Councillors have scaled back plans for the redevelopment of an historic market hall where costs spiralled out of control.

Denbighshire’s cabinet approved the new procurement strategy for Queen’s Building’s in Rhyl on Tuesday, as it looks to pay for just the first part of phase one of the development.

This would see construction of an indoor market hall and flexible event space, with external landscaping.

Other phases would see apartments, shops, food courts and a library incorporated into the “flagship” development.

However today cabinet members voted to start the procurement process on just the construction element of phase one, with work starting in October if all goes to plan.

A report into the procurement strategy said: “At this stage we are only looking to deliver phase 1, with additional phases subject to review in light of the Covid impact on public finances and associated grant funding and the impact of the pandemic on the economy and property market.”

Phase one of the scheme was supposed to cost around £7.4m, which inflated to an estimated £11.7m by September last year.

Then a damning internal audit report released in January questioned “contract procedure rules” and said the figure was more like £15m – double the original estimate.

Speaking at the meeting lead member for finance Julian Thompson Hill said: “The overall cost of delivering phase one is just under £11m.

“However the contract that we’re looking to procure at this stage is for the construction phase only, currently estimated to be around £4m.

“We are proposing we use lot three of the North Wales Construction Partnership – a scheme we administer on behalf of North Wales.

“We’re only asking to commence procurement using that methodology and we’ll come back after the procurement period has finished and all bids have been looked at.

“Then we’ll come back for a final determination and acceptance of an approved contractor at a later date.”

Ion Properties were the preferred development partner at the start of the scheme.

Six companies will be invited to bid for the initial work under the construction partnership framework.

They are:

RLD Construction; Wynne Construction; Read Construction; K&C Construction; Seddon Construction;WRW.

The report continued: “The cost of delivering phase 1 is estimated at £10,922,261.

“The costs have been subject to extensive examination and we are confident  the project can be delivered within this funding envelope.”

The whole was projected to cost around £30m when it was initially floated but this figure was put into doubt when first phase costs reached half that.

Now each element of the plan will come before council to be justified.

Of the initial £10.9m phase one costs Denbighshire council will stump up a little under £4.5m, with rest coming from Welsh Government handouts.

That figure also includes preparation of the wider site for the rest of the scheme.

The design and access statement (DAS) shows the finished development will comprise of:

80 residential units (including 32 one bed and 48 two bed apartments)

Food hall containing 16 permanent market stalls with flexible space for additional stalls

Multi use event space

1804 m2 of food and beverage/retail space

5794 m2 of public library/offices

4850 m2 of external public space

Queen’s Buildings are also to be refurbished as part of the plans.

Demolition has been commenced at the site in preparation for work to start in October.