The signing of the crucial agreement between Southwark Council and Lend Lease to redevelop the Elephant and Castle is now more than 15 months behind the original schedule.
The £1.5 billion regeneration of the Elephant & Castle has been hit by yet another delay as the signing of Southwark Council's development agreement with Lend Lease has been postponed by another three months until March 2009.
By November 2007 the target date for the deal had slipped to January 2008. This time last year the council the council's forward plan indicated that the document would be signed in May 2008.
In August the two sides signed a "partnership agreement" – effectively an agreement to keep working towards a full agreement.
Now the council's latest forecast indicates that the deal won't be done until March 2009: 15 months behind the original schedule.
In October the councillor responsible for the Elephant & Castle project described an agreement with Transport for London over the remodelling of the Northern line station as "the final major hurdle" to signing the Lend Lease deal.
"I am totally committed to the regeneration of Elephant & Castle and I have been personally reassured that despite the current economic situation, Lend Lease wish to conclude this deal as quickly as practical," says Cllr Paul Noblet, executive member for regeneration.
"However, as many people already know, we are involved in protracted and complex negotiations with Transport for London over changes to the local transport network.
"It would be irresponsible for either side to agree a deal before the negotiations with TfL are concluded."
Southwark's opposition Labour group has accused the council administration of being "misguided" in its plans for the Elephant.
"The Elephant & Castle project has had more delays than an old British Rail train service," says Cllr Paul Bates, Labour spokesman on housing and regeneration.
"This latest setback isn't going to instil further confidence in a project that is now beginning to look less and less like the scheme which council originally envisaged and planned for. If these delays carry on much longer, the entire masterplan for the area will need to be ripped up and started again.
"While the economic downturn has certainly been a factor in the slowdown of the project, it's clear also that political shenanigans from the Lib Dem/Tory council, from Transport for London and from Boris Johnson has also had an impact.
"Southwark Council was wildly optimistic and misguided to put forward a regeneration plan that required the tearing up of arterial road routes. Anyone with any real sense of how strategic regeneration works in the capital would know that re-routing major roads was never going to happen, so it's little wonder TfL baulked at that proposal.
"Transport for London themselves aren't free of blame – they've dragged their lazy feet for months and months over the transport infrastructure elements of the programme which has now caused Lend Lease to get increasingly itchy feet. Until the details of the Northern Line tube station review is sorted, this project will not move forward.
"Additionally, I have continued to press officers and the executive member, Cllr Paul Noblet, over the financial viability of Lend Lease and their capacity to deliver on this project. Lend Lease has recently withdrawn funding from various developments around the country.
"Despite my being reassured that Lend Lease are committed to the scheme, I continue to have significant concerns about their long-term commitment and financial strength to deliver on this absolutely vital project. The more this project is delayed, the more concerned I get."