Arts centre blowout

$750,000 additional costs

Costs for the West Gippsland Arts Centre redevelopment have blown out by more than $750,000.

As the project nears completion, Baw Baw Shire has been hit with a bill for additional works that will cost council $759,000.

Council was notified of the blowout two weeks ago, only a month after arts and culture manager Rob Robson gloated “there have been no cost blowouts.”

Mayor Joe Gauci admitted the news was “really disappointing” and said council was negotiating with the contractor Building Engineering about the increased costs.

Cr Gauci blamed an old building and unforeseen works for the extra costs, admitting the contract’s contingency for extra costs was possibly not high enough.

Council announced in April there would be delays to the planned re-opening because of compulsory fire protection works that had been identified.

Cr Gauci said it was normal procedure for “extras” to be revealed towards the end of a building contract. “We are still working with the builder to make sure it is all valid.”

“It is a typical scenario of a renovation,” he said.

Cr Gauci denied the contract of works was not tight enough to prevent a cost blowout occurring.

He said all contracts contained a contingency for extra works “but it mustn’t have been high enough.” He said the contract was put out to tender and council was confident the price was right.

“What has caught us out was a renovation of a 30-year-old building,” he said.

Cr Gauci said he did not know the specific scope of all the extra works being undertaken.

The additional works will be funded by savings identified by council in its 2017/18 budget. Adopting its 2018/19 budget last week, some councillors said it was disappointing the savings that could have been directed into other much needed projects had to be put into the arts centre.

The $13.4 million project has been funded by $4 million each from the state and federal governments, $4 million council borrowings and $1.15 million from council’s developer contributions plan fund which is listed in this year’s budget.

Cr Gauci said council was only notified two weeks ago of the blowout and Mr Robson’s comment in May was correct at the time.

Cr Gauci said council officers were working through the extra costs with the contractor to ensure they were valid. He said he hoped there would be no more unknown costs during the fit-out of the building.

A media release outlining a project update was issued by council last week, mentioning the $750,000 increased costs in the second last paragraph.

The statement said “throughout the construction period a number of previously unidentified latent issues were discovered. For example, additional fire protection works were required outside of the original scope and the existing internal stairways required modification. Disappointingly, this has resulted in additional costs in the order of up to $750,000.”

All major internal structure works have been completed and the focus is now on the fit-out and finishing works.

Cr Gauci said the works were on track for practical completion in August and handover to council in September.

“The project is really starting to take shape now with all internal concreting finished, installation of the fly tower structural steel and completion of the level four roof. There is also steady progress on finishing works such as plaster and painting in the lower lobbies and auditorium.

“Next stages include theatre works, further finishing works such as joinery, fit-outs, painting and landscaping around the new forecourt area.

“Once the physical works wrap up in August, the building will undergo testing, configuration, commissioning and cleaning before contractors hand the keys back to us - a moment we’re all really looking forward to,” he said.

The Gazette asked council for a breakdown of where the additional costs had occurred, but this information had not been provided by the time of deadline.