The contractor submitted the lowest tender and received the highest quality score for its £28m bid, which includes a commitment to create local employment opportunities.

However, a report to Dundee City Council’s policy and resources committee on Monday August 24 notes that because of the project’s importance to the city, its likely community benefits and the radical improvements it will make to the transport infrastructure, funding has been secured for it to go ahead despite the cost being more than £7m over the pre-tender estimate.

The news comes as John McClelland delivered a damning report into the overspend of the £80m V&A Dundee project.

Council leader and committee convener, Ken Guild, said: “We commissioned a report by project consultants Jacobs to find out why the cost was pushed above our original estimates and it notes that there were a number of complex factors that combined to account for the increase.

“Lack of competition in the marketplace combined with the current risk averse approach to rail related projects were key elements, however the council’s new Capital Plan has identified funding for this vital project to go ahead.

“More than 120 construction jobs per year for the two years of the build; £11.6m of gross added value to the local economy; and knock on benefits to the local supply chain all add up to make the concourse project a key economic driver while it is being built. “In addition when the new railway station concourse opens it will create jobs in the associated hotel and retail development.”

A community benefits clause in the tender for the station has identified a number of other local opportunities including using suppliers within a 35-mile radius of the site wherever possible; providing training and mentoring to enable local companies to become suppliers; offering work experience placements for young and unemployed people and developing positions for at least six new and two existing apprentices.

Balfour Beatty has also told the council that its pay and benefits to all employees exceed the Living Wage and it is committed to co-operating and maintaining good relationships with trade unions.

The proposed new station building will occupy the site of the former concourse and it has been carefully designed to create an impressive new landmark within the Central Waterfront development and also an attractive new gateway into the city for rail passengers. It will have a double height ground floor incorporating a passenger concourse, ticketing facilities, as well as a café/restaurant and retail space.

There are three additional floors above this to accommodate a new mid-market hotel.

If councillors back the move work will start in the autumn and take just over two years.