An artist impression of the sludge minimisation plant. File photo. Photo: Supplied / Wellington City Council
Wellington City Councillors have voted to approve an extra $83 million for the completion of its Sludge Minimisation Facility.
Te Whare Wai Para Nuku which is under construction at Moa Point was expected to have to cease construction if the additional budget was not approved.
Last Thursday councillors were told in a briefing that the facility, which is around 65 percent complete, was now forecast to cost between $478-511m.
The increased costs meant the ability to continue to commit contingency budget to the project would cease in September 2025.
The project is primarily funded through the government's Infrastructure Funding and Financing Act with ratepayers levied for up to $400m.
Council officers recommended elected members approve the additional $83m over three years, consisting of $8m funded by the sludge levy and the remaining $75m
initially funded by debt.
To date, council has contributed $36m towards the project and $392m of the IFF funding committed.
The council was advised that if it terminated the project and breached its contractual obligations, The Crown and third parties such as the council's construction partners would be entitled to seek damages.
The council would also incur significant sunk cost with approximately $58m of specialist equipment already purchased and additional costs associated with shutting down the site.
Council officers said the complexity of the project, the high risk initially taken on by council and unexpected costs are all causes that have contributed to the 20 percent blowout.
It's not the first time costs have increased.
The plant was expected to cost $200m in 2021, $400m was set aside for the plant in 2022, with the budget raised to $428m in 2023.
Fiery exchanges around the council table
Councillor Diane Calvert put forward an amendment to get an independent assessment of the project.
She said the council needed to ensure on behalf of the people of Wellington that their money was being governed well.
The amendment was voted down with only seven of the 17 votes in support.
Councillor Diane Calvert. Photo: RNZ / Dom Thomas
Fellow councillor Ben McNulty who seconded the amendment said he wasn't surprised it didn't pass, suggesting whether or not an amendment got through was based on the who brought it to the table.
"This council's going to go out the way it came in with an aversion to providing even a modicum of scrutiny of our projects," he said.
Meanwhile councillor Tony Randle was concerned where the money would come from.
Council officers are still to explore financing and funding options other than debt.
Randle said the council kept running its debt right to the limit by funding more projects.
He said this didn't give them much fall back other than breaking their own rules and exceeding their debt limit.
Councillor Tim Brown who moved the paper said the sludge minimisation facility wasn't like the Town Hall.
"This project has been well managed," he said.
Councillor Iona Pannett who seconded the motion said they couldn't stop the project now.
She said it was the single biggest thing they could do to shift the dial of waste.
Of the councillors, 11 voted in favour of the funding increase while 5 did not.
Those who voted against the funding were Diane Calvert, Ben McNulty, Tony Randle, Ray Chung and Nureddin Abdurahman.
What is the sludge minimisation facility and why is it needed?
The facility will reduce the amount of sewage sludge created through the wastewater treatment process and turn it into a safe, reusable product.
Currently sludge is piped 9km across the city to the Southern Landfill, where some of its water content is taken out and what's left is buried in the landfill.
The project addresses resilience risks as current disposal consents expire in June 2026, when piping sludge to the Southern Landfill will no longer be permitted.
The facility will reduce the volume of sludge created by 80 percent, and reduce carbon emissions by 60 percent.
It will use thermal hydrolysis and digestion and a thermal dryer to process sludge into a safe, non-odorous and stable product.
That product will have the potential to be used productively, including as a soil conditioner and fuel for industrial heat.
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