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Council holds out hope for cost recoveries

 

Carterton District Council’s [CDC] Wastewater Treatment Ponds project is tracking to run $340,000 over budget, contingency inclusive.
But, if cost recoveries from a removed contractor go in CDC’s favour, the project will track right on the council’s recent budget of $14.61 million.
CDC’s Wastewater Treatment Ponds project has had its fair share of controversy, with the main contractor removed last year after repeated delays and the discovery of damage to the lining of three new ponds.
The project also made headlines after a botched mudfish relocation exercise where almost 1000 fish were estimated to have died, likely due to poor habitat.
The budget has also been under scrutiny, with the council previously projecting a $6m budget, then $12m.
CDC Chief executive Geoff Hamilton’s recent report to council, states the total project budget is about $14.61m, and the total forecast spend was $14.95m.
“However, within the total forecast budget, there are several items which may not eventuate, as well as the likelihood of recovering significant costs from [contractor] CHB Earthmovers,” Hamilton said.
This included $428k in potential extension of time costs, which council may be required to pay and has been factored into the forecast, legal fees of $200k in the forecast, which may not be required, about $320k in costs related to remedial work on the liner, which are expected to be recovered, and retentions of $125k, which the council expects to keep, reducing the amount to be paid.
Hamilton also stated an estimated project completion date had been set for the end of June 2023.
Previous estimates, prior to the contractor being removed, put the completion at June 2021.
Hamilton said council management would continue to provide updates to elected members and the public as the project is finalised and more certainty exists around contingencies.
At a recent Policy and Projects Committee meeting, Hamilton said the council had removed the contractor from the site and maintained the contract.
“This allowed us to complete the works that they contracted for. Even though we are completing the works, they are able to fund the completion, also, they were liable, and are liable, for the cost of repairs to the liner,” Hamilton said.
He said the contract would reach practical completion when the reservoirs come into service in June next year.
“That will be the point in time when we will be able to understand all of the costs in order to complete the work CHB would have done and fix the work they damaged.
“We can use that as our claim against CHB for remedies, but it would have to be after that date, when we have reached practical completion, and we plan to reach that in June next year.”
CHB Earthmovers was contacted for comment.
Carterton District Council meets today.
-NZLDR
Public Interest Journalism funded through NZ On Air

Emily Ireland
Emily Ireland
Emily Ireland is Wairarapa’s Local Democracy Reporter, a Public Interest Journalism role funded through NZ On Air. Emily has worked at the Wairarapa Times-Age for seven years and has a keen interest in council decision-making and transparency.

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