RETAIL giant Tesco has been unable to finalise a deal to build a new Bournemouth store and a new planning application will need to be resubmitted.

The store was going to be built on the site of a former shopping parade in Kinson after a developer won planning permission.

But Tesco and developer HHR Properties could not agree the terms of deal.

The supermarket giant had a two-month extension to sign a ‘Section 106’ agreement, which would have meant paying £200,700 to the council’s highways department, but it did not sign up.

Cllr Ron Whittaker, speaking at the March meeting of Bourne-mouth Chamber of Trade, said: “It’s a problem between Tesco and the developer I understand. The shops are very untidy and as a Kinson resident I feel angry and frustrated.

“There were other supermarkets in the running, as I understand it Morrisons was one of them, which would have been great for Kinson.”

The shopping parade, off Millhams Road, is still part occupied by long-term lease holders.

Greengrocer Malcolm Townsend has a lease until November, 2013.

The work could not have started, regardless of whether the deal had been signed, until the leases ran out – or until the shops accepted a pay-off. HHR said that over the past two months it had been “reviewing the economics of the scheme” with Tesco.

Director Andrew McLelland said: “Unfortunately, we are still not in a position to complete the Section 106 agreement.

“Although this is disappointing, we remain committed to redeveloping the site on the same timetable, once we have obtained vacant possession towards the end of next year. “Once outstanding negotiations are done we would expect to come back to the council with a finalised scheme and start work late in 2013.”

Mike Holmes, Bournemouth Council’s head of planning, told the chamber of trade meeting: “We share the councillor’s frustration on this.”

Peter Matthews, boss of Castlepoint shopping centre, said he understood Tesco was refurbishing its existing stores and that may have diverted money from new schemes.