Edinburgh International Conference Centre extension set to cost city an additional £200k a year

Published on Saturday 30 January 2010 10:39

THE taxpayer is set to face an extra £200,000-a-year bill for the extension of Edinburgh's flagship conference centre.

City council chiefs have confirmed that a potential funding gap for the much-delayed extension of the Edinburgh International Conference Centre means that the council is set to have to put up money itself from next year.

The EICC expansion – which has been being planned for nearly a decade – will see a major underground extension, as well as a new office development above.

Council officials say the annual subsidy – which would continue indefinitely – is necessary because the economic downturn will reduce rental and sale rates achieved when the development's offices are completed.

It is hoped the agreed subsidy will ensure the business case for the development can move forward.

However, some councillors are concerned about agreeing to an indefinite annual subsidy at a time when the council is under pressure to cut budgets.

Councillor Jason Rust, economic development spokesman for the Conservative group on the council, said: "

It is a sizeable amount of money (for the council], especially given the budgetary constraints we are seeing."

The funding for the scheme is to come from a variety of sources, including a 16m package from Scottish Enterprise and funds from the Lothian Road Income Trust.

The funding required is thought to be about 85m but it is dependent on factors including rents and sale values from the completed offices, construction costs and funding or interest rates.

But a funding gap has been identified between office sale proceeds and project costs.

Councillor Ian Murray, finance spokesman for the Labour group on the council, said: "The EICC is fundamental to the economy of the city and supports a tremendous amount of jobs. I would hope that the 200,000 does not need to be drawn upon for the long term. It would be money well spent."

Donald McGougan, director of finance at the city council, said:

"Any additional funding requirement should be considered against the revenue and capital costs of the 'do nothing' option, which is likely to be substantial."

The current timetable would see completion in December 2012.

Councillor Tom Buchanan, the city's economic development leader, said: "It is a project that is good for Edinburgh and the local economy so it is important that we underpin it."