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Interserve deal terminated over council cost concerns

York Council has ended its deal with Interserve for the revamp of the city’s historic Guildhall amid concerns over spiralling costs.

The City of York Council revealed Interserve’s contract had now been terminated after both parties were unable to agree on the target cost for the £9m redevelopment.

Confirming the termination, York Council’s director of economy and place Neil Ferris said: “We recognised from the start that, given the site complexity and risks around the foundation structure, there was always the chance that [the] estimate would be higher than anticipated.

“We structured the procurement in this way to protect York residents from potentially spiralling costs.”

Interserve landed the deal to redevelop the council headquarters last August, with SES Engineering Services chosen to support the contractor.

The contract had two stages, with Interserve expected to provide a build specification and target cost for the first phase. If agreed, this was to lead to the full construction contract being let.

A price was not agreed and the council said it was now considering its options before inviting new bids from the market.

The proposed project involves a major overhaul of the Guildhall complex, which includes the medieval Guildhall building and Victorian council chamber.

New offices, a restaurant and a cafe also form part of the existing plans.

The council said it remained committed to the scheme but would now look at ways to reduce the cost of the proposed work.

Mr Ferris said: “Our next steps are to review options to reduce costs, such as revising the scale, scope or access arrangements to the site, and we will invite members to confirm their preferred option in May.”

Construction News has contacted Interserve for comment.

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