During an extraordinary council meeting on Tuesday, council’s strategic asset planning manager Russell Pearson gave councillors an update on the forecasted costs for the first stage of the City Streets project.
Since December last year, contractors had been working on Esk and Don Sts as part of the first stage of council’s $28 million streetscape project to develop its CBD streets and footpaths.
The aim of the project was to increase foot traffic and encourage people to stay longer.
Council earlier stated in its long-term plan that stage one was forecast to cost $17.7 million, which was within the $18.7 million allocated for this work.
However, Mr Pearson’s report yesterday said the cost was now estimated to be $20.74 million "or 10% above the project budget."
"One of the key issues we struck, obviously, [was] inflation and Covid [that] had been causing quite a bit disruption to our project,’" he said.
The report said the project was tracking approximately 17% over budget but changes outside the Invercargill Centre Limited’s block allowed $460,000 to be diverted to the budget shortfall.
"Following workshopping, the forecast to complete the project has been reduced to approximately $20.74 million or 10% above the allocated budget."
"Approximately one third of that reduction comes from reallocation of the shelter budget."
At the meeting, Cr Ian Pottinger queried if stage two, which was the work at Kelvin and Esk St near the council building, was estimated to be on budget, at $14 million.
Infrastucture manager Erin Moogan said it was.
"We are not looking to increase the budget of the project," she said.
While there were still four months for the completion of stage one, Mayor Nobby Clark believed council should pause the project when this part of the work was completed.
Speaking on Tuesday, he said he had a report which stated the increase in cost could be even bigger than expected.
He believed council should pause stage two to avoid a bigger rates increase.
"We faced a significant rate increases this year and unless we call back our expenditure, we will see ourselves in the same position next year."
"I personally would pause for three years the stage two, see what our finances are like three years from now. We [would] have the museum done by then, and inflation will drop back."
