Cost may put dam in doubt

Cost always had the potential to sound the death knell for the proposed Waimea dam, near Nelson, and the early build pricing doesn’t augur well for the controversial project.

Tasman mayor Richard Kempthorne yesterday said the price to build the proposed concrete-faced rockfill dam in the Lee Valley was ‘‘higher than expected’’, and indications were that there would be ‘‘significant challenges’’ for it to remain within the estimated cost.

‘‘If the final price is confirmed to be significantly over the estimated cost and no viable option can be found to meet the difference, then the dam is unlikely to go ahead,’’ Kempthorne said.

However, he could not say by how much the early pricing was over the estimate.

‘‘I’m not down into that detail,’’ the mayor said. ‘‘All I know is that whatever the estimate was, it’s looking to be above that.’’

The statement of proposal for funding and governance arrangements for the dam project – which went out for public consultation – lists the budget for the base construction of the dam at ‘‘around $50 million’’, with an additional $13.5m contingency for changes in scope and unexpected costs.

When pressed to provide that early pricing or an indication of how much it was above the estimate, Kempthorne repeated that he did not know, nor did he want to know.

‘‘If I do know and start talking about figures that aren’t confirmed and could change, it’s really unhelpful. I’d be creating an expectation, which I think is the wrong thing to do,’’ he said. ‘‘The project group and the dam office are the ones that are working on this, not us.’’

‘‘If the final price is confirmed to be significantly over the estimated cost and no viable option can be found to meet the difference, then the dam is unlikely to go ahead.’’

Tasman Mayor Richard Kempthorne

The figures would be examined before a final price came before the council in late July or early August, he said.

Kempthorne’s comments come after Tasman District Council issued a media release on the matter, which contained no figures or indication of how much the early pricing was over the estimate.

Asked why the release was issued if no detail was to be provided, Kempthorne said it was to ensure transparency ‘‘rather than say nothing and just work on it’’.

It was possible someone would find out that the early pricing was above the estimate and claim the council had ‘‘tried to hide it’’, the mayor said.

Cr Dean McNamara said councillors were told about the matter shortly before the media release was issued, but were not provided with the early pricing. The Moutere-Waimea Ward councillor said he asked for a range to indicate how far out it might be from the budget. It was not provided.

‘‘I think, like every ratepayer in Tasman – apart from the

mayor – I’d like to know,’’ McNamara said.

‘‘How can I rely on information going forward if they bring the price within scope? What corners will they cut to get it there?’’

Kempthorne said every part of the project that had costs would be examined to determine if those costs were realistic. That process might mean the final price dropped from the early indications.

However, if that final price was ‘‘too far over’’ and no viable option to meet the difference could be found, ‘‘well, it’s going to make it probably impossible to proceed’’.

A potential viable option might be extra funding ‘‘from anywhere’’.

Kempthorne declined to be drawn on whether extra funding might be sought from the council’s likely joint-venture partner, Waimea Irrigators Ltd, or Nelson City Council.

‘‘I’m not going to get into that either, because I can’t,’’ he said. ‘‘It’s just, if there’s a gap, can we bridge that gap from any source possible?’’

TDC engineering services manager Richard Kirby said one price had come from the contractor and another from an independent estimator, ‘‘and we’re trying to reconcile the two’’.

A joint venture of Fulton Hogan and Taylors Contracting was appointed as the preferred contractor for an Early Contractor Involvement process on the dam project, which brings together the client, designer and contractor to complete the final design and pricing.

Kirby admitted he knew the figures, but declined to be drawn on them.