Credit crunch spurs Ravenscraig probe

The future of Europe's largest regeneration project is being reviewed in the light of the global economic crisis, it has been confirmed.

Scottish Enterprise is talking to its partners about the next stage of the £1.2 billion scheme for the former Ravenscraig steelworks site in North Lanarkshire.

The masterplan for the brownfield site envisages the creation of a new town with 3,500 homes, 216,000m2 of business and industrial space and 84,000m2 of retail and leisure. But only phase one - comprising 800 homes, a leisure facility and a campus for Motherwell College - is so far under way.

Ravenscraig Ltd, a joint venture between Barratt Developments, Corus and the enterprise agency, has previously expressed concern about a delay in committing £2.8 million of public funding required for site exploration and preliminary work.

Now the Scottish Government has admitted that a review is being carried out. "Scottish Enterprise has invested more than £20 million in the first phase and is continuing to work with its private sector partners and the local authority to develop proposals for phase two," a spokesman said.

He added: "We are currently considering how best to take this development forward in the light of market changes."

Ravenscraig director Jim Fitzsimons warned that any significant hold-up in the development could jeopardise the public-private joint venture. "You cannot turn the taps on and off as and when you want because the private sector will just walk away," he said.

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