A huge construction planned for Galway Harbour has now been scaled down.

Plans for the redevelopment of the city port have now 'shrunk' after a prospective buyer backed-out of a pre-contract agreement for the purchase of a €26m site earmarked to finance the project.

It is understood that fuel supplier Topaz entered into an agreement with the State-owned company and paid a deposit of €130,000 for the purchase of land in the vicinity of the harbour, valued at €26m at the height of the property boom.

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However, it was revealed at a Galway Harbour Company board meeting that non-compliance with the terms of the pre-contract agreement had allowed the prospective buyer to avail of a loophole and back out of the €26m deal.

The site is now thought to be worth just a fraction of the €26m price negotiated between the two parties around three years ago prior to the collapse of the property market.

Galway Harbour Company is instead planning to self-finance the ambitious redevelopment of the docks through the sale of land and will not receive any government funding for the project and has now "scaled back" its proposal for the redevelopment of Galway harbour 'to take account of the current economic climate".

The project will now be undertaken in four phases instead of two and won't now be completed for seven years.

Galway Harbour Company is currently engaged with An Bord Pleanála in revising its planning submission in relation to the project.

(BMcC/GK)