Cost of Wellington Water treatment plant upgrade rises to almost $90m

5:29 am on 1 March 2024
Photo of Te Mārua Water Treatment Plant / supplied

Te Mārua Water Treatment Plant Photo: Supplied

The budget for a major Wellington Water treatment plant upgrade has blown out by more than $40 million.

Te Mārua Water Treatment Plant based in Upper Hutt supplies 45 percent of the Wellington region's water.

An upgrade is currently underway to increase the amount of water it can supply from 80 mega litres per day to 140 mega litres per day to deal with issues such as summer shortages and increased population growth.

The budget for the upgraded plant was $44.5m in December 2021.

But due to changes for addressing seismic risk, extra work that needed to be done on old equipment, and inflation, the cost has skyrocketed to $88.3m.

Greater Wellington Regional Council chair Daran Ponter said it was concerning.

"Nobody wants to set out thinking they're paying $40m and find out they're paying $88m."

Ponter said city councils and ratepayers would have to foot the bill.

"I'm aware that Wellington Water have tried to keep the scope down but clearly with an increase like this the water levy that we charge the four metropolitan councils will need to go up to accommodate that."

Wellington Water head of regulatory services Charles Barker said it had been dealing with increased costs.

"Like anyone else building their own home in the last few years, everyone would appreciate since 2021 till now the cost of building materials and labour have significantly increased at an unprecedented rate."

Barker said there were no plans to ask the regional council for more cash.

"All increases in budget have to be justified, and that would be the case for any further expenditure but at this stage there's no intention for asking for any more money."

Barker said because fixing old equipment was added to the scope of the project, he wouldn't call it a "budget blowout".

"That would indicate that the increasing cost was only getting us what we had before."

Civil Contractors New Zealand communications and advocacy manager Fraser May said in mid-2023 members were surveyed about thoughts on project costs.

It found 81 percent of businesses that are involved in civil construction in New Zealand said they had been "significantly impacted by cost escalation and supply chain issues in the past 12 months".

He said international conflicts had had a big impact.

"If we look at the war overseas obviously some of the costs like fuel have been greatly escalated."

Te Mārua Water Treatment Plant upgrade cost increases are being accounted for in Greater Wellington Regional Council's upcoming 2024-25 budget, however, it's subject to final approval in the long-term plan.

The project is one month behind schedule with a completion date of March 2025.

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