Wellington City Council’s new sludge minimisation facility.
Wellington ratepayers will have to foot the bill for an eye-watering potential $83m budget blowout to the city’s first-of-its-kind under-construction sludge minimisation facility.
At a Wellington City Council briefing today, the details of the increase were laid bare with councillors told the current cost of the project has climbed to between $478m and $511m.
It is not the first time the cost has escalated. It was initially set to cost $200m, this climbed to $400m in 2022, before being raised again to a budgeted $428m in June 2023.
It works out to $6636 per Wellington household and was initially planned to be paid for fully by a targeted rate over a 30-year period. The council is now exploring other options for funding the extra cost, including by taking on further debt.
Wellington City Council’s chief infrastructure officer Jenny Chetwynd told councillors that between March and June this year the project’s financial reporting started showing the budget was likely to escalate, prompting a review.
The blowout is a “manifestation” of the project’s complexity, Chetwynd said, and the high risk initially taken on by the council.
Chetwynd said the council initially took on a high level of risk for the project because of low interest by contractors to take on the work.
Key areas of the project were not initially budgeted, including decommissioning the Carey’s Gully dewatering plant and pipe and the removal of Field Air Engineering on the site.
Commissioning work, like testing equipment, operator training and resolving defects, was initially budgeted at $2.5m, and has now risen to $20m.
The council will next week need to vote on additional funding for the project.
At the end of 2022, Wellington City Council approved the construction of a new plant at Moa Point to treat sludge by thermal hydrolysis which acts like a pressure cooker.
Sewage sludge is a natural and unavoidable byproduct of the process of treating wastewater.
It has a high moisture content so it’s not easy to dispose of and can create a foul smell ifnot handled properly.
Each day, more than a million litres of sludge travels down a 9km pipeline from the city’s wastewater treatment plant at Moa Point to a dewatering plant at the Southern Landfill where it is partially dried.
This removes most of the water, leaving between 40 to 50 tonnes of sludge to be buried with landfill waste each day.
About 374,000 tonnes of sludge is processed at Moa Point annually - a quantity which is expected to increase as the population grows.
At the same time, volumes of solid waste going to the landfill are projected to decrease as the council moves on waste minimisation.
This is a problem because the sludge is currently disposed of by mixing it with solid waste, which can be no less than a ratio of one part sludge to four parts waste.
The volume of sludge being produced is already close to or will soon exceed this consented ratio, so Wellington City Council has had to come up with a new way of dealing with it.
The fragility of the existing process was exposed in 2020 when the two high-pressure sludge pipes running underneath Mt Albert failed, triggering a smelly 24-hour trucking operation to get it to the landfill.
“Poo trucks” had to make 150 return trips a day to shift a million litres of sludge from Moa Point.
A team of technicians had to fly from Germany to fix the pipes as the first wave of the Covid-19 pandemic raged across the globe.
This sludge spreadsheet saga has brought up old grievances over another infamous budget blowout in the capital, with some drawing parallels to the $147m Wellington Town Hall cost increase.
Since the town hall was declared earthquake-prone and closed in 2013, the cost of the work had grown from $43m to $60m to $90m to $112m to $182m before hitting $329m.
The council agreed to fund a cost increase of up to $147 million in 2023 - a situation the Deputy Mayor described at the time as a stalemate.
Chetwynd said because the sludge minimisation facility was being worked through at the same time as the Town Hall, it was difficult to implement lessons learned from that project to the sludge minimisation facility.
Asked by councillor Ray Chung if there is a “plan B” to not fund the project, Chetwynd said while it is an option for the council, it is contractually obligated to complete it and said there is already a significant sunk cost.
Ethan Manera is a New Zealand Herald journalist based in Wellington. He joined NZME in 2023 as a broadcast journalist with Newstalk ZB and is interested in local issues, politics, and property in the capital. He can be emailed at ethan.manera@nzme.co.nz.