Early indications of huge blowout in the Waimea Dam price call into question the entire dam process to date.
Today, Councillors were called into an extraordinary briefing session ahead of the Community Development Meeting where we were informed of a press release going out within minutes stating that there are “significant challenges” with the early dam pricing to achieve a within budget price.
I asked for an indication of what aspects of the dam they had an indication were running over budget – they could not tell me.
I asked what kind of budget blowout range we are talking. Again, they were unable to tell me.
I stressed that they felt it important enough to call an extraordinary briefing and go out with a press release and yet they are telling me that they have no idea of what kind of early indication budget blow out we are talking about. They confirmed that was the case.
We were told that the press release was to address the fact that there is already information “on the street” about the dam budget being insufficient. This is interesting given the ridiculous conditions that they suggest at the last council meeting be imposed on Councillors wishing to view the dam Term Sheets with our partners. It also supports the Councillor’s decision not to accept personal liability for the leaking of information when this dam is already full of leaks. Leaks that could not have come from Councillors as we are not allowed to know any information at all around the current pricing of the dam.
The fact that staff were unwilling to suggest any kind of price range leaves one to speculate that is so far away from the budgeted figure that there is no likelihood we are going to be able to achieve a dam. If that is the case then there are some serious questions that need to be answered.
Do council staff have the experience to manage a project of this magnitude?
When the current members of the Council table wished to revisit the “plan B” options a revised estimate of each project was produced. Without exception every other option had the budget increased by 2, 3, even 4 times the budgets originally presented to council. It turns out that the projects were not fully scoped and there was an array of reasons why the budgets had to be revised to be accurate in the current market.
I asked for a similar review of the Waimea Community Dam as my own assessment, and the advice that I was receiving from experts in the fields of forestry, earthmoving, and even dam building was that aspects of the budget were seriously deficient. The assurance that I was given by staff on numerous occasions was that we are confident that the pricings were accurate. Various aspects of the project along the way we were told were coming in within the budget range. We have been repeatedly assured by our staff, and by the likes of John Palmer, that this budget was so robust we could be 95% sure it will come in on budget.
Why this is important is because Council has elected to continue spending money on the Dam project based on this advice. I am sure it was this advice that the Mayor relied on when he used his casting vote to increase the dam budget by $3million dollars. It was also on the back of this information that the Council elected to proceed with the early contractor engagement process (ECI) to get a finalized quote for the dam – also costing the Tasman ratepayers a significant amount of money.
If the dam fails to proceed due to excessive budget blowouts I feel somewhat responsible as a Councillor. I have failed in my role as governance to monitor the process adequately before we ended up with a $10million bill for a dam project that was not affordable. However, I have been asking questions for the past 2 years, I just have not been getting all the information to make a better-informed decision.
When the irrigators were telling us that they could not afford their share, and urban water users and ratepayers who already paying some of the highest rates in the country could not afford more than their share, I questioned how we could proceed with the project. I should have insisted more strongly that we revisit the viability of the dam.
When I was repeatedly told that we had sufficient budget for aspects of the dam that were clearly under budgeted I should have insisted on further investigation. When I was told that I could not view Term Sheets or the Schedule of Risk I should have insisted as governance that I have a right to view such crucial information before making decisions around the dam.
Alarm bells should have gone off when the Mayor insisted that he did not want to see Term Sheets or the Schedule of Risk. As someone who reserves the right to vote twice (despite my attempt to remove that right) the Mayor should be extra well informed on significant projects that he is voting on, and yet he does not even want to know how much the early quote indication is over budget (as quoted here). Questions have been raised in the community if he is up to the task and I am struggling to find evidence to suggest that he is. Certainly, Mayor Kempthorne’s current approach of burying his head in the sand at every given opportunity does not suggest he is capable of leading significant projects.
Now that we have been given no indication of how much the budget is looking likely to blow out by we are left in the position of assuming that it is as stated in the press release a “significant challenge.” My next line of questioning is how can we trust any figures that we are presented with in the future. If they manage to get the price within budget (or close to it) I will be wondering what corners have been cut to achieve it? What risks have we taken onboard that will result in huge overrun expenditure that the ratepayer is solely liable for because the irrigators have capped their liability?
If the initial estimate was only marginally overbudget you could imagine that things could be tweaked to bring the quote into alignment with the budget. However, a “significant” (staff wording) gap can only be closed by taking shortcuts or a complete redesign. We only have to look across the boundary at the Stoke Greenmeadows project to see where corner cutting and budget skimping leaves a project
I have to say that I have gone from dam sceptical to thinking that those members of the community who have been calling for a judicial review into the process may indeed be barking up the right tree. Ratepayers have a right to know how 10 million dollars of their money could possibly have been wasted on a project that had no way forward. Land acquisition is still far from a certainty, the initial budget was apparently woefully inadequate, consultation and deliberation was dubious at best, what else is yet to be shaken out of the tree?
Like all other ratepayers, I will eagerly wait for a council press release to find out what is going on with the dam!