Whanganui District Council has approved a $21.9 million building contract for the Sarjeant Gallery redevelopment project, signalling the final step of the pre-construction phase.

Last week the council signed off on a variation to contract with construction company MacMillan & Lockwood for the second phase of the project, a $21.9m refurbishment and earthquake strengthening of the existing gallery building which has been closed since 2014.

It brings the total price tag to $49.3 million - nearly $15 million more than estimated in 2016.

"Our decision to proceed with awarding the contract variation represents the final step in the pre-construction phase, which has been ongoing since 1998," mayor Hamish McDouall said.

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The first part of the contract was for the new wing of the Sarjeant Gallery, with McDouall saying the second part is effectively the "variation to contract".

"Investigation work has been done over the last few months to give us firmer prices.

"We've been doing a lot of digging down and looking to see where we can save costs over the last few months."

McDouall said they have altered the plans for reconstruction of the old wing of the Sarjeant. Instead of base isolating it, they have decided it's cheaper and less invasive to "essentially strap" the old building.

Funding for the Sarjeant Gallery redevelopment project comes from a combination of sources, including $12 million from the Provincial Growth Fund, $10 million from the Ministry for Culture and Heritage, $6 million from the Lottery Significant Projects Fund and $800,000 from the Lottery Environment and Heritage Fund.

The Sarjeant Gallery Trust has raised more than $9.6 million in community grants and donations, interest has netted more than $800,000 to date and Whanganui District Council has allocated $5 million to the project in its long term plan.

"The price to restore and earthquake-strengthen this nationally significant building has increased from earlier estimates and, along with other costs of the development such as landscaping, equipment and fees for professional services, the total budget for both wings of the redevelopment, excluding contingencies, now stands at $49.3 million," McDouall said.

The project budget has, until now, had to remain in confidence "to support a robust tendering and procurement process", he said.

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"I'm pleased we're now able to share this with our community as we move forward with the redevelopment."

The council has agreed to meet future underwriting costs if required, but McDouall said there is no immediate impact on ratepayers.

"We've also been informed that the project will see an impressive $15.4 million going to Whanganui contractors. It's exciting to see that jobs for Whanganui people are becoming a tangible reality, particularly at this time."

The total budget for the redevelopment project is now $49.3 million. Photo / File
The total budget for the redevelopment project is now $49.3 million. Photo / File

Fundraising will continue to meet the increased costs.

"The Sarjeant Gallery Trust is absolutely committed to the ongoing fundraising for the reconstruction to help meet these recent cost escalations and lessen any potential exposure to ratepayers," Sarjeant Gallery Trust chairwoman Nicola Williams said.

Project director Gaye Betty said the second part of the tender process was for the seismic strengthening and refurbishment of the existing 100-year-old gallery.

"The refurbishment will upgrade a building constructed in the early 1900s to contemporary international standards including modern temperature and humidity control which will protect our taonga in ways never imagined when the building was first designed," Batty said.

"The existing building will have an innovative post-tensioned strand strengthening system within the brick structure between the Oamaru stone external cladding and ornate interior plasterwork, which both strengthens the building and protects the heritage features.

"With modern seismic strengthening, climate control, fire protection, storage and amenity standards, this redeveloped gallery will be a jewel in our crown, adding to Whanganui's growing reputation as a regional cultural centre and visitor destination."

Construction of the redeveloped gallery is expected to take 32 months.

The council has appointed councillors Kate Joblin and Graeme Young as representatives on a Sarjeant Gallery redevelopment advisory committee that will oversee the project.