A review is to be held into the controversial River Ness Flood Alleviation Scheme after it was completed late and over budget.
The scheme came in almost £1.4million over the original £34million budget, with greater than expected claims from businesses affected by the long-running works the largest factor.
And the figure is expected to rise to more than £3.1million over budget after it emerged that Highland Council has been in dispute with contractor Morgan Sindall over the cost of the project.
The building giant, which was responsible for the first phase between Ness Bridge and Friars Bridge, has been locked in legal talks with the local authority over the past few months because of the claim.
An adjudicator decided last month that Morgan Sindall was entitled to an additional £1,758,068.15p – which will be added to the overspend subject to either side seeking arbitration.
One of the main elements of their claim was the discovery of several massive boulders in the river bed.
The main element of the overspend was compensations to landowners and businesses which ultimately came to £1.3million more than was originally estimated.
Several claims came late in the process after delays with the project meant that the riverside streets did not open until May last year – around six months later than originally planned.
Legal costs and the adjudication process with the contractor also contributed to the overspend.
Business owners were left frustrated by the process – and Inverness Central councillor Richard Laird urged the council to learn from the project.
He said: “The River Ness Flood Alleviation Scheme has made a real difference to the riverside and achieved its fundamental aim of reducing the flood risk for neighbouring homes and businesses.
“However we must know why these claims against the council could have been avoided”.
Papers which will be considered by councillors next week say that the other projects in the council’s capital plan may have to be deferred or reduced because of the costs.
A Highland Council spokeswoman said: “The River Ness Flood Alleviation Scheme was a complex civil engineering project which has transformed the riverside, protected over 200 businesses and 800 homes, and won national recognition for its high quality.
“It is disappointing that there has been a dispute over the contract value and the council, as always, sought to protect its position.
“In line with project development guidance, we will undertake a review to see if there are lessons which can be learned.”
Morgan Sindall have been contacted for comment.