2000-home east London regeneration scheme reduced to four bidders over cost fears

Three bidders out of seven have withdrawn from the race to redevelop the 2,000-home Ocean estate in east London, plans for which form one of the longest-running sagas in British regeneration.

Tower Hamlets council confirmed that only four consortiums are now bidding for the job. It is understood that the three withdrew because of bidding costs, which have been exacerbated by the difficult housing market.

A source at a consortium that withdrew said: “These costs can’t be sustained in the current market.”

It is thought that the remaining bidders include First Base and East Thames Housing Group; InSpace and Circle Anglia; and Countryside and Swan Housing.

The consortiums that have pulled out are Southern Housing Group with contractor Galliford Try and architect HTA; housing association Affinity Sutton; and social landlord Genesis.

Plans to redevelop the estate commenced eight years ago. An earlier attempt to transfer the estate’s 2,000 homes to housing association Sanctuary fell through when residents voted against it.

It is understood that bidders withdrew because Tower Hamlets was trying to get all seven to engage in a competitive dialogue process whereby they would submit plans to the council for approval.

Mike De’Ath, business development director of HTA, said: “Competitive dialogue can work, but it’s best kept to two or three players.”

A council spokesperson admitted that three of the seven shortlisted bidders had dropped out of the scheme, but denied that it had ever been the council’s intention to have a competitive dialogue process with all seven.