By John Cousins
Baywave has suffered a $3 million cost blowout.
Tauranga's newly opened aquatic and leisure centre at Bayfair has cost $19.3 million to build - nearly 20 per cent more than the original $16.3 million budget on which the city council went out for public consultation.
The disclosure to a council
committee today is the latest controversy to hit a project that dominated headlines when the council cancelled the operating contract with H2O Management, after director Peter McNamara was jailed for rape last year. The old deal with H2O covered all the council's swimming pools and the cancellation meant H2O pulled the plug on its $3 million contribution to building the new complex.
The rejigged operating contract let to LeisureCo has contributed to Baywave finally costing $16.1 million to build - $2.8 million more than Mainzeal's original tender.
On top of that were another $3.2 million of expenses relating to design, project management and consent costs, plus building the 120-vehicle carpark.
Council business services manager Malcolm Gibb explained that under H2O's cancelled operating contract, the upstairs portion of Baywave would have been left as a shell by builder Mainzeal, leaving H2O to fit it out and equip the kitchen, creche and gym.
But once H2O was out of the picture, the council called for fresh operating tenders on the basis that Baywave was finished.
The upshot of the council paying for all the work on Baywave was a contract in which it receives $2.8 million more over five years than it would have got from H2O.
The new operator is Australian-based LeisureCo, which signed up for five years, compared with H2O's 15 years.
However, the $2.8 million was across all the council's pools being run by LeisureCo - Baywave, the Mount Hot Pools, the Greerton Aquatic Centre and the Otumoetai and Memorial Park pools.
The cost increase and loss of H2O's $3 million meant the council was now about $4.5 million short of the target that ratepayers meet half of Baywave's construction cost.
The council is negotiating for the Tauranga Energy Consumer Trust to make up at least $3 million of the difference. The trust has already contributed $4 million to Baywave, plus a planned $1 million from tax credits.
Mr Gibb also blamed the "competitive construction market" for the cost escalations in Mainzeal's contract - particularly the rising cost of building materials and labour.
Fitting out the upstairs portion of Baywave cost an extra $500,000 and equipping it a further $500,000.
The gym equipment was being leased to LeisureCo.
Mr Gibb said that although Baywave's capital costs were greater, the contract with LeisureCo was a better solution over the 15- to 20-year life of the building.
About 43,000 people have visited Baywave since it opened without any decline in attendance at the council's other four pools.