This Is Guernsey

By Joel de Woolfson

FEARS that taxpayers would have to foot the bill for the £11.5m. overspend on the New Jetty were yesterday downplayed by Public Services.

Chief officer Adrian Lewis confirmed that £8m. of the total £14m. cost had already been paid and the remaining £6m. would come from the Ports Holding Account.

The refurbishment project had been expected to come in at £2.5m. but ended up costing nearly six times as much and  is believed to be the worst States overspend yet.

Contractor Balvac, which had tried to claim £27.3m. for the project, accepted a settlement of £9m. It had already received payment of £4.3m. and will receive a further £4.7m in the coming months. And £3.7m. has already been paid out in legal and consultantcy fees.

Public Services minister Bernard Flouquet told the States that the department would investigate a loan from Treasury and Resources to pay for projects.

There had been concerns that one would be needed to pay for the jetty overspend but, as the Ports Holding Account had £9.9m. in it at the beginning of the year, Mr Lewis said it would be able to cover the outstanding balance.

‘With £9.9m. in the account at 1 January, it would seem unlikely that the remaining payments on the jetty in isolation would necessitate a loan,’ he said. ‘However, there are other major ports-related capital projects planned which will require funding, hence the need for discussions with Treasury and Resources to which the minister of PSD referred.’

The department still has to find the money to renovate the airport runaway.

The settlement between PSD and Balvac was approved by the department’s board on 10 July and it will now bring a full report on the project to the States, probably early next year.

‘A comprehensive review of this project is being carried out by both the department and the Public Accounts Committee, which will consider in depth all the various issues, financial and otherwise,’ Mr Lewis added.

‘Until this is complete, it would be inappropriate to comment further.’

Article posted on 1st August, 2008 - 2.29pm