There are fresh fears for the future of the stalled Cork event centre project after confirmation that construction inflation is running at 7% as efforts to resolve its complex State-funding mechanism drag on.

The soaring building costs could have implications for the venue’s €30m State-aid package and the various public spending code compliance issues linked to that, city officials have warned.

The warning came after Independent councillor Mick Finn requested an update on progress over funding talks on the controversial €80m project which has yet to see a brick laid more than three years on from the sod turning.

Mr Finn said the entire debacle has been marked by “one disaster after another”.

“Realistically, it could be another two to three years before construction starts on this. We’ve seen from the success of the Musgrave Park gigs and the Live at the Marquee again this year that there is a ready market in Cork for a venue like this.

The funding issues really need to be resolved once and for all. The longer this process takes, the less likely it is to ever happen. And with several major docklands project underway or in planning, the city centre really needs this development to happen.

“It will act as an anchor for the traditional city centre as the city expands eastwards into the docklands,” he said.

The project has been bogged down since December over the classification of €9m of the €30m State-funding package as a loan.

BAM last week dealt with the outstanding planning issues and submitted further information in response to planners’ concerns about the design issues linked to the enlarged 6,000-capacity venue. A planning decision is due early next month.

Mr Finn said he hoped some progress would have been made this week given the involvement since April of Martin Fraser, the secretary general to the Government and the secretary general of the Department of the Taoiseach, in a bid to help resolve the funding impasse.

However, the city council’s head of finance, John Hallahan, told Mr Finn that Mr Fraser, chaired two meetings recently between Cork City Council, BAM, and the venue’s preferred operators, Live Nation and a number of issues are unresolved.

“All sides have reiterated their commitment to deliver this project and have positively discussed the challenges that remain, which include a level of design uncertainty, amount and form of public funding and the continuing amount of construction inflation currently running at 7%,” he said.

“The resolution of these issues may well have further implications for state aid and the public spending code compliance.

"On foot of these discussions, BAM has invested significant funds in preparing all further information requested of them under the planning process which has now been submitted to the city council and the review of this information has commenced.”