Whangārei's new $59 million civic centre takes shape in Rust Avenue. Photo / Michael Cunningham
The cost of Whangārei's new civic centre has blown out to almost $60 million.
Whangārei District Council (WDC) voted at Thursday's council meeting to add another $5 million to the Rust Avenue building's cost.
This nine per cent increase takes the cost of the 470-person building to $59 million, and is the sixth cost hike in four years.
The district council said in June 2018 that the civic centre would cost $37 million. In June the following year, the centre was announced as a $38 million project.
By February 2020 that had climbed by $10 million to $48 million, and in April 2021 the revised cost in the wake of new quantity surveyors coming on board was $55.1 million. That decreased to $54.1 million after contingency allowances were reduced.
WDC general manager corporate Alan Adcock said the civic centre's price increase was not unique.
"This [$59 million] is obviously well above the previous approved budget of $48 million, but it should be noted that the construction process coincided with unprecedented events arising from the Covid pandemic," he said.
Adcock said the latest increase was mainly a result of Covid-19. The headwinds the building project faced from its start had now grown to force eight (gale) or nine (strong gale) on the Beaufort scale that measured wind speed on a 12-point scale.
"Two days after the [building] design phase started on March 23, 2020, the entire country went into level four lockdown as the first wave of Covid-19 struck," Adcock said.
"The pandemic has had ongoing negative impacts on the project."
WDC was facing more than $550,600 in extra project costs from payments for contracts needing to be extended due to the pandemic. These amounted to $5,976 a day.
Extra costs for the use of the site's scaffolding, propping and security due to the site being shut down during the Covid-19 lockdown also contributed to that figure.
Construction material costs had increased. Supply chains were affected. Sub-contractors and equipment had to be substituted due to Auckland border lockdowns. Some components were airfreighted at a higher cost as pandemic-affected shipping timeframes would have otherwise meant their supply and installation would be late.
Warehouse space had to be rented to store goods ordered ahead of installation. Site security had been increased to 24 hours as the risk of product theft grew.
Furthermore, asbestos was unexpectedly found in the original RSA building on site.
"That was $100,000, bang," Adcock said.
Whangārei Mayor Sheryl Mai said the extra civic centre costs would be part of next week's 2022/2023 Annual Plan budget decision meeting discussion.
WDC changed the project's independent quantity surveyor, CUESKO, in April after problems with its costing information. The new quantity surveyor, BBD, reviewed all cost assumptions to that time, confirming costs forecast by the original company appeared insufficient to complete the project to its current scope.
The building's completion date has been pushed out to December.
Cr Nick Connop said despite the cost increase, it was pleasing to see a future-proofed approach which would reduce maintenance costs down the track.
Solar panels on the building's roof would provide power and water for the building would be collected from the roof.
Cr Tricia Cutforth said the new civic centre would save the council $1 million in rent annually for its Walton Plaza staff.
WDC's Long Term 2021-2031 budget already forecast a compounding 4.5 per cent rates increase for each year of its duration. That means a 4.5 per cent rates increase has already been locked in for 2022/2023.
An increase beyond that will be likely from July 1 if councillors at next week's Annual Plan decision meeting decide to include a range of extra spending such as the civic centre, over and above what has already been planned for the year in the long-term plan.
BBD had reviewed cost escalations for the last three years across different project types nationally.
It had found a 12 per cent recorded cost increase over the last 12 months for projects like Whangārei's new civic centre.
"Applying this increase would give an estimated completion cost of $60.6 million which is above the $59 million forecast just prepared by BBD (for Whangārei's civic centre).
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