Town Manager Mike McGovern said the northern portion of the sewer project originally slated for completion this year is now on hold indefinitely because early phases of the project have cost more than initially anticipated.

“We’ve got money issues,” said McGovern. “I want to get through this year’s project and see where we stand.”

McGovern said he received a bid of around $4 million for the northern part of the project originally estimated to cost about $900,000 in the 2004 plan crafted by OEST engineers.

A bond was approved by the Town Council last year for $5.4 million and the town has already spent $4.54 million in signed contracts and is about to spend another $1.4 million when the town signs a contract with Shaw Brothers for the Ocean View and Bay View Roads, which originally were estimated at about $450,000.

McGovern said increases in fuel and materials caused such a wide discrepency between estimated costs in 2004 and actual costs in 2006.

However, McGovern is expecting a reimbursement from the Portland Water District for the cost of replacing water lines during the project. Though he said he didn’t have an exact figure he is expecting the town to receive somewhere between $300,000 and $1 million.

This, however, most likely won’t cover the remaining cost of the project estimated in 2004 to cost $900,000. McGovern said there is also a contingency fund, money set aside for unexpected situations, that if unused, could go toward the unfinished portion of the project.

McGovern plans on completing the portions of the project also begun as well as the Ocean View and Bay View part, slated to start in early July and then go from there.

Residents of Woodland and Charles Road, Sea View Road, Wood Road, Spurwink Avenue, Cheverus Road and Surf Road will not see their roads dug up for sewer reconstruction this summer.

If the town finds itself short on cash for this project, McGovern said he is uncertain how they’ll pay for the unfinished portion. He speculated that if necessary the town could pick off the remainder of the project street by street over the years. Whether the money to pay for it would be borrowed or included in the town budget, he was not sure.