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Cost of new reservoir for central Wellington goes up by $10m – new price is $68m

omaromo reservoir

Report from RNZ
The Wellington City Council today approved a nearly $10 million increase to the budget for building the Omāroro Reservoir. Councillors agreed unanimously to the decision, which brings the total cost of the project up to $68m.

The new reservoir on a hill between the suburbs of Brooklyn and Mt Cook is considered to be of high significance to the city, and crucial to the city’s resilience in the event of a major earthquake.

Crucially, it would add to the single day’s worth of water storage available to meet demand in the event of a bulk water outage.

“It is absolutely critical,” said Councillor Sean Rush. “This reservoir will provide safe drinking water, it will provide for future growth,” Rush said. It is affordable, [and] there’s not much choice in this regard if we want a future Wellington that is able to provide drinking water to its population, but also the resilience that is needed to ensure that the central city is not closed through a lack of water.”

The price increase of $9.9m is due to an “unforeseen change in seismic standard” which accounts for $8.5m, “delays caused by Covid-19”, which accounts for $1m, and “the difference between the estimate and post-tender price”, which accounts for $400,000.

Councillor Iona Pannett said the rise in cost was disappointing. “This is the second time we’ve come back with a cost increase: there could have been some understanding about what a new seismic standard meant. But we are where we are, and I guess we need to use this as a learning experience.

“We should not be putting preliminary costs in our budget, or at least with a qualifier. This has been part of the problem that as the project has changed or has gone through the different stages of design, the cost has increased.”

Tighter management over the project

Councillors have expressed concern around Wellington Water’s ability to manage the $68m project.

An amendment tabled by Councillor Fleur Fitzsimons, which had unanimous approval, sought to establish greater accountability for Wellington Water, with the council more present in the project’s development.

It means there will be an independent engineer sitting on Wellington Waters’ Major Projects board, which will report back to the council. Additionally, a senior council officer will represent the council on the project’s Steering Group, who will report directly to councillors.

Fitzsimons said the changes were the result of escalating costs since the project was first visualised in 2013, when the budget stood at $17.9m. She said that cost was “controversially high at the time.”

“I still have outstanding concerns about Wellington Water’s ability to manage this project,” she said.

“I do consider there is a much bigger issue here around how Wellington deals with major infrastructure projects. Wellington Water hasn’t done a project of this scale and this magnitude and this cost in the past, and this is no reflection of the individuals in Wellington Water at this time. But we simply can’t have such large scale infrastructure projects reliant on a small number of key individuals. We need a type of modern Ministry of Works, to make sure that Wellington’s major infrastructure projects can be delivered on time and on budget.”

News from WCC
The Wellington City Council today unanimously approved the funding of the massive Omāroro water reservoir to serve central Wellington, the regional hospital and the Newtown area.

The Council’s Strategy and Policy Committee debated the proposal today in light of changes in project scope and increases in estimated costs over more than a decade. The reservoir and associated infrastructure is now expected to cost $68 million. Construction is due to start in August this year.

Mayor Andy Foster says the cost to the Council of the project has risen for a number of reasons. “The scope has grown. This is now wholly a City Council project rather than one shared with the District Health Board, and the reservoir itself is bigger, will be fully undergrounded, and has had to be redesigned to take into account ever-tougher quake-resilience requirements.”

In the meeting Mayor Foster called on the Government to “come to the party” with a significant contribution for the reservoir from its post-pandemic ‘shovel-ready’ infrastructure fund.

Omāroro will be a huge 35 million-litre reservoir to be built on a hillside above Prince of Wales Park, Mt Cook, on Town Belt land. The concrete tank will be built below ground-level and then buried, once completed, to preserve the landscape.

Today’s resolution to approve the funding was moved by Councillor Sean Rush, the Council’s Infrastructure portfolio leader, and seconded by Councillor Iona Pannett.

Cr Rush said Omāroro is a critical infrastructure project – designed to ensure the central city and surrounding inner city suburbs have a water supply especially after a major earthquake. He noted that a break in a main bringing water to the city from the Hutt Valley in 2017 left the city only hours away from being completely without water supply.

“While pipes and reservoirs are generally buried and out of sight, in New Zealand we are beginning to understand the implications of not paying attention to this kind of infrastructure. There are many examples in New Zealand and around the world where failure to invest in pipes and reservoirs has caused social, reputational, environmental and economic damage. Most importantly, without the reservoir the city’s growth will be constrained.”

The committee agreed that the Council’s ‘three waters’ Annual Plan capex budget be maintained at current levels by delaying the proposed replacement of the Moe-i-te-Rā – Bell Road reservoir a short distance away from Omāroro.

Tonia Haskell, acting Chief Executive of Wellington Water, says: “Today’s committee decision represents the culmination of a lot of hard work by many people within Wellington Water and the Council, and among our team of engineering consultants.

“The project to design and install pipework to connect the reservoir to the existing network has gone well, and we’re now looking forward to getting under way on this critical part of the city’s water infrastructure.

“We’ll be in a position to announce shortly who the successful tenderer to build the reservoir is, and one of their first jobs will be to establish links with the community to ensure they’re kept informed about the work programme.”

Mayor Foster adds that an important project issue relates to the need to truck hundreds of thousands of cubic metres of rock and spoil away from the reservoir site as the big hole is dug in the hillside to accommodate the reservoir.

“Councillors have indicated they know of a couple of playing fields around the city that need new fill to end waterlogging in winter – however we’d be interested to hear from land owners or developers who are needing large amounts of fill because it’ll mean we can save money by avoiding tip fees.”

3 comments:

  1. Lindsay, 5. June 2020, 8:51

    It is notable that the city council, in its summary of the decision, fails to mention the concerns about Wellington Water which are detailed in the RNZ report.

     
  2. michael, 5. June 2020, 12:38

    Absolutely agree with your statement Councillor Fitzsimons that “there is a much bigger issue here around how Wellington deals with major infrastructure projects.’ This does not just apply to Wellington Water, but to the WCC as well.

     
  3. Hel, 5. June 2020, 18:39

    Good on Councillor Fitzsimons for attempting to get a bit of oversight. Sadly the time for this was at the front end of the project. Where is the accountability for costs rising from $17.9m to $68m? Why does the reservoir need to be undergrounded? Surely this just equals unnecessary cost. Why was the scope changed with seemingly no understanding of cost implications? That phrase “we are where we are” is code for we have no oversight, are running blind and should continue to expect surprises.

     

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