Manchester council says inflation and Brexit have pushed budget up to 拢130m

The cost of Laing O鈥橰ourke鈥檚 scheme to build a new arts venue in Manchester has gone up by close to 20%.

In a council report to be presented to its resources and governance scrutiny committee later today, the authority says the cost of the Factory project has risen from 拢111.65m to 拢130.62m.

It said the original budget had been set in 2015 but blamed today鈥檚 17% hike on construction inflation which had been running at approximately 3% a year since then.

It added: 鈥淭here is a degree of uncertainty in the construction market arising out of Brexit, this has caused risks in particular packages where components are bought from Europe (Facades, MEP) and the aim for these particular works packages is buy now and eliminate further uncertainty.

鈥淚n contrast, the speciality stage engineering and theatre packages are being tendered later to avoid sub-contractors adding Brexit related premiums at this stage. The increase in inflation has added 拢5.5m to the construction costs of the project.鈥�

The report confirmed the detailed design was due to complete in the next two months, with the remaining works packages set to be progressively put to market between now and next September.

The latest incarnation of the theatre element of OMA's The Factory

The theatre element of OMA鈥檚 The Factory scheme in Manchester

The report said a review of the project had looked at reducing the size of the building as a way to achieve the previous budget but it concluded that such a move would have 鈥渇urther delayed the opening date鈥� 鈥� originally 2019 and now 2021 鈥� and would have 鈥渇undamentally undermined and devalued the integrity and concept鈥� of the scheme.

The report also confirmed that the management contract with Laing O鈥橰ourke had been executed, marking the end of the pre-construction phase and the commencement of the main works.

The city council鈥檚 executive will discuss the increased project costs next week, and any recommendation to increase the capital budget would go before a full council meeting at the end of the month.

Original proposals from project architect Rem Koolhaas鈥� practice, OMA, included a 2,300 standing-capacity theatre and a separate 5,000-capacity warehouse space for 鈥渋mmersive鈥� events on part of the former Granada TV studios site.

Although the scheme , a revised design for the venue, named in honour of the city鈥檚 legendary Factory Records label 鈥� home to Joy Division/New Order, Happy Mondays and others, was with reduced theatre capacity.

OMA beat a high-profile shortlist including Zaha Hadid and Rafael Vinoly to win the project in 2015.

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