How does a P95 $75.9 million dollar dam blow out to $300 million?
Yes, you heard that right. The Waimea Irrigation Dam is on track to push closer to $300 million than the currently revealed $180 million. Despite the fact that they have been trying to hide increases by dropping aspects of the dam that were part of the original quote and now calling them an extra, there will be no hiding from surprises yet to be revealed according to whispers on the street. So far the most reliable source of information on the dam that I have found. A scenario that you might want to turn your mind to when submitting on the Dam funding proposal in the Long Term Plan.
Consider the staff reports that told us that this was an almost risk-free p95 $75.9 million dollar project. Whenever I asked questions about rising costs in the contractor space, the cost of clearing the reservoir, putting in the roads, stabilising the banks, and the risk of a Clyde Dam leak fiasco I was told about “expert opinion,” “peer review,” “P95” and all the contingencies built-in. The Waimea Water website boasted that this was the “best researched project in the history of TDC.”
There was a slight hiccup when we went out for tender, but nothing that $104 million couldn’t solve. And now we had a “good as fixed price dam” I was told when I ask what certainty there was around this price given that the P95 wasn’t worth the paper it was written on. Only $9 million of the $104 million dollar project wasn’t a fixed price.
When the board of Waimea Water was appointed they investigated the project and came back with a glowing report about how fantastic a job had been done and how they were very confident of delivering the project on time and on budget (despite the extra fees they claimed for their work).
Mike Scott arrives and is full of bravado about how he was the man to deliver the project on time and on budget, and how lucky the region was that the naysayers and short-sighted progress stoppers had not won the day. When quizzed about the lack of bedrock he proudly pointed out all the visible bedrock and said there were no problems.
At the first sign of problems, Mr Scott starts to blame the lack of comprehensive research and how there were a lot unknown unknowns to be contended with. Tasman District Council chief of Engineering produces a report telling Councillors that the Tonkin and Taylor work highlighted all these risks. Interesting that none of these risks were raised in Council Chamber previously when we had a p95 or “good as fixed price” dam.
More problems and more money is required. Once again the staff reports revert to talking about the unknown unknowns and geological risks. Now nobody is to blame because we took the best advice from all our experts. Perhaps our peer review should have been done other than our peers?
Certainly, the community raised all the unknown unknown issues of there being no bedrock on the left-hand embankment, of the P95 not being a P95, and of the costing being $100 million short. Actual dam building experts who offered to cast their eye over the project were politely declined in favour of peer reviews.
All the while Councillors were kept at arm’s length. Councillors were removed from the contract negotiation table. Councillors were forbidden to read Terms Sheets until the eleventh hour. Councillors were shut down when asking questions of staff and experts – a maximum of three questions on thousands of pages of agenda, and we don’t have time to get into that kind of detail. Councillors were also expressly forbidden for standing on the Waimea Water board as spots were reserved for irrigators.
Our “no surprises” policy with Waimea Water Ltd appears to be a case of they don’t tell us anything surprising until they can hide it no longer, rather than a case of there is a hint of an issue so they pre-warn us. Perhaps that is why no Councillors were allowed on the board?
Of course, my information could be wrong and we might not be about to be informed of another blowout that will make the other blowouts look like prematch warmup games? Time will no doubt tell – probably timed to tell just after the Long Term Plan consultation closes?
Not to worry. As the deputy mayor says, in 20 years no body will remember how much the dam blew out by, and all those who voted it through will be remembered as heroes.
Or as the Mayor is currently telling us, not to worry the Government is about to step and take the dam debt off us, along with all our water infrastructure. Of course, councils in good shape will receive a payment for their water infrastructure to spend on other things. It will be interesting to see if we don’t end up with a bill after they take our infrastructure (especially if the dam continues to head toward $300 million).
What the Mayor doesn’t explain quite as well is that this spreading of the cost to a greater rating base after the Three Water reform is unlikely to reduce the burden of debt on the water user at all. One option is that we are grouped in with Wellington and the billions of dollars that they are required to spend to bring their services up to date. Or we could be grouped with Christchurch and the West Coast that will have the same unrealistic costs to meet drinking water standards. The truth of the matter is that reticulated water is about to become less affordable here than in Saudi Arabia.
One wonders how many others sitting around the Council chambers have directorships lined up with local earthmoving contractors and orchardists when they depart the scene? I suspect if you follow the money trail it will be a case of “no surprises” there. The incompetence excuse only holds water for so long. A P95 $75.9 million dam does not turn into a $300 million dollar dam because of COVID and unforeseen unknown unknowns. A P95 is statistically robust to accommodate 95% of the unknowns.
Will politicians that were threatening Councillors who voted against the dam be called to account?
What happened to the “hard questions” they were going to ask after the dam blew out from $104 million to $139 million?
How did independent water authorities headed up by ex parliamentary commissioners fund media campaigns against Councillors not voting for the dam? Were they appointed just because they lived across the fence from the Council CEO of the day? Can they maintain their “independence” when they were standing outside of the Council on the day of the final vote handing out vote-for-the-dam buttons and propaganda?
Yes, I think it is time there was an inquiry into how a P95 $75.9 million dollar dam has got to $182 million and is allegedly about to go significantly higher.
Given the fact that we appear to have learned nothing from the Mangawhai Sewage debacle and the lack of early intervention from the Office of the Auditor General to the many pleas from the community, I do not doubt that the Government will be quite prepared to cover their tracks with retrospective legislation again – if any hint of impropriety is uncovered should any investigation occur (for some reason there Councillors around the table voting against a report on what an investigation might look like – nevermind actually holding an investigation).