KEY POINTS:
North Shore Mayor Andrew Williams has asked city council staff to "sharpen their pencils" in pricing contracts after shock cost blowouts in three major roading projects.
Mr Williams said yesterday that the council had a tight works budget of $45 million.
He expected staff to seek "extremely competitive"
prices from contractors now that the economy had slowed.
"In the past couple of years things have been getting out of hand because it was a contractors' market.
"There was so much work on they could just name their price, but that has eased off now."
Mr Williams said cost blowouts added millions of dollars to the upgrades of Onewa Rd, Esmonde Rd and Lake Rd, Takapuna.
"Every $1.5 million spent means an additional 1 per cent rise in general rates.
"Even if you take a 53 per cent subsidy on roading from [the Transport Agency] that's not the point. The remainder still has a huge impact.
"I've said to council roading people that we have to provide a lot of community facilities and services - not just roading and cost blowouts affect how much we can do.
"For example, we want to build a northern recreation centre budgeted at $15 million. But if $10 million goes on three roads that affects our budget."
A 50 per cent increase in two years on estimates for the proposed second stage of the Lake Rd upgrade was too much.
Mr Williams suggested a stripped-down version because the project was now expected to cost $16 million rather than $11.7m.
The council will consider next week whether to go ahead with the project, which includes widening and adding a median strip and cycle lanes up to Hauraki Corner.
The council's operating budget for this year allows for loan interest of $21.2 million. This is $6.5 million or 44 per cent higher than last year - because of paying for new capital work. Reasons given for the higher Lake Rd project estimate includes costs of land, professional fees and construction of stage 1 - the new intersection of Esmonde Rd and Lake Rd.
Onewa Rd project cost estimates were revised to account for higher consulting fees, unforseen conditions, increased scope of the project and inflation.
The costs of the Esmonde Rd upgrade increased after it was found a full pavement reconstruction was called for. About $1 million was swallowed by "construction sector escalation" and $700,000 was added for undergrounding of power.
COST BLOWOUTS
Lake Rd
Estimate - $11.7m
Revised - +$4.3m
Esmonde Rd
Estimate - $13m
Revised - +$4.5m
Onewa Rd
Estimate - $7.6m
Revised - +$3.5m
