24 November, 2005

Council Project Hit By Increased Construction Costs

Escalating construction costs have impacted on the budget for two digesters at the Christchurch Waste Water Treatment Plant.

Council today approved additional capital funding of $8.59 million for the project.

Three tender prices were received for the project, the lowest of which was $15.52 million, giving an overall project cost of $18.59 million. The capital cost for this project was originally estimated at $6.2 million in 2002 and this was re-evaluated at $10 million in December 2004, in conjunction with several other projects.

General Manager City Environment Jane Parfitt says the increase reflects the ongoing difficulties that the Council is experiencing in reconciling budgeted costs with the current soaring costs in the construction industry.

"The construction industry worldwide is booming and demand has seen prices escalate for materials such as cement and steel," Mrs Parfitt says.

"We are not alone in this situation as throughout New Zealand capital project costs, in both local Government and private enterprise, are exceeding budget estimates."

The additional digester capacity is required to meet the increasing demand at the plant. The digesters have been sized to meet predicted loads and flows through to 2026. The current digesters are periodically overloaded and this can cause process and odour problems. The additional digester capacity will increase biogas production which will allow for some additional generation of electricity on the site.

"The additional capacity could not be delayed without significant risk of partial process failure at the treatment plant," Mrs Parfitt says.

ENDS

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