WORKS on the Iona Breakwater project could cost £1.5 million more than budgeted for by Argyll and Bute Council officers, a report has revealed.
The delayed scheme has reportedly not resumed its main work after a winter break due to persistent weather disruption, having been late in starting due to regulatory delays.
The original contract value has now increased by more than £3m to £17.9m, with council officials having budgeted £16.4m.
Additional costs are recommended to be built into the council’s marine asset management plan, which is funded through “prudential borrowing” and an increase in fees and charges.
The details feature in a report which will go before the full council at its meeting on Wednesday, April 29.
Executive director Kirsty Flanagan said: “Due to ongoing weather disruption and earlier regulatory delays linked to seagrass issues, the Iona Breakwater project has experienced significant cost and programme impacts.
“Emergency powers were invoked to address urgent time constraints during contract negotiations. The negotiations had reached a point where it was clear that the best price which could be obtained was considerably and materially in excess of the budget provision, so it was necessary to take steps to ensure that the council could commit sufficient funds to conclude the negotiation.
“Without this intervention, the matter of funding the project would have been deferred to the council meeting in April, by which time the contractor might have withdrawn the current negotiated terms. This posed a significant risk of even greater costs and greater budget overspend.
“Utilising emergency powers was considered the most prudent approach to prevent additional financial escalation on the project and a proper course of action to take. Notably, a substantial portion of the overspend was attributed to delays caused by adverse weather conditions.
“The contractor has offered to assume full past and future weather risk for £1.95m. This would cap the council’s liability, avoid further winter delays, and allow re-sequencing to deliver completion by late summer 2026.
“The original contract value of £14,785,026 has increased to a current worst-case scenario forecast of £17,961,976, representing an increase of £3,176,950 (+20.49 per cent) uplift from contract award.
“The current budget for the project is £16.4m as reported to the harbour board at its meeting in January 2026. The current forecast indicates a overspend of circa £1.5m.”
Ms Flanagan added: “The current estimated completion date of November 2026 places the project back into a high-risk weather window, meaning that without intervention, further delays and cost uplift are likely.
“The additional costs will be built into the marine asset management plan which ultimately is funded via prudential borrowing and a percentage uplift in fees and charges – this increased cost will be considered as part of the 2027/28 fee uplift.”
The report, dated last month, also said: “The main works at Iona Breakwater ceased over the winter break and have not yet restarted on site due to persistent weather disruption.”
