Waterworks budget blows out
TWEED'S new $62 million waterworks at Bray Park in Murwillumbah has sprung a massive leak - financially.
A massive blow-out in construction costs has seen several millions dollars of Tweed ratepayers money gushing away.
Former mayor and local businessman Warren Polglase expressed alarm at this week's council meeting about the three-million cost blow-out so far which is expected to swell to more than $4 million by the time the water treatment plant is due to be finished in December.
Council staff however insist the variations are minor. They say that, as percentages of the total project, cost the blow-outs are not great and some of the extra costs were caused by requirements that were not foreseen when the tender was let.
The council's Community and Natural Resources director David Oxenham said a special clause allowing for a certain “rise and fall” in costs was industry practice and after that was taken into account “real variations are therefore in the order of $400,000”.
Reed Constructions Australia Pty Ltd, part of the Reed Group specialising in commercial and civil construction projects, won the tender in September 2007 with a price of $62.2 million which was to be largely funded by the council through loans.
“Staff talk in percentages but like everything else in today's environment you have got to question the variations,” Cr Polglase said.
“We are going to be millions over on a $62 million project.
“You have got to be very careful you have covered all you bases when you put a programme out to tender.
“I'm just concerned where we may finish up.
“The project is not finished yet and there may be other issues come forward.
“I was putting the officers on notice.”
Cr Polglase said councillors had to carefully oversee any cost blowouts with any of its construction projects.
“Everything in the council we do these days are million-dollar projects,” he added. “We have to be more intense on our documentation and on identification of costs before we go out to tender.”
The need to do that he added should be clear after the state government in February sacked the Port Macquarie-Hastings Council for incompetent mishandling of its “Glasshouse” entertainment and convention centre project which saw costs blow out from $6.7 million in 2002 to $41.7 million.
But Cr Polglase said he was confident the cost blowouts on the waterworks would easily be met from the council's water fund which he descried as “extremely buoyant.
Mr Oxenham said the project was progressing well and there had been “a relatively small number of variations on this project considering its size and project value which is a credit to the project management team, design team and head contractor”.
He said $2.6million of the variations to date were covered by the “rise and fall” clause in the contact.
“Our estimate and budget for rise and fall at the time of awarding the contract was $3.5 million. The final rise and fall variation will be below this figure.
“The real variations are thereAmong the cost blowouts listed in a report to the council were:
• $53,554 for to landscape an earth mound after complaints from neighbours about construction noise • $43,462 to reduce the grassed areas around the plant and replace them with landscaping, lowering final maintenance costs
• $11,723 for an extra water main and hydrants for fire-fighting
• $1,913 for hot and cold water to the laboratory
• $1213 to tint the laboratory windows to reduce heat and glare
• $48,335 to truck over 2000 square metres of material away from the construction site.