The initial budget started at $3.5 million in 2020 but that had ballooned to $11 million now.
Environment Southland chief executive Wilma Falconer said the council would be exploring borrowing and third party funding options to repay the debt over a minimum of 25 years, but at this stage were unable to say how much the debt would be impacting rates until the project was completed and all final costs were known.
"There would be public consultation before June 2024 to establish how debt repayment will be managed over the life of the asset," she said.
ES chairman Nicol Horrell said the council was surprised by the escalated budget but thought it was more indicative of the world we were all presently living in.
"The world has changed and people are putting contingencies in because they don’t know what it is going to cost to get materials for things. It’s certainly higher than we would’ve liked or expected."
The council had originally aimed to replace the 70-year-old Invercargill pumping station with a like-for-like building, he said.
In 2020, the council received a $2.25 million government funding grant for the project based on installing axial flow pumps and a modest pump house, and had an estimated total $3.5 million budget.
But changes to the National Environmental Standards for Freshwater (NES) later in 2020 meant the intended axial flow pumps would be non-compliant.
NES compliant 16m-long Archimedes screw pumps, each weighing 22.5tonnes, were ordered from the Netherlands in 2021.
The screw pumps, which operate in tandem, allow fish safe passage through the drainage network and increase pumping capacity by 40%.
Mr Horrell said it was important to ensure any installation was compliant and environmentally friendly.
More costs were added to the project after the original pump building was unable to accommodate the new pumps — escalating the budget to $6.5million, which was budgeted for in the 2021/22 annual plan.
Then an engineering assessment identified the new pump site needed specific preparation, adding even more costs.
The heated construction market and labour market resulted in the council’s budget blowing out to $11 million; exceeding the $6.5 million published in the 2022/23 Annual Plan by $4.5 million.
Mr Horrell said the land where the building would be placed came with some specific engineering challenges because of the boggy ground surrounding the site.
Ms Falconer said the contract would provide Invercargill, Lake Hawkins residents and the Invercargill airport with protection from inundation for the next 50 years.
"The existing building and pumps are now at the end of their life and there is increased risk of failure. This pump station is critical to the 116 properties in the immediate area and is a lifeline for the airport, supporting 320,000 passengers plus freight each year."
The new pumping station will be constructed alongside the existing structure by Fulton Hogan and is expected to be fully commissioned in mid-2023.
ES is not intending to close Stead St during the construction period.
By: Toni McDonald
