Govt takes action on $75M cost Chch sports facility blow-out

Article – BusinessDesk

Govt takes action on $75M cost Chch sports facility blow-out

By Pattrick Smellie

Nov. 21 (BusinessDesk) – The government has made its first big call on the Christchurch rebuild, calling a halt to the city’s multi-sports centre project after learning its cost had blown out by $75 million to more than $300 million.

While the city is still expected to get the same or a similar range of sporting facilities, Christchurch Recovery Minister Megan Woods announced she had requested an urgent review of options for the project, such as whether it would be beneficial to combine part or all of the Metro Sports Facility with the proposed Multi Use Arena.

“The people of Canterbury were promised a high quality sporting facility,” said Woods in a statement. “It’s clear that the plan agreed under the previous government was not going to be able to deliver that without unacceptable extra costs. I know we can’t continue with the same approach and expect a different outcome. Today’s announcement is about setting out a clear roadmap to deliver a fit for purpose facility that Cantabrians deserve.”

The plan agreed under the previous National Party-led government appears to have fallen foul of increasing risk aversion among contractors for major construction projects, particularly following a string of earnings downgrades announced by Fletcher Building after it revealed it had underbid on at least two major government-related projects, widely assumed to be the Christchurch Justice Precinct and Auckland’s new international convention centre.

The previous government’s plan was to involve a contractor early in the process, but Woods said official advice showed that if the project went ahead on that procurement approach, it would be well over budget.

“As an incoming minister, I have been conducting a thorough review of progress on the anchor projects and to learn of a $75 million budget blowout on this project was very disappointing,” she said. “That is an undue burden on taxpayers and ratepayers for a project that is already significantly delayed – in fact the facility was due to be opened by now, yet construction has not even begun. We can do better.

“The early contractor involvement will be cancelled.”

As well as reviewing the project, Woods has instructed Otakaro, the development company charged with completing the city’s major post-quake construction projects, to complete detailed design work itself and to prepare for a new build-only contract.

“This will be completed by March April/2018, allowing the facility to be opened in the first quarter of 2021 if we proceed with this contract,” she said.

(BusinessDesk)

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