Council’s planning and regulations manager John Griffiths said contaminated soil was discovered in a bore at the Pynsent Street end of the site, which once housed a petrol station.

He said a consultant was called in last week after workers noticed an odour coming from a bore hole.

“The consultant did some testing and we’re waiting on the lab to finalise the results,” he said.

“We know there is some contamination from the fuel, but it might only be in one small area or it might be in a larger area.

“We’re expecting the consultant’s report by the end of the week. Until we get that report we don’t know the extent of it.”

Mr Griffiths said council and contractor Kane Constructions would be able to reprioritise work when more information came to light.

“There is work that can be done in the existing building and also outside – but until the extent of the contamination is discovered, we will have to put most of it on hold,” he said. 

The $19.6-million project  – which is expected to be finished mid-2015 – has already experienced delays in the past month. 

Mr Griffiths said Kane Constructions’ scheduled shut down during the Easter period and subsequent wet weather had affected the amount of work at the site.

He said rain had delayed the laying of concrete near the town hall supper room.

He said workers were back on site on Thursday installing plumbing fittings.

“Once that is finished – and there is a series of days with fine weather – they will be able to start concreting again,” he said.

Mr Griffiths said the delays would not have a major impact on the project, which includes redeveloping Horsham Regional Art Gallery, building a new performing arts centre and streetscape works in Pynsent and Wilson streets.