Christchurch stadium: Fixed price contract finally on offer ahead of city council vote on controversial arena

Detailed reports on the future of Christchurch's stalled stadium have been made public -including the successful negotiation of fixed-price contract for its construction.

And it has emerged that if the project is stopped, $40 million in "sunk costs" will be lost entirely and the budget will rise further if there is any pause on the build.

The Christchurch City Council today confirmed the total budget for the project will sit at $683 million.

Rates in the city will need to increase by 1.24 per cent to cover the cost of what the CCC will need to borrow to fund the project.

In 2010 and 2011 the Christchurch quakes irreparably damaged AMI Stadium - formerly Lancaster Park.

The plan to create a covered multi-use arena was put forward by a Government panel in 2012.

That plan detailed how both local and central government would foot the bill.

The projected cost was $470 million.

But that rose to $533m, and in recent months the Christchurch City Council revealed the proposed design for the stadium, Te Kaha, had blown its budget again.

The cost then spiked to $683m - with the $150m increase being blamed on rising international costs in materials and construction.

The price hike sparked a public consultation last month and the CCC received 30,000 public submissions about the project.

Of those, 77 per cent of people were in favour of meeting the extra costs.

A further 8 per cent supported a pause and re-evaluate approach and 15 per cent wanted a complete halt to the stadium's construction.

Councillors will decide on the stadium's future at a meeting on Thursday morning.

The options are to invest the additional $150m to enable the project to continue as planned, stop the project altogether or pause and re-evaluate it.

Today the design and construction submission for Te Kaha - on which councillors will base their decision - was revealed.

An artist's impression of plans for Christchurch's multi-use arena, Te Kaha. The City Council will make a decision on next steps this week. Image / Supplied

Te Kaha Project Delivery Limited chairman Barry Bragg said today that a "major issue" had been that the lead contractor BESIX Watpac had been "unwilling" to provide a fixed price "because of the volatility in the commodities market".

"We were concerned that would leave the council and the ratepayers of Christchurch exposed to the risk of further cost escalations and that is not something we were willing to accept," Bragg said today.

"The board has been working through the risks with BESIX Watpac and they have now submitted a revised design and construction submission that provides a fixed price.

"The Board has thoroughly reviewed the new submission and obtained independent legal advice on it.

"It is now in a position to make a recommendation to the council that it enters into a Design and Construct contract."

Bragg said based on the new contract he was confident the arena could be delivered for a total budget of $682 million.

"That figure includes sufficient contingency to cover any issues that might emerge during the build," he explained.

"The fixed price means that if the council decides on Thursday it wants to proceed, ratepayers will be protected from any further cost increases."

The CCC will need to add $150 million to its current budget for the arena if it decides to sign the contract this week.

"Consultation with the public shows 77 per cent of the submitters support the council doing that," said Bragg.

A further report to be provided to councillors before the meeting and vote shows the financial implications of increasing the budget.

Bragg said assuming the CCC borrowed the additional money, rates would need to increase by a net 1.24 per cent.

Plans for Christchurch's multi-use arena, Te Kaha. Image / Supplied

"For the average residential property, that means they will have to pay an extra $39," Bragg explained.

"Overall, building the arena will cost the average residential property $144 a year between 2025 and 2027.

"After then, the amount they will need to pay will decrease slowly over 30 years as the debt is repaid."

The report also revealed that if the CCC voted to stop the project there would be $40 million in "sunk costs that it will be unable to recover".

The CCC may then also be liable for further costs.

The report made public today also looks at the implications of pausing and re-evaluating the project.

It states that with prices likely to continue to rise, a delay would "not bring the cost down".

It said the cost could only be reduced by "making significant changes to the arena's scope and size".

Te Kaha will have a capacity of 30,000 and will be used not only for sports matches but concerts, trade shows and expos.

Last year, the council decided to slash the stadium's capacity by 5000 to 25,000 in response to the rising cost - then did a U-turn after a public outcry.

Thursday's council meeting where Te Kaha will be discussed before councillors vote will start at 10am and will be live-streamed via herald.co.nz