There are calls for the Cardiff Capital Region to be held more accountable following a legal row over Aberthaw power station.
In February, the Brown and Mason Group successfully challenged the decision to award the contract to Erith, a company which had been set up by the CCR, which includes Vale of Glamorgan Council.
The group's chair Mary Ann Brocklesby told the Senedd's economic committee: "The amount of the settlement for the Aberthaw demolition procurement process...was £5.25 million."
"I'm not able to say much more at this point because we are undergoing an independent review which we commissioned as political leaders to set in train precisely at the point that we knew we were going through a legal process."
MSs were told that the court case had not affected demolition work at the site, which was bought for £8 million by the CCR in 2023 and has been earmarked for a green energy hub.
CCR chief executive Kellie Beirne said an independent review was underway to establish "much more open about what happened and take steps to ensure that this can't happen again."
Following the hearing - held as part of an Senedd inquiry into city and growth deals - the chair of the economic committee said the region's "Labour leadership" has "serious questions to answer".
Conservative MS, Andrew RT Davies, said: "Taxpayers will pick up this £5.25million bill thanks to the Labour-run Cardiff Capital Region's bungled handling of this contract."
"This is frankly unacceptable, as this cash should be going towards improving our public services."
Plaid Cymru councillors in the Vale of Glamorgan said there was a need for "improved scrutiny and accountability" at the CCR.
Cllr Mark Hooper said local councillors "have little confidence in the Cardiff Capital Region to deliver on their promises."
"The failure of the Aberthaw demolition procurement contract has cost councils in South Wales millions of pounds, at a time when local council services have been cut to the bone but council tax rising."
"But why was this information made available by the Cardiff Capital Region to a Senedd committee, but not to the councillors who are funding this project?"
"We need answers directly to the Vale of Glamorgan Council and to Vale of Glamorgan councillors."
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