Dome site is worth just £53m

The land on which the Millennium Dome stands is worth even less than ministers had assumed, says a secret report by leading surveyors - the third major blow to hit the project in the space of a week.

The land on which the Millennium Dome stands is worth even less than ministers had assumed, says a secret report by leading surveyors - the third major blow to hit the project in the space of a week.

The low land value means that demolishing the Dome and redeveloping the Greenwich site could lead to a further £35m hole in the accounts.

Last week it was reported the Dome still owes £19m in unpaid bills, and has committed itself to as many as 2,800 different contracts with suppliers, a situation that prompted Japanese bank Nomura to withdraw its £105m bid for the site.

The new analysis, prepared by experts Healey & Baker for Nomura suggests that the value of the land is far less than the bank had bid.

Healey valued 30 acres of land around the Dome at no more than £53m, and is understood to think that the area on which the Dome actually stands is worth only a similar amount of money.

But the surveyors say it would cost nearly £36m to knock down the Dome and obtain fresh planning permission to redevelop the area - which means that the maximum value of the entire site is just £70m without the futuristic building.

Guy Hands, the Nomura boss in charge of the Dome bid, withdrew last Wednesday after being refused access to the report by accountants PricewaterhouseCoopers (PwC) into the chaotic finances of the controversial New Millennium Experience Company.

This report, commissioned by the NMEC, reveals that many of the contracts signed by the company are due to run beyond January when the Dome was due to close and that builders and architects are still owed £19m by the project.

Two particular problems were at the heart of Nomura's decision to pull out - the revelation that there were actually 2,800 contracts with suppliers, not the 1,100 Nomura had been told existed, and the failure to register the intellectual property of many of the exhibits. This latter problem worried Nomura's lawyers because it could leave the bank open to litigation from angry artists and designers.

Mr Hands believes the Dome cannot now be sold in time to keep it open, even if the PwC report was published tomorrow. This is because it will take at least three months to obtain planning permission from Greenwich Council while the original planning permission runs out on 31 December.

Cabinet office minister Lord Falconer has opened discussions with Legacy, a consortium run by Labour supporter Robert Bourne whose plan to turn the site into a science park was beaten off by Nomura.

The Government could be facing further embarrassment over the project within a few weeks. It is understood that the National Audit Office is close to publishing its detailed report into the debacle, which will include a summary of the PwC report. Meanwhile, the Public Accounts Committee is planning hearings in November and will call Lord Falconer, Peter Mandelson and the two bosses of the Dome, Jennie Page and Pierre-Yves Gerbeau, to give evidence.