A dispute between the Waimea dam operator and the joint venture construction contractor is the reason behind the increase. Photo / Tim Cuff
The total cost of the Waimea community dam has climbed to $207.5 million, up $1m since July, but more costs are still approaching.
An adjudication decision revealed in July favoured Fulton Hogan and Taylors Contracting, the joint venture construction contractor, which then raised the cost of the dam by $8.3m, from $198.2m to $206.5m.
The cost relating to that adjudication decision have since crept up again, adding $1m to the forecast cost.
The increase will be funded by loans and equity.
However, matters raised in adjudication, along with others, are set to be relitigated under arbitration provisions in the contract between Waimea Water Limited and the joint venture contractor.
It is estimated to cost around $3m.
That $3m isn’t factored into the revised $207.5m price tag. It is expected to be the cost of preparing for and engaging in the arbitration process.
Funding for the potential additional cost is being negotiated between the joint venture partners.
The joint venture contractor has advised that it will present a series of claims for additional costs, with the last claim expected to have been filed on Friday.
Waimea Water Limited, the council-controlled organisation that owns and operates the dam on behalf of Tasman District Council and Waimea Irrigators Limited, then has until November 1 to consider those claims and to file its own response.
Elected members were presented with the forecast cost increase last Thursday.
When asked by councillor Mark Greening what the expected cost of the contracting dispute was, the council’s chief financial officer Mike Drummond said he was unable to disclose the contents of the claims.
“They’re subject to confidentiality and further negotiation.”
The dam has also met all of its resource consent obligations and will be considered fully operational as of Monday, which means new water-take provisions will also take effect.
The council is recommending that consent holders review their consent conditions to understand what the change means for them going forward, particularly around water take volumes, rationing and cease-take requirements.
Broadly speaking, “the ability of non-affiliated consent holders to take water will be restricted, and the water augmentation will flow through to those who are affiliated in regard to the dam,” Drummond said.
Full testing and certifying of the dam’s mechanical and electrical control components still needs to take place before the dam is fully commissioned.
The 13 million cubic metres of water held in the dam’s reservoir can mitigate the impact of a drought greater than a one-in-50-year event.
The flow from the dam will help recharge aquifers to ease pressure on the aquifers caused by water takes during the drier summer months.
Water has already been flowing from the dam through a smaller dispersing valve since March, supplementing the flow over the spillway.
The combined flow averted severe water restrictions that many Tasman producers and residents were under earlier in the year.
- Local Democracy Reporting is local body journalism co-funded by RNZ and NZ On Air.
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