Costs on council housing development likely to rise after collapse of building firm
Shropshire Council say there is a ‘significant likelihood’ that costs will escalate after a contractor tasked with building a social housing scheme in Shrewsbury went into liquidation.
Solihull firm Tricas Construction was employed by council housing provider Shropshire Towns and Rural Housing(STAR) to build 13 houses off Racecourse Crescent in Shrewsbury.
But work on the site ground to a halt in February when Tricas went under owing nearly £7million, leaving the development unfinished.
Now, STAR say they will seek new contractors to finish the homes promptly, amid concerns from neighbours of antisocial behaviour on the dormant site.
“This is something that can happen in the construction industry unfortunately, and especially if you use smaller more local contractors and it’s a risk that STAR has decided to take but they’ll have to keep reviewing this as a strategy if it comes up again,” said Shropshire Council’s assistant director for homes and communities, Jane Trethewey.
“The scheme is not at risk itself, it will be delivered – the funding is there to deliver it, the planning consent is there to deliver it.
“It’s unfortunate that there’s a bit of a gap in the programme whilst that re-procurement happens, so I’d like to provide some reassurance to members and residents.”
She told a meeting of the authority’s Economy and Environment Scrutiny Committee that STAR had attempted to renegotiate their contract with Tricas in an effort to help them stay afloat in order for the scheme to go ahead, but their efforts as a “conscientious client” were not successful.
However it was now likely the firm going under would have financial consequences for the project.
“There’s a significant likelihood that there will be a higher cost associated with completion of the scheme.
“It has been quite substantially built out but there is quite a bit of work to do so it’s quite possible that there is a cost involved with this unfortunately.
“I can’t honestly say if there’s a loss associated with it – it’s quite possible simply because there is a delay and if you're re-procuring then inflation has happened between this procurement and the last procurement.”
