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Depot costs continue upward trend

At yesterday’s council meeting, reports to council show that estimated costs to construct the depot upon the site of the former South Grafton sewerage treatment plant (STP) at Tyson Street are almost $21.5million.
In February this year, the Independent reported that the overall cost of the project, including the site’s remediation, was an estimated $18,435,500.
The remediation cost estimate is $7,146,791; the estimated cost for depot’s construction is $14,340,579.
The report on the depot’s construction advised councillors: “…since the last report to council works have commenced upon the construction of the workshop, and the stores and administration buildings.
“Currently the contractor is working a 6 day week in order to combat project delays.”
Delays and associated costs have been attributed to the discovery of rock in the south eastern corner, where footings were dug for a retaining wall.
“The delays and additional machinery required to date has time and cost penalties under the contract,” the report to council stated.
Striking more rock is not likely to be a factor in the future, however, as “the remaining works are mostly above ground”.
The remediation of a portion of “unsuitable ground”, associated with the former STP, and the encountering of groundwater added further to overall costs.
“Similar to the rock there has been time and cost impacts associated with this material [and the groundwater],” the report to council stated.
Further “cost implications” are associated with Essential Energy (EE) requirements above what was “originally specified”, due to EE changing its standards “from when the initial design was done, over two years ago”.
These time delays are likely to have a knock-on effect: “Several subcontractors have raised claims with the principle contractor of price escalation due to the delay in the works (as a result of the remediation) from when they provided their initial quotations,” the report to council stated.
“These claims will be assessed as they arise and validated through Council’s Quantity Surveyor for market accuracy.”
According to the project’s budget analysis (not including the STP site remediation), the costs so far “outside the contract” have increased by $1,549,892; from $12,790,687 to $ 14,340,579.
The report to council advises: “Including the forecast costs, the project remains within the allocated budget. However, it is important to note that only $30,045 of the project contingency remains and that the vast majority of the contingency has been utilised in dealing with ground works and associated ground conditions.”

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