Queenstown’s council’s approved a $20.61 million budget increase to complete stage one of the CBD bypass through Melbourne and Henry Streets — and hasn’t ruled out further cost increases.
Agreed to by councillors at a public-excluded session last month, the overrun’s blamed primarily on labour shortages, inflation increases and ongoing global supply chain pressures.
The Arterial Stage 1 budget now stands at $108.84m, up from $88.23m agreed by council in October, 2021, and massively up from a provisional budget in the original 10-year plan of $49.50m.
However, the estimated net cost is $58.84m, after accounting for $50m from the government’s infrastructure reference group fund — plus offsets from the eventual transfer and/or sale of properties acquired through the project.
Council boss Mike Theelen says the previous forecast was based on price data from June, 2021, when only 30% of the design had been completed.
‘‘This is not uncommon for a project of this scale, duration and scope.
‘‘With significant progress since then, we are now able to provide this latest forecast based on design 100% completed and procurement of subcontractors and materials at 75%.
‘‘At the same time, the ongoing challenges of managing such projects since the pandemic remain.’’
Though cost increases, labour shortages, shipping delays and capacity issues had been factored into the latest forecast, and contingencies were in place, Theelen says ‘‘it’s impossible to rule out further increases given the state of the global economy and sometimes unforeseen conditions below street level’’.
He adds a portion of the cost increases will be offset by council’s delivery partners in Kā Huanui a Tāhuna (Whakatipu Transport Programme Alliance) — Waka Kotahi NZ Transport Agency and design and construction companies Beca, Downer, Fulton Hogan and WSP, along with council.
‘‘The Alliance is actively looking at ways to mitigate cost increases as it works to deliver this significant infrastructure project that [by late next year] will ultimately remove traffic from Stanley St to enable more public transport and more open spaces in the town centre for people to enjoy.’’
However the government hasn’t been asked for additional funding at this stage.
Meanwhile, council says stage one’s on track to be completed by the end of next year.
Asked to comment on the budget blowout, councillor Craig ‘Ferg’ Ferguson says: ‘‘It’s extremely frustrating to go back to the table and have to contribute more money.
‘‘I suspect it’s not the last time we go back for top-ups on projects.’’
Gorge Rd and other delays
An upgraded intersection at the Gorge Road end of the Arterial Stage 1 project had been due to be completed before winter.
Delays caused by unexpected issues — like an extra live water main that wasn’t known to exist and a layer of saturated silts requiring specialised dewatering equipment — have pushed completion back to wards Christmas.
However the road between Stanley and Weaver Sts will reopen on June 16, for the ski season, then reclose in October.
Meanwhile, Brecon St works — part of the town centre street upgrades project — were due to be completed this month.
Delays, however, have been caused by a major redesign of underground services to protect a Wellingtonia tree’s root system.
Works will now be completed in spring when the winter moratorium on pavement sealing expires.
Rees St works, due for completion in February, will now be completed next month, after delays caused by the discovery of uncharted underground services, and a lack of skilled labour.
