THE expansion of the Edinburgh International Conference Centre is set to finally get under way after a new £80 million funding package was unveiled.

The deal, which would see Scottish Enterprise invest around £18m in the 13-year-old complex, will go before councillors next week. If they give the green light, building work would start next year and an expanded EICC – capable of attracting some 95,000 delegates a year – would be completed by 2012.

The project includes an underground 1600-seater auditorium, a new atrium, retail space and a landscaped public area.

As part of the deal, Scottish Enterprise will buy the nearby Conference House – which provides office space for EICC staff – for around £10.5m.

An expanded centre would generate an estimated £89.8m per year for the local economy, up from around £45m. The main auditorium currently holds 1200, and the expansion is seen as key to Edinburgh's ability to compete with other cities to host major conferences and events. A previous extension plan fell through last year – after more than five years in the planning stages – when developers Cala-AWG walked away from the project.

City council leader Jenny Dawe said: "The extension will provide state of the art exhibition space to enable Edinburgh to attract more world-class conferences.

"This will help ensure that Edinburgh retains and enhances its international reputation."

Stephen Gallagher, executive director of Scottish Enterprise Edinburgh and Lothian, said

it was hopeful negotiations with the council to finalise the funding package would be concluded in the next few weeks.

He added: "Scotland's capital should have the conference facilities which can generate substantial revenue for the tourism sector and the wider Scottish economy."

Building work on the EICC extension had originally been scheduled to start in 2004, the plans having been put out to tender two years previously.

However, the scheme suffered a major setback after the council admitted it had mishandled the tendering of the contract – and it emerged that the city's design champion, Sir Terry Farrell, was part of the winning consortium.

Planning permission was eventually secured by late 2006 but last April, Cala-AWG walked away.

The sticking point was the council's refusal to treble an agreed £5m subsidy on the grounds that it would have been a breach of procurement laws.

EICC chief executive Hans Rissmann said: "A robust funding package unlocks this much needed development for Edinburgh and we stand ready to deliver."

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