Developer Errol Stewart said yesterday that the hotel planned for the Launceston site could now cost as much as $25 million, plus a further $5 million to fit it out.

Early last year Mr Stewart revealed plans to redevelop the disused silos into a $10 million, 64-room hotel.

This has since grown to a $25 million, 140-room hotel, with half of the rooms in the silos and the remainder to be located in a new building on the Lindsay Street side of the development.

Plans include conference facilities for up to 400 people, a bar, restaurants and a gym with an indoor swimming pool.

Mr Stewart said he was in the process of going over the costings of the plan as it looked to be ``a fair bit more than I envisioned''.

``I'm at the point where we decide if we go ahead or if it's more than we can do and we have to come up with an alternative,''  he  said. ``If we think it's going to kill us, we will have to look at the original option.

``We'll do the numbers and if we think it's not sustainable, we'll go back to a smaller hotel, but one way or the other, we'll build a hotel.''

The proposed rectangular addition to the hotel had to be able to accommodate about 8000 tonnes of weight.

Mr Stewart said he had expected the groundworks to cost between $400,000 and $500,000 but this alone was now looking in the vicinity of  $2 million to $3 million.