An artist impression of the sludge minimisation plant. (File photo) Photo: Supplied / Wellington City Council
Wellington City Council's sludge minimisation plant could blow out to more than half-a-billion dollars.
The sludge minimisation facility is under construction at Moa Point, with expected completion next year.
Initially, $400 million was raised for the plant, with ratepayers levied to fund it.
Councillors were told on Thursday morning that the project was now forecast to cost $478-$511 million.
Chief infrastructure officer Jenny Chetwynd said $511 million was a conservative figure and the council had taken on considerable risk with the project, which was now coming to fruition.
She said, between March and June this year, financial reporting began to indicate that the current budget may not get them to the end of the project. Council was first alerted of this in June and given a further heads up in August.
Chetwynd said the complexity of the site - coupled with incomplete design at the start of the project, when the contract was signed - along with the risk the council had taken on and the complexity of the commissioning process were all "banging in together" and "manifesting in the increased costs".
Delays and changes in design had also extended the timeframes, and added more cost into the process.
The primary areas of cost changes were those that weren't initially factored in, design changes and delays, and a larger budget needed for commissioning.
The commissioning budget alone had expanded from $2.5m to $20m.
Chetwynd said they now better understood the commissioning process and how complex it was.
She said the sludge minimisation plant was a complex project - the first of its kind in New Zealand - and was also set up in a challenging market in 2022.
Council will be asked next week to approval additional budget for the project.
General counsel Beth Keightley advised councillors that, if they chose not to approve the additional $83 million, there would be "significant implications", as the council was contractually committed to completing the project in their IFF contracts and could face significant damages.
The site might also have to be shut down and they would still have to deal with sludge at a significant cost.
How the $83m would be funded was still being considered.
Following the project, there will be a post-project review.
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