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Infrastructure projects incur ‘significant’ extra costs

Image Caption: Construction of the Argyle Street car park is nearing completion; however, it has come at a significantly higher cost than the project’s original budget. Image: Geoff Helisma

Reports to last week’s Clarence Valley Council (CVC) meeting have revealed that several of its infrastructure projects are costing more than expected Argyle street car park

The budget for the construction of the Argyle Street car park, to service the proposed supermarket to be constructed in nearby Cameron Park, has increased by $259,084 to $1,252,930 (ex GST).
The report to council stated that since the last report in July, “significant costs have been incurred as a result of having to excavate to 700mm and replace with cobble the entire site due to latent soft soil conditions”.

“The risk of encountering soft soils during the construction of the site was identified as a risk during the tender process and was specifically excluded from the tendered price,” the report states.
“The July report to Council indicated that the soft soils were contained to approximately one third of the site but further tests indicated that the entire site required excavation and treatment.”

The car park is expected to be completed by Wednesday October 18.

The extra $259,084 follows the approval of an additional $157,373 in July for other variations outside of the accepted tender.

The report to council recommends that the $259,084 be sourced from the Maclean & District Improvements Reserve, which, if adopted by councillors yesterday (after the Independent’s print deadline), will be reduced to $546,325.

“In accordance with the land swap agreement with Chums, the Argyle Street carpark will be transferred to Council when the carpark construction is completed,” the report to council states.

South Grafton depot.
The report to yesterday’s council meeting states that the cost of remediating the site has increased by $294,407 to $7,441,198, since the report to the August council meeting.
“A large portion of the increase is related to the additional earthworks volumes required to provide the site profile as a result of the site remediation,” the report to council states.

“The other costs are attributed to finalisation of claims that have been submitted.”

The new depot’s total cost of $14,245,579 (not including the remediation costs) is reported to include $1,436,529 of “construction costs outside the contract”.

Meanwhile, staff have responded to councillors’ August resolution, to “investigate cost savings possibilities in the completion” of the depot and office rationalisation project.
The reported savings amount to “$57,500 with potential additional saving to be confirmed following evaluation of the furniture specification”.

As far as the actual contract to construct the depot is concerned, it has expanded to $12,820,732, which includes the awarded contract sum: of $11,986,985 plus variations of $822,065.
The report to council states: “including the forecast costs, the project remains within the allocated budget.

“However, it is important to note that only $11,682 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.”

Remediation of Lower Clarence STPs
How much it ends up costing to remediate the three former sewerage treatment plants (STPs) at Maclean, Townsend and Ilarwill hinges on whether or not the EPA (Environment Protection Authority) allows the reuse of bio-solids.

At the November 2016 meeting, councillors adopted a revised budget of $1.95million for the job, up by $275,200, to replace funding withdrawn by the NSW Government. The total budget for the work is $2.12million; the accepted tender is $1,595,388 (including GST).

The tender allows for the disposal of 50 cubic metres of contaminated material for each site, “so if the volume required to be disposed off-site exceeds this it will result in the contract sum increasing”, the report to council states.

“Expenditure and commitments to date total $1.735 million, leaving a contingency balance of $215,000.”

Meanwhile CVC has transported 9,000 tonnes of fill from the South Grafton depot project to the Maclean STP, which “represents a potential saving of $181,000 (ex GST)”.

However, the report states: “If the EPA does not approve reuse of biosolids at the Maclean STP site and reuse of the stockpiled material at the Townsend STP site, the material will need to be disposed off site, which may incur additional costs”.