Contract clauses could threaten Dome plans
A downturn in the property market would derail government proposals for the redevelopment of the Millennium Dome.
Back in June, joint developers English Partnerships (EP) and Meridian Delta signed a £4 billion deal giving them the green light to regenerate the Greenwich Peninsula.
However, following a recent investigation into the detail of the agreement, the National Audit Office (NAO) has warned of potentially 'fundamental' downside risks that could hamper the site's development.
The NAO is particularly concerned about a 'force majeure clause', which would allow Meridian to defer development if market conditions become 'unfavourable'.
The report states: 'Deferment to avoid a slump in the property market might be useful to English Partnerships in financial terms, but it may not accord with the government's objectives to develop the Greenwich Peninsula without undue delay.' It goes on to explain that 'in circumstances of persistent failure to deliver', EP could seek a new partner.
But this would lead to a drop in income for the taxpayer and, importantly, the report makes it clear that 'despite exhaustive marketing' no other viable partner had ever come forward.
The report also slams the first attempt to sell the site in 2001 - a competition that cost £6.7 million - for being too complex.
The current 20-year plan for the peninsula includes a 26,000capacity indoor arena inside the Dome, a new hotel and more than 10,000 homes.
Work on the high-density development is scheduled to begin later in the year.