Dam build delay lengthens

The Waimea dam project is now six months behind schedule and its already boosted budget may need another increase to cover the fallout from the Covid-19 lockdown.

‘‘Covid-19 was a real hard kick in the guts,’’ Waimea Water Ltd chief executive Mike Scott this week told a Tasman District Council meeting. ‘‘It’s really hit us by two months and counting.’’

Waimea Water Ltd (WWL) is a council controlled organisation responsible for managing the construction, operation and maintenance of the dam in the Lee Valley, about 36km south-east of Nelson. WWL is a joint venture between majority shareholder Tasman District Council and Waimea Irrigators Ltd.

The forecast build cost for the dam was increased by $25 million to $129.4m in February after some rock earmarked for the drainage zones was found to be unsuitable. The cost of sourcing suitable rock makes up the bulk of the forecast overrun.

Scott told councillors that Waimea Water had an ambitious construction programme before the coronavirus pandemic.

‘‘Before Covid-19, we saw ourselves between two and four months behind,’’ he said. ‘‘We did see the late March-April period as a real opportunity to catch up. We lost that ability to catch up [because of the lockdown], which was unfortunate, and we now see ourselves as six months behind.’’

A constrained international supply chain could also push out the completion date. The delay meant the dam would not be operational for the 2021-22 summer.

However, Waimea Water and the contractor – a consortium of Fulton Hogan and Taylors Contracting – were putting ‘‘a lot of energy’’ into trying to expedite the build such as seeking additional workers.

‘‘One of the constraints before Covid-19 was labour,’’ Scott said. ‘‘We just could not get skilled labour. Maybe, in the post-Covid-19 world there is some skilled labour.’’

About $50m had been spent. Extra costs from lockdown were still to be determined.

‘‘As of today, what we see today, what we know today, we still hold the view that our most reasonable estimate is $129.4m,’’ Scott said.

However, in response to questions by several councillors, Scott said the Covid-19 costs may stretch that budget ‘‘and there’s a big range’’.

Councillor Mark Greening asked for details of the range but Scott said that information was ‘‘commercially sensitive’’.

Greening asked if the council could go behind closed doors to hear the information but Scott said more legal work was needed.

‘‘I think, it would be best if we come back to you.’’

Mayor Tim King said people were ‘‘tiptoeing around’’ legal and contractual issues.

‘‘We could go into committee,’’ King said. ‘‘The question is: are we going to get any more information in committee than you are prepared to give us here today?’’

Waimea Water board chairman David Wright said he and Scott were not in a position yet ‘‘to share anything more specific around what may or may not be that range’’.