Guernsey pauses £460m of planned capital projects

The government of Guernsey has paused all of its planned capital projects – which are worth a total of £460m.

The move follows a failure to agree on tax plans last month to tackle a budget deficit.

The States of Guernsey’s policy and resources committee has written to deputies to say that “no new funding should be considered and approved until the States have been able to consider and agree on the size and shape of the capital portfolio”.

The committee has asked officials to carry out a review into all planned projects. “Work on the review has already commenced with the intention of the States being able to consider a policy letter at their special meeting in July 2023,” wrote the committee’s president Peter Ferbrache, according to the Guernsey Press. “All schemes in the current capital portfolio will be examined to determine whether they could be paused, delayed, stopped or re-scoped based on strategic fit, affordability, deliverability and impact on related schemes.”

Projects with an existing contract underway are unaffected by the announcement. These include the modernisation of Princess Elizabeth Hospital, expected to take seven years and cost more than £100m. Guernsey firm Rihoy & Son was appointed as principal contractor for the first phase, beginning work last year.

In addition, Currie & Brown was engaged by the States to project manage phase one, which is expected to cost approximately £32m in total.

The second phase is due to start in 2024. The States announced it had selected preferred designs for these in December.

In December, the States also approved a £24m redevelopment of Alderney Airport, including lengthening the runway and constructing a new terminal building.

Another project is the construction of a campus for post-16 students at Lez Ozouets – part of a £100m initiative to reorganise secondary and post-16 education.

Guernsey-based firm RG Falla was chosen for the contract to build the campus in May last year. But in December the States said it had decided to withdraw from the relationship and was reviewing alternative options with other firms.

The States of Guernsey’s policy and resources committee said: “This is intended to be a quick review which will allow the community, the States and the industry to then have certainty over the capital portfolio for the remainder of this term, which is important given construction in Guernsey is enjoying one of its busiest periods at the current time.

“No projects where a contract has been agreed are affected and these are proceeding as planned, including phase one of the hospital modernisation project.  Where there is a case for new urgent funding for capital projects, these are also still being considered as normal.”