Exclusive:Crunch meeting for future of Edinburgh concert hall Dunard Centre as spiralling costs create funding gap

Impact Scotland, the charity behind the construction of the Dunard Centre, has held a critical board meeting on Tuesday to consider a tender from contractor Balfour Beatty - more than a year after an initial deal with Robert McAlpine was scrapped.

The meeting comes as the Dunard Centre, which is supported through a partnership of public and private funding, is understood to have embarked on an additional funding round in an attempt to raise extra money as construction costs spiral.

It is understood the rising cost of construction has pushed the projected cost of the project “significantly” above the latest publicly available figure of £114 million.

Politicians have described the latest developments as “deeply concerning”.

A spokesman for the Dunard Centre, which is due to be built on the recently cleared site behind the historic RBS branch building on St Andrew Square, said the progression of a contract with Balfour Beatty had taken longer than planned.

The spokesman said: "We have received a tender from Balfour Beatty, which is currently being reviewed by our board. We hope to conclude this process within the coming weeks, after which we will be able to speak publicly about costs and funding.

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“For now, our focus is on securing the best possible price for this contract, so for obvious reasons we won't share details during these sensitive commercial negotiations."

To date, more than £105m has been raised to fund the project, of which £80m comes from private philanthropy. This philanthropic funding includes support from principal donor, the Dunard Fund, individual philanthropists both from the UK and international, and trusts and foundations.

The public sector funding of £25m has been awarded by the Edinburgh and South East Scotland City Region Deal (ESESCRD). This comprises £5m from the City of Edinburgh Council, and £10m each from the UK and Scottish governments through the Edinburgh and South East Scotland City Region Deal.

In June, the philanthropic foundation Carnegie Corporation of New York made a $1m (£747,000) grant towards the “design and programming” of the centre.

A Scottish Government spokesperson said: “Up to £25m is being made available through the Edinburgh and South East Scotland City Region Deal to help establish an exciting new cultural venue in the heart of Scotland’s capital.

“The Scottish Government is supportive of the project board’s efforts to attract additional funding from a range of sources, including the private sector. Officials are in regular discussion with the organisation and will continue to work with them as the project progresses.”

Construction on the project has not yet started. In March last year, it was “mutually concluded” the main contractor, Sir Robert McAlpine, was no longer the right strategic partner for the main construction phase.

A month later, the board entered into a pre-construction service agreement (PCSA) with a new tier one contractor Balfour Beatty.

The project is not due to be completed until 2029, having previously been hit by several years of delays due to factors including a dispute with the developer of the neighbouring St James Quarter, and rising costs in construction industry.

A UK government spokesperson said there were no unallocated resources remaining in the Region Deal fund and pointed to £9.1 billion allocated to the Scottish Government over the spending review period, which it said could be spent on devolved areas, including arts and culture.

The spokesperson said: "The UK government recognises the significance of the Dunard Centre to Edinburgh’s cultural landscape. That's why we invested £10m in the project as part of our £300m commitment to the Edinburgh and South East Scotland City Region Deal.

“We continue to engage with project partners to facilitate its successful development."

Miles Briggs, Scottish Conservative MSP for Lothian, said: “It is deeply concerning that the progress to deliver the Dunard Centre has come under such significant funding pressures and delays.

“It is now critical that we see how the project’s cost will be managed, with the initial estimate of £45m now escalating to over £114m.”

He added: “The Dunard Centre is an important project to establish Edinburgh’s first new concert hall for a century, but that cannot come at any cost to taxpayers, and we desperately now need to see how the project can get sustainably back on track.

“I will also be raising concerns with SNP minsters to keep elected representatives in the capital updated.”

Scottish Liberal Democrat MSP for Edinburgh West Alex Cole-Hamilton said: “Having visited the Dunard site under construction, I know just how much potential it has to be a new and vibrant home of music in our capital city. I can understand why many will be feeling frustrated by the setbacks in its construction.

“Scottish Liberal Democrats are committed to doing all we can to support our arts and culture venues, many of which have fallen on hard times in recent years.

“I hope that the board will be able to resolve these issues as swiftly as possible so that the project can move forward.”

When it opens, the centre, named after the Dunard Fund, an arts charity created by philanthropist Carol Colburn Grigor, will provide a permanent home for the Scottish Chamber Orchestra and a new venue for the Edinburgh International Festival. The venue will host comedy, poetry, literary and film events, as well as music concerts.

The Dunard Centre will also be the first UK venue designed by Nagata Acoustics, the world’s foremost acoustic experts, and the first concert hall anywhere in the world from the globally renowned David Chipperfield Architects.

Venue chief executive Jo Buckley had previously said the new concert hall would ultimately open all year for both day-time and night events once completed, as she predicted it would have a “transformative” impact on the city.

Ms Buckley said in June last year: “We have a tight site, which will be a challenge, but it’s also the right site, because of where it is in the city centre, with its train and tram connections. When the building is there, people will see that it is a final jigsaw piece in this area.”