wider £1 billion Waterfront regeneration project, where an estimated 4,800 FTE jobs will be created as a result of the development of the Central Waterfront area.

The council’s policy and resources committee will discuss the economic benefits of the £80.11m project on Monday January 26.

Councillor Guild said: “This is a crucial development in the aspirational project to provide Dundee and Scotland with a world-class museum which will help to provide jobs and wider economic benefits.

“Building the V&A Museum of Design Dundee will help attract further investment into Dundee and we expect to see new hotels, retail housing, office and commercial developments coming to the city. We are already experiencing unprecedented levels of investor interest in Dundee and the city’s ongoing and ambitious regeneration will reach another level when the construction phase begins.

“The council and its partners believe that the time is right to press ahead and deliver for Dundee. We have seen the results of similar projects across Scotland and the world and I want to see those benefits come to our city.

“This major investment in the V&A Museum of Design will have real worth for the future of our city. I am confident that we can deliver this project for a unique building to the new timescales and budget, and we will be able to do this without causing any impact on other important council services.”

Building works for the museum will generate 519 net job years in the construction sector, including opportunities for apprentices. Significant economic benefits include 51 FTE direct jobs and 361 FTE indirect jobs, with this rising to 628 FTE jobs in the initial years after the museum is opened.

An estimated £11.6m economic boost a year would be made by the V&A Museum of Design Dundee, which is expected to generate in excess of 270,000 visitor engagements a year from year three onwards.

The city’s association with the V&A has already had a positive impact in attracting investment like the Malmaison Hotel and also the proposed Sleeperz Hotel in the new rail station project, while new hotel developments will also create an additional 500 rooms

Investor interest in Dundee is at an all time high, with real prospects of new development taking place on the back of the start of museum construction work. Councillors will be told that a report on the first of these developer interests will be brought forward soon.

Following the tendering process with preferred main contractor BAM Construction, the committee is being asked to authorise the finalisation of a funding strategy to enable construction to proceed.

Further private fundraising is anticipated to secure an additional £6.6m while a further £4.5m is being sought from the Heritage Lottery Fund.

Meanwhile, the city council is in detailed discussions with the Scottish Government regarding a request for funding totalling £22.61m through the creation of a Growth Accelerator Model (GAM) Fund for the Dundee Waterfront Project and further capital funding. The remaining £6.5m can be accommodated within the city council’s capital programme for 2015-18 without impacting on council services.

Councillor Guild added:Our city’s profile is already benefiting from our association with the V&A and the breathtaking vision of Kengo Kuma’s building. This can be seen with the award of UNESCO City of Design status which reflects our growing international reputation. A strong partnership exists through Design Dundee Ltd which is dedicated to taking this project to the next stage. There is a shared determination that the V&A Museum of Design Dundee will take shape by the River Tay from this spring.”

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