Whanganui port redevelopment costs escalate - ratepayers given the bill

Whanganui District Council CEO David Langford says the extra funding required for the port will only make up a small part of the total increase in rates. Photo / Bevan Conley

Ratepayers will be footing a $19 million bill as costs escalate at Whanganui District Council’s portion of Te Pūwaha - the city’s port redevelopment project.

Council chief executive David Langford said the money had been added to the council’s budget through debt funding.

It’s set to be paid off over the next 20 to 25 years.

The cost of two major materials used in stage one of the project -concrete and steel - had “gone through the roof”, Langford said.

“Some of the geotechnics have shown the ground being a little softer than was originally planned so they’ve had to thicken up that concrete.”

Stage one involves building a heavy pavement vessel hardstand and concrete structures out over the water to carry Q-West’s 380-tonne capacity mobile boat hoist.

The work is being carried out by Concrete Structures LTD for $13.5m.

Langford said he was confident the council wasn’t overpaying.

“There were multiple companies that bid for it and we got a good-value price, it just reflects current market conditions.

“People at home know that the cost of petrol has gone up. If you’re running diggers, trucks and cranes up and down, those price increases really add to the cost of the project.

“It all adds up. Steel, when it’s imported, comes in on a big ship that’s running on fuel.”

Following updated cost estimates, Langford and Whanganui mayor Andrew Tripe met with then-regional development minister Kiri Allan and Ministry of Business, Innovation and Employment (MBIE) officials in July to ask for additional support.

Originally, the Government provided $12.5m for the council’s part of the work, with a total budget of $24.8m

“We appealed to them and said at the moment, the council is covering all of these extra costs - ‘the ratepayers will be paying for this’,” Langford said.

“They said they wanted to see progress on the project through stage one, then they would reconsider additional funding for the second and third stages in the future.

“Effectively, it was a ‘no for now’.”

Whanganui mayor Andrew Tripe (second from right) breaks ground for stage one of the project with (from left) then-regional development minister Kieran McAnulty, Whanganui Port director Mark Petersen and Te Pūwaha project chairwoman Kahureremoa Aki in September. Photo / Bevan Conley

Tripe said he had inherited a project that was exciting for Whanganui.

It was a chance to take the district “out to the regions, out to New Zealand and out to the world”.

“The Government signed up to be part of it and my view is that they can’t just opt out,” Tripe said.

“All projects [costs] across the country have gone up significantly for lots of good reasons and that was an unintended consequence when this was signed up for.

“It’s the right thing for central government to do - to come on board and prop it up. They need to share some of the pain of the cost increases that have occurred. The burden shouldn’t just be on the ratepayer.”

Former Whanganui MP Steph Lewis said she was aware of the funding shortfall and had been working with Allan and Allan’s successor Kieran McAnulty on a solution.

“Given we were hopeful of reaching one, I would hope the new MP can work with the incoming minister to get something over the line,” Lewis said.

Coalition talks are ongoing between National, New Zealand First and Act.

New Whanganui MP, National’s Carl Bates, said it was too early to comment on what the new government’s position would be on specific issues.

He said he would be raising port funding with the appropriate minister in “due course”.

The extra costs were included in the council’s annual plan consultation document earlier this year.

Langford said the $19m should cover all three stages of the council’s part of Te Pūwaha.

As well as the hardstand, the project will upgrade 450 metres of wharves, develop marine infrastructure and improve dredging capabilities.

In the council’s draft budgets for its long-term plan, the extra funding will result in a 0.6 per cent increase in rates for the next financial year.

“I’m sure there will be people who aren’t happy about it but it’s only a small component of the total increase in rates,” Langford said.

“In the future, I think the community will be pleased the investment was made because of the value those assets will create, through jobs and the boost to our economy.”

Mike Tweed is an assistant news director and multimedia journalist at the Whanganui Chronicle. Since starting in March 2020, he has dabbled in everything from sport to music. At present his focus is local government, primarily the Whanganui District Council.