The Art Gallery of NSW’s long-planned Sydney Modern expansion is without a builder after Lendlease pulled out of the running to construct the $344 million project.

Six years after it was announced, and eight months after construction was due to commence, the ABC can reveal the project is now effectively in limbo, with the NSW government again searching for a company to build it.

The revelation comes less than a week after the ABC revealed Lendlease backed out of building the Sydney Football Stadium at Moore Park, despite carrying out the project’s demolition phase.

Sydney Modern was billed as a public asset of “enormous cultural and economic benefit to Sydney” and promoted as an integral extension of the existing Art Gallery of NSW (AGNSW) that would deliver “more art to more people”.

Infrastructure NSW last year invited three companies to tender for the expansion, from six that were interested.

Australian firm Probuild and a joint venture between Japanese firm Obayashi and Australia’s Built, both abandoned the tender process late last year.

It is now confirmed Lendlease – the only company that went to tender – is out of the project.

The project was originally funded in the 2017 State Budget. Photo: Art Gallery of NSW

The NSW government pledged $244 million to support Sydney Modern in the 2017-18 State Budget.

The other $100 million was raised through private philanthropy from donors such as Gretel Packer, gaming machine millionaires the Ainsworth family, Westfield’s Lowy family and notable philanthropist Kerr Neilson.

Susan Wakil and Isaac Wakil’s Wakil Foundation stumped-up $20 million – the biggest single cash donation in the AGNSW’s history.

Infrastructure NSW, which is managing the construction on behalf of the NSW government and AGNSW, did not respond to detailed questions on the proposal and Lendlease’s withdrawal.

Instead, a spokesman said the procurement process to appoint a construction contractor was “ongoing”.

AGNSW director Michael Brand said he had been advised the process was “well advanced” and expected a contract to be awarded “in the near future”.

But NSW Opposition Arts spokesman Walt Secord said it was unclear if the project would stick to its proposed 2021 finish date.

“We don’t know [if] the financials are in place,” he said. “How will it be funded?

“If there’s a cost blowout, will the minister take it from other arts projects?

“There’s a culture in NSW of cost-overruns, Sydney Light Rail, Sydney Football Stadium, Powerhouse Museum [and now] we’re concerned about Sydney Modern.”

Japanese firm SAANA has pared back its original design.

When announced, Sydney Modern was promoted as a way of doubling the gallery’s size by adding function space and more floor room to accommodate temporary exhibitions, similar to exhibition spaces in Melbourne and Brisbane.

The plan was announced in 2013 as a $400 million project. A year later it was revised up to $450 million.

Japanese architecture firm SAANA won an international competition to design the new gallery with its plan for a series of glass boxes arranged in a cascading fashion down the green space, north of the original building.

But the budget for the project was later adjusted down to $344 million to fit the funds available.

Former government architect Andrew Andersons, who designed three previous AGNSW expansions, said SAANA appears to have adjusted the design to fit the latest, more modest budget.

“The competition result was a much grander building than they’re building now. They’ve pared it back considerably,” Mr Andersons said.

“There’s a boom in Sydney and projects like this are difficult. You can understand [construction firms] want to do buildings that will be profitable, so it’s hard to get their interest,” he said.

“It would be very circumspect about accepting a single bid.”

In November AGNSW welcomed planning consent for its expansion, which it said paved the way “for construction to commence in early 2019”.

–ABC