Warning light shines as art gallery blowout looms

The Auckland Art Gallery's $121 million upgrade will increase its exhibition space by 75 per cent. Photo / Dean Purcell

An "amber light" has gone on over whether the $121 million upgrade of the Auckland Art Gallery will come in within budget.

Officials responsible for the refurbishment of the 1887 French colonial-style building are being tight-lipped about a possible cost overrun by the time the project opens to the public for the Rugby World Cup.

The project, which includes earthquake proofing the heritage building, will increase exhibition space by 75 per cent to enable more of the gallery's 14,620 art works to be displayed.

Gallery director Chris Saines and Regional Facilities Auckland chief executive John Brockies have both flagged financial pressures as the three-year project nears completion.

Mr Brockies, whose council-controlled organisation has overall responsibility for the project, told Auckland councillors this month that talks were taking place with the contractor, Hawkins Construction, about some unforeseen issues during construction that had resulted in design changes.

"There is a contingency provision within the budget, but the questionmark is will that be adequate to cover all of the possible additional claims that will result from these design changes," he said.

Mr Brockies said the CCO had put up an "amber light" on the project, and was taking professional advice from two independent engineers as to whether the existing contingency would cover the additional costs.

Mr Saines said several issues could lead to a cost overrun, but the hope was to bring the project in on or under budget.

He would not say what the issues were, except it involved things such as variations that came through in the course of a contract and how they were ultimately agreed and settled.

Mr Saines said it looked as if the refurbished building would be handed over to the gallery in stages.

The aim was to open the completed building to the public before the Rugby World Cup tournament, he said.

The $121 million project is being funded by $56.1 million set aside by the former Auckland City Council, a $30 million donation from the Ministry of Culture and Heritage that has grown to $31.5 million with interest and $33.4 million in private donations being raised by the Auckland Art Gallery Foundation.

Arts patron Dame Jenny Gibbs, a foundation trustee and deputy chairwoman of Regional Facilities Auckland, said $19 million of the $33.4 million had been raised.

At the time fundraising began, she said, the world was booming, then the project was held up by two years in the Environment Court.

"By the time we finally got the go-ahead, the global financial crisis was about to hit," she told councillors.

"I'm afraid we were terribly unlucky. We think, in the circumstances, to raise $19 million in this environment is pretty good and we are still working extremely hard on it."

Mr Saines said the remaining $14.4 million of private donations was not needed before the gallery opened in September, but it is unclear how any shortfall could be funded longer-term.

Commenting on a possible cost overrun or bridging a funding gap, a senior council source said: "We are not made of money here at the Auckland Council."

WHO'S PAYING

Ratepayers $56.1m
Ministry of Culture& Heritage $31.5m
Private donations $33.4m
Total $121m