Confidential funding to help manage Peacocke’s ‘red’ risk
Extra council money was pumped into the Peacocke development last year in light of a “red” risk, but how much and why is being kept secret for commercial reasons.
The additional budget approved in 2023 followed an announcement the year before that inflation and Covid-related costs would push the bill for the new Waikato River bridge in Hamilton up by $20 million.
A report to Thursday’s finance and monitoring committee meeting noted that the Peacocke-related Wairere Drive extension, including the bridge and Whatukooruru Drive, were classified as “orange” risk currently. Orange means the project is significant and being monitored, while red means it also needs a council decision.
The report said the Peacocke programme, in southwest Hamilton, was the highest portfolio risk due to its scale and other issues. The risks were mostly financial and timing related.
Queried this week over the current orange status and reference to managing “red” risk last year, Hamilton City Council said the committee was advised in August of a red risk status being assigned to Whatukooruru Drive, the bridge and surrounding strategic services and transport network.
This reflected the cumulative effects of Covid-19, “extreme” market conditions, high inflation, forecasted cost escalation, material shortages and severe weather.
Subsequently, in September, the council upped the budgets for projects “to restore project contingency” for the Peacocke programme. The amount and what it paid for were considered in a public-excluded part of the council meeting and remained commercially confidential.
“These changes downgraded the risk status to orange to reflect that the situation had improved and there would be ongoing management and monitoring of the known project risks,” infrastructure and assets general manager Andrew Parsons said in a statement. “The value of the construction contracts remain unchanged.”
He said the projects had been assigned an orange status for most of this financial year. “The issues that council staff and contractors continue to work together to address include the ongoing impacts of inflation, supply chain issues and higher than expected price increases of key supplies like diesel.”
A Peacocke update to the full council is due next month. Parsons said it was an exciting year for Peacocke with a new wastewater transfer station coming online soon and the bridge due to be finished by mid-2024.
The council recently highlighted the many smaller bridges in the new $290m Peacocke suburb and said one of its main roads, Whatukooruru Drive, would be a key transport connection from Peacockes Rd in the east to Ōhaupō Rd (State Highway 3) in the west.