Spending to be monitored

John Mackie
John Mackie
Fast-tracked spending of an extra $11.6 million for the Tahuna wastewater treatment plant was approved yesterday, but the Dunedin City Council has promised to "closely monitor" the situation.

Cr Syd Brown and his colleagues at an infrastructure services committee meeting yesterday received a financial breakdown of the spending, which Cr Brown requested.

The committee accepted staff promises the changes would not increase the overall spend, but ordered that cash flow be closely monitored by the project control group, and reported regularly to the committee.

The main contract for the work, worth $32.1 million, was awarded to UGL New Zealand on November 1.

Council staff last week unveiled the proposal to bring forward up to $11.6 million in loans - increasing capital spending on the project for this financial year to $30.1 million - to complete stage two of the Tahuna project by September 1 next year.

The project had slipped behind schedule in recent months, but needed to be completed by the time an existing Otago Regional Council consent expired on September 1.

Updated figures yesterday showed the proposed change could add up to $1.45 million to loan servicing costs in the 2011-12 financial year, and a further $937,000 in 2012-13.

But financial planner Carolyn Howard said overall payments made on loans over their 20-year life would be no different.

Water and waste services manager John Mackie noted the figures showed $1.8 million of additional costs that would be avoided by contractors being on the site for a shorter period, and the advantages of meeting consent deadlines.

Cr Brown said he was confident from the figures provided the brought-forward spend would be "cost neutral" to the council.

He asked Tahuna upgrade project manager Brian Turner if he was confident he could control costs on the project, which did not have a guaranteed maximum price contract.

Mr Turner said he was "quite hard-minded" in terms of any variations to the budget.

"We've got to have people there who don't give things away.

"We will achieve what's been stated".

The committee voted to approve the timing change for the spending.

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