A CONSTRUCTION company has gone bust before completing the private road network serving luxury houses it built in Melrose.

And although the firm lodged a £50,000 security bond with Scottish Borders Council when it began work on the development at Dingleton Road, the value of the required roadworks has now risen to £85,000 – leaving the cash-strapped local authority to fund the balance.

SBC’s executive heard last week that Pinecraven Construction Ltd, which had a head office in London, went into voluntary liquidation at the end of 2013 and was formally wound up in June last year.

In 2006, the firm received construction consent from the council for phase two of the development – at Harleyburn Court opposite Melrose Golf Course - and duly lodged a cash deposit of £50,000 with the council.

Such payments are required under Scottish Government regulations to ensure the completion of road works to adoptable standards in the event of a developer ceasing to trade.

Although that sum is now worth £55,000 with added interest, councillors heard that an increase in the cost of materials over the last nine years put the estimate of outstanding work at £85,000.

And the regulations stipulate that, if a developer does not complete road works within a specified time limit, it is the duty of the local roads authority (SBC) to finish the job.

The executive heard that the council had received a number of representations from disgruntled residents of Harleyburn Court, where house prices start at over £300,000, demanding completion of their roads.

They may have to wait a little longer, however.

A report from senior roads planning officer Alan Scott indicated that the third phase of the housing development – which shares the same access as the second phase - was currently under construction by another developer.

“The council may have to delay a start date for these works…to ensure there is no conflict between the contractors on site,” said Mr Scott.

Meanwhile, he gave an assurance that measures had been put in place to ensure tighter control of the council’s “security for private road works” process.

“The Society of Chief Officers of Transportation in Scotland [SCOTS] is currently seeking changes to legislation which will give councils more power when seeking to pursue legal action against any developer who does not continuously provide the relevant security for a housing development,” added Mr Scott.

Councillors reluctantly agreed to pay the extra £30,000 from the coming financial year’s budget while noting that, as a result, other identified works may have to be deferred to another year.