The SIC has approved an additional £2.4m funding for the “iconic” Knab redevelopment masterplan.
Councillors discussed the plans today (Wednesday) with many raising grave concerns about the escalating costs.
The additional funding is mainly for demolition as well as professional and internal services.
Shetland Islands Council’s assets, commissioning and procurement manager Robert Sinclair explained that while the original £1m will be enough to complete the first stage of demolition, that budget was set when there was not a “huge amount of detail to go on”.
He said initial inquiries had been made through industry but it had become clear from further work that additional money would be required.
Mr Sinclair said this had been apparent following consultation with other local authorities, which had carried out similar projects, as well as the council’s experience from tendering other demolition work locally.
Councillor John Fraser had questioned “how did we get it so wrong” with the initial £1m funding estimate for that phase of the project.
Councillor Amanda Hawick said she had concerns about the impact on the council’s financial position, which had already been deemed unsustainable.
However, a vote on an amendment to defer the decision on the project so that it could be considered alongside other investments, was tied.
Council convener Malcolm Bell cast the deciding vote to approve it.
The project is hoped to receive £10m in Islands Deal funding as well as new housing money from the Scottish government.
It is set to include housing, including low carbon design, homes for life , business space and a creative industries hub, as well as student accommodation.
Designs will also be developed on the “public realm”, which includes roads, utilities and other infrastructure required to sustain the new housing.
More to follow.