Huge budget blowout on arterial road
Queenstown's mini-bypass will cost ratepayers another $20 million, bringing the grand total close to an eye-watering $109m.
Councillors last month approved the budget increase of $20.61m for the Queenstown Arterial Stage 1 project, which connects Frankton Road to Gorge Road, via Melbourne Street and Henry St.
The spiralling costs are blamed on local labour shortages, inflation and ongoing global supply chain pressures.
The project is being funded by Queenstown Lakes District Council (QLDC) and Central Government, which is stumping up $50 million of the total, through its pandemic-inspired Infrastructure Reference Group Fund.
Back in October, QLDC budgeted for its contribution to be around $38 million, with a total of $88.23m. But the latest $20.61m increase means QLDC will be paying roughly half the overall costs, an estimated net cost of almost $59m.
QLDC chief executive Mike Theelen says councillors voted to support the move at a public excluded session (allowing free and frank discussion of commercially sensitive information) in late April.
Theelen says such increases are "not uncommon for a project of this scale, duration and scope".
And it could get worse, he says, as challenges of managing such projects since the pandemic remain.
"Ongoing cost increases, labour shortages, shipping delays and capacity issues at a local, national and global level are well-publicised," Theelen says.
"Whilst these have been factored into the latest forecast and we have contingencies in place, it’s impossible to rule out further increases given the state of the global economy and sometimes unforeseen conditions below street level."
The project is being delivered by Kā Huanui a Tāhuna (the Whakatipu Transport Programme Alliance) comprising QLDC, Waka Kotahi NZ Transport Agency, Beca, Downer, Fulton Hogan and WSP.
"The Alliance is actively looking at ways to mitigate cost increases as it works to deliver this significant infrastructure project that will ultimately remove traffic from Stanley Street to enable more public transport and more open spaces in the town centre for people to enjoy."
The Kā Huanui a Tāhuna team is upgrading underground services along the Stage 1 route and constructing large retaining walls to create the new link between Melbourne and Henry Streets.
Gorge Road, which has been closed between Stanley and Weaver Street since October last year, is on track to re-open temporarily for the busy ski season on 16 June.
It will then close again in October for the completion of works which is expected just before Christmas.
Stage 1 as a whole is on track to be completed by the end of 2024.
Full details on the project are available on the QLDC website.
