Tasman councillors give their views over rising Waimea dam costs

An $11.2 million chunk of the latest $29m forecast overrun for the Waimea dam project has been ascribed to Covid-19 related costs and associated delays.
Tasman District Council elected members propose raising an additional $22m for the project via an interest-only loan, with the costs of that borrowing to be spread across general ratepayers. Thats on top of an extra $8m that was already included in the council's draft Long Term Plan 2021-31. Those funding proposals will go out for public consultation before anything is finalised.

A document leaked to Stuff revealed Covid lockdown costs incurred by the contractor building the dam had been valued at between $0.3m and more than $1m. Waimea Water Ltd (WWL) chief executive Mike Scott said the contractors claim was just one part of the $11.2m Covid cost.

The $11.2m not only includes contractor, company and time costs already incurred or are imminent, but also includes prudent contingencies for potential probable costs that have not yet been incurred, such as procurement and supply chain impacts, Scott told Stuff.


READ MORE:
* Nelson City Council asked to up Waimea dam contribution to $10.5m
* Waimea dam contractor hits back at claims over delays in leaked letter
* Another $29m cost overrun flows for Waimea Community Dam project

Martin De Ruyter/Stuff
Councillor David Ogilvie says he hasnt seen a breakdown for the $11.2m.

Stuff asked the elected members whether they had received a breakdown of the $11.2m. All but mayor Tim King and deputy mayor Stuart Bryant responded. Heres a precis of those responses:

Councillor David Ogilvie​


He said he had not seen a breakdown for the $11.2 million.

My take on this is that it is a private issue WWL is negotiating with the NZ Government, Ogilvie said. I expect the Covid claim will be scrutinised by the relevant Government department and paid out according to their assessment.

Until there was a detailed response from the Government, Im assuming that WWL/Mike Scott can comment only in the generalities that he has made to you and to the council.

A response from the Government was key while the arrangement between the Tasman and Nelson councils being agreed and satisfied would give comfort also.

MARTIN DE RUYTER/Stuff
Councillor Trindi Walker says the precise costs incurred during the Covid-19 suspension period must surely have been quantified by now.

Councillor Trindi Walker​


She said the generalised analysis for the $11.2m did not provide clarity. The precise costs incurred during the suspension period must surely have been quantified by now, she said by way of example.

Euphemistic assurances that company and time costs already incurred or are imminent do not inspire confidence that the project team have the ability to deliver on time and to contracted cost, Walker said.

In the interests of confidence that the project was being well managed, the balance of $17.8m required a detailed analysis. Specific detail and explanations are required.

Councillor Chris Hill​


He said elected members were able to ask a range of questions during a confidential session with Waimea Water.

This included clarifying what was included in the Covid-19 costs, Hill said. I am comfortable at this stage with the information I have been presented regarding Covid-19 costs and am not surprised that these would be significant.

Martin De Ruyter/Stuff
Councillor Chris Hill says elected members were able to ask a range of questions during a confidential session with Waimea Water.

Councillor Barry Dowler​


He believed elected members had been given the appropriate information at the confidential meeting.

Councillor Dana Wensley​


She was satisfied elected members had the opportunity to ask questions in relation to the Covid costs and received answers that are as detailed as appropriate in this current climate.

Due to the commercial sensitivity of the information, it would not be possible to disclose further breakdown to the media, however, we have been provided with a high-level breakdown in the confidential meetings we have had with Waimea Water.

Councillor Christeen Mackenzie​


She said she did not have any information she could share other than what has been presented in the documents already in the public arena.

I understand that some of these matters have a degree of commercial sensitivity to them as they may come down to negotiation they are not necessarily black and white, Mackenzie said.

MARTIN DE RUYTER/Stuff
Councillor Christeen Mackenzie says she doesnt have any information she can share other than what has been presented in the documents already in the public arena.

Councillor Trevor Tuffnell​


He said he had not received a breakdown of the $11.2m.

People need to remember that TDC is not building this dam. It is being constructed by Waimea Water Ltd, Tuffnell said. However, my take is that the figure of $11.2m is a broad-brush figure that can be taken as an indication of further increase costs ... that could arise.

Councillor Mark Greening​


He said that unfortunately, he was unable to discuss anything in-committee, which may compromise ongoing negotiations, so cannot add anything more.

Sadly, a history of ever-increasing forecasts ... is not very reassuring for the public, especially given how far we have to go till completion, and how much uncertainty still remains, Greening said.

As far as I am concerned, the dam has played out as I expected, and why I did not support it and the funding arrangements wrapped around it.

MARTIN DE RUYTER/Stuff
Councillor Anne Turley says elected members have been repeatedly told a details of the costs they were sensitive and unavailable.

Councillor Anne Turley​


She said no breakdown had been provided in spite of being requested by some councillors.

We have been repeatedly told they were sensitive and unavailable although some of the costs were known, Turley said. However, Mike Scott said he was not prepared to disclose them at the times of asking.

Councillor Celia Butler​


She said she had no more information on the breakdown of the $11.2m and did not have a problem with Mike Scotts answer on the breakdown ... as he is quite right in that, like many other situations, many of the indirect costs are still in the future.

As a general comment, I think the focus as regards the debt needs to stay on the original voting by council to go ahead with what were consistently unrealistic costings, rather than on the engineering of the project itself, Butler said.

CHERIE SIVIGNON/STUFF
Councillor Celia Butler says she believes the focus as regards the debt needs to stay on the original voting by council to go ahead with what were consistently unrealistic costings.

Councillor Kit Maling​


He said he had not received in open meeting the details of the cost.

I am disappointed in the cost overrun as we put so much effort in trying to get the cost estimates correct, Maling said.

MARTIN DE RUYTER/STUFF
The cost of the Waimea Community Dam project increases again by an estimated $29 million. Video first published on February 25, 2021.

Councillor Dean McNamara​


He said he had not received a breakdown of the $11.2m in any detail.

I think it is imperative that we scrutinise the claims that are being made, McNamara said. We were told that there was only $9m of a $104m dam that was not a fixed price.

There needed to be more accountability into how the project got to its new higher forecast cost and how money is being spent moving forward, he said.

Source
 

Our Partner

Top