Wellington City Council has poured a further $10 million into the Omāroro Reservoir project to cover its latest budget blowout.
In 2013 the project was pitched at $17.9m but since then the cost has significantly escalated to reach an estimated $68m.
The new 35-million-litre reservoir will more than double the city's water storage, making the water supply more resilient to disaster and disruption.
It will hold 14 Olympic-size swimming pools' worth of water and will be located above the playing fields at Prince of Wales Park in Mount Cook.
The latest $9.9m cost increase is due to an unforeseen change in seismic standards, delays caused by Covid-19, and the difference between the estimate and the post-tender price.
Mayor Andy Foster said in a Strategy and Policy committee meeting today that the reservoir was a vital piece of infrastructure.
He noted a lot has changed over eight years, including the scope of the project, the infrastructure being underground and the hospital no longer footing half of the bill.
"Sometimes we get ourselves into the position where these things are described as cost blowouts, but in fact they're a completely different project and funded in a completely different way," he said.
It is estimated a loss of water supply, or the significant water use restrictions to prevent it, would have an economic impact of up to $100m a day.
Three Waters portfolio leader councillor Sean Rush told his colleagues they didn't have much choice but to sign off on the extra money if they wanted to secure the city's drinking water supply for a growing population.
"This is a project that's not glossy, there are no egos involved, but it is absolutely critical."
He said the council could have confidence in Wellington Water's capability to execute the project, which has recently been exemplified through large-scale repairs under Willis St and Mt Albert.
Furthermore, an independent review of the Omāroro project did not raise any concerns or issues beyond those considered in the business case.
"It's nice to be building something and not repairing something, so let's get on with it," Rush said.
The vote to sign off on the extra $10m for the project was unanimous.
But councillor Fleur Fitzsimons said she was considering a protest vote, voicing concerns about the project's escalating cost and Wellington Water's capability.
"We simply can't have large-scale infrastructure projects reliant on a small number of key individuals which is what the defence seems to be every time concerns are raised about Wellington Water.
"We need the type of modern Ministry of Works that has been discussed to make sure Wellington's major infrastructure projects can be delivered on time and on budget," she said.
Fitzsimons successfully got an amendment across the line noting an independent engineer was now representing the council on Wellington Water's Major Projects Governance Group, and a senior officer would represent the council on the reservoir project's steering group.
Wellington Water will also be formally briefing the council every six months on progress.
Councillor Iona Pannett said she was "a little bit grumpy" about the escalating costs and said a lesson could be learned from putting preliminary costs in the council's budget.
Pannett said councillors needed to hold Wellington Water to account to make sure the project is done properly, but they also needed to provide support.
"The economic case is strong, we cannot just turn off the water to the city ... it really is just too big to fail."