Key Points:

Auckland City ratepayers will have to make up the lion's share of a $16.6 million blowout in the city art gallery's development budget.

A new cost for modernising and enlarging the gallery has been confirmed by the city council's finance committee after receiving the lead tender for the building modifications.

The bid of preferred supplier Hawkins Construction came in at $85.38 million - bumping the final budget cost up to $113 million, which includes a contingency of $5 million.

Only nine months ago, the council approved a revised project budget of $96.4 million, which also included seismic strengthening and heritage conservation.

This cost was 9 per cent greater than that reported by the council in its June 2005 rates plan.

Gallery director Chris Saines said this rise reflected two years' delay to the work programme and design during regulatory processes and the issues raised by the council's urban design review panel.

The task of meeting that revised budget was split three ways.

The council undertook to provide $33 million, the state $30 million through the Regional Museums Grant, and the Art Gallery Foundation took on the task of raising the remaining $33.4 million.

Council deputy finance chairman Aaron Bhatnagar said the final budget included rising building and construction costs as well as design modifications in order to gain Environment Court approval. The cost of the modifications would be $5.4 million, he said.

"That sum is quite wounding but it's people's democratic right to pursue appeals to the Environment Court."

Mr Bhatnagar said the budget increase of $16.6 million had been partly offset by interest gained on money put aside for the project, development contributions and already approved budgets.

But it left ratepayers with an additional $10.47 million to fund, probably through council borrowing.

It would not affect the rates needed for 2008-09, he said, as any loans would be raised over the next three years.

Thursday's council meeting would have to approve the appointment of Hawkins Construction and the gallery's final budget.

"We want to get on with restoring and developing this vital asset for the community," said Mr Bhatnagar. "We need to do this quickly and efficiently to avoid any further cost escalations."

The main gallery closed last month and shifted across the street to temporary premises in the New Gallery.

Work could start in May and finish in September 2010.

The Government has announced a grant of $30 million spread over four years and the Art Gallery Foundation says it has so far raised $15.5 million.

Auckland City Art Gallery

* Development cost up from $96.4 million in July to $113 million.
* City council share rises to $48.1 million.
* Delayed two years by consent processes, appeals, design review.
* Aims to enlarge display and gallery space by 50 per cent.
* Project completion late 2010.