Crunch bites in Craigmillar as delays threaten overhaul

THE £200 million regeneration of Craigmillar has run into trouble after delays left it exposed to the global credit crunch.

The firm in charge of the scheme is to revise its business plan after several of the key elements fell behind schedule by up to 18 months.

At the same time, the council today revealed that its Waterfront Edinburgh initiative, designed to revamp 140 acres of Granton's derelict shoreline, is also facing financial difficulties, after the value of its land assets plummeted from 33m to 25m.

Bosses admitted this "poses serious challenges".

The regeneration of Craigmillar is designed to eventually include more than 3000 new homes, with 150 acres of surrounding green space transformed into a "green quarter" with parks, river walkways, woodland and play areas.

The first stage of the project got under way in early 2007 and involved building a multi-million pound campus bringing together St Francis and Niddrie Mill primary schools.

But subsequent delays have emerged for a variety of reasons, including more community consultation, protracted negotiations and management problems. An element of the housing development, the Greendykes South masterplan, the Niddrie Burn restoration project, and the new community high school are all behind schedule.

The school will now open in January 2012, rather than 2011.

City finance leader Gordon Mackenzie, the chairman of PARC – a joint venture between EDI, the council and community representatives behind the regeneration – said today: "The initial plans were very optimistic and there were delays in earlier stages, neither of which we can do much about now.

"Nor can we alter the international economic situation and we have to take account of changes in the housing market. What we can do, and are doing, is revising our business plan."

John Quinn, PARC general manager, said a number of "significant key milestones" have still been achieved.

He added: "Despite falling house sales, the new homes at Craigmillar have exceeded all expectations since first hitting the market."

Colin Hunter, chief executive of Waterfront Edinburgh Ltd (WEL), said today: "The current economic climate poses serious challenges to WEL's development strategy for Granton.

"Unfortunately, WEL's plans have been shaken by the credit crunch. However, by amending our plans and looking at new avenues to secure investment we have made 4 million from land sales."