Secrecy and distrust behind collapse of visionary hotel project - John McLellan

An artist's impression of the new Haymarket development.  The hotel and hotel school are on the left, above and behind the retail units.An artist's impression of the new Haymarket development.  The hotel and hotel school are on the left, above and behind the retail units.
An artist's impression of the new Haymarket development. The hotel and hotel school are on the left, above and behind the retail units.
Commuters at Haymarket station can’t help but notice the lack of activity at the site of what is supposed to become the Edinburgh International Conference Centre (EICC) hotel school.

A visionary project to give the EICC a vital edge in a ferociously competitive global market by guaranteeing its customers block booking of rooms at a discount well in advance of their events, it would also provide first class hospitality and catering training on the job in conjunction with Napier University. And turn over £35 million a year.

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Too good to be true? Well, those other renowned visionaries at Edinburgh City Council seem to think so because the Evening News’s venerable Ian Swanson has revealed the authority is about to kibosh the whole thing because, apparently, of a dispute over snagging and a “latent defects insurance” (LDI) policy covering any post-completion problems.

It tracks back to the withdrawal of construction firm McAlpine earlier this year, and who accepts the risk for the foundation work already completed. The risk now are the stumps of reinforced concrete become a monument to a lack of imagination and determination.

Developer M&G’s insistence that the policy excess of £250,000 per claim was the council’s responsibility was seemingly too much for officials, so now all sides are ripping up their contracts and probably heading to court. The hotel operator Hyatt could sue the EICC, and, incredibly, the council could be sued by the EICC, its own arms-length company.

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Such is the level of secrecy and distrust it’s difficult to say conclusively where fault lies. But with a track record of falling out with developers it doesn’t like and, from what I observed during my time at the council, a suspicious attitude from senior council officers towards the EICC and its chief executive Marshall Dallas, my money is on the council grabbing a chance to torpedo a project it never liked.

Chief executive Paul Lawrence is alleged to have refused to speak to the EICC board, no doubt explained away by some arcane excuse about contractual obligations and commercial confidentiality, but it smacks of an unwillingness to seek a way forward to preserve the innovative concept and remove the chance of expensive litigation.

Then there is what has been privately described as an “appalling drip-feed of information” designed, it appears, to keep councillors in the dark as long as possible until push came to shove.

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But it’s beyond doubt the council excluded the EICC from a crucial discussion about the project’s future. The secret meeting of the finance committee on August 7 to discuss the problem was apparently given a slanted presentation by officers designed to scare councillors about risk, but Mr Dallas was not there to present an alternative view. How very different to the process which led to the scheme’s approval, when Mr Dallas was on hand to answer questions and allay fears.

Mr Dallas knows the hotel business inside out, has run successful businesses and turned the EICC from a cash drain into a money spinner, but the senior officers, well, haven’t. No wonder they wouldn’t want him anywhere near councillors.

However, I doubt they’ll have to worry about that for too much longer because I suspect Mr Dallas’s highly profitable association with the EICC will come to an end before too much longer. And if so, the council administration will only have themselves to blame.

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