'Very good' fixed-price contract negotiated for Christchurch stadium
Tuesday, 12 July 2022
A $683 million fixed-price contract has been negotiated for the proposed Christchurch stadium Te Kaha, it has been announced.
City councillors will decide whether they accept the contract at a meeting on Thursday. The fixed price is $150 million more than the council has budgeted for the project. Councillors could also choose to pause and re-evaluate the project or scrap it altogether.
Securing a fixed price in the contract means there will be a “very, very low” chance that ratepayers will need to stump up more money beyond the extra $150m, the stadium’s board chair Barry Bragg said.
His board, which councillors appointed to govern the project, is recommending that councillors accept the fixed-price contract.
**READ MORE:
* Council rejected government offers to take over Christchurch stadium project
* Christchurch council urged to 'push on' with proposed $683m stadium
* Christchurch mayoral candidates debate future of multimillion-dollar stadium
* 'Little to no economic impact' from $683m Christchurch stadium, economists warn
**
About 77% of the nearly 30,000 people who participated in the recent public consultation have told the council to get on with the stadium.
Bragg said the newly proposed contract meant the lead contractor, BESIX Watpac, would have responsibility for cost of labour, materials, cost escalation and all project risks.
It was a 'very good' contract given there was 'enormous market uncertainty' with supply and labour costs, Bragg said.
'BESIX Watpac have taken the time to test the market, to lock in what they need, to have a very good understanding of what's going on in the market.'
Contingencies were included within the $683m contract to deal with any issues during the detailed design and construction, Bragg said. The council is still responsible for risks relating to supply chain issues, additions or alterations, and the condition of the land, documents show.
The amount of contingency was commercially confidential, he said.
Citing expert advice, Bragg said he was confident the contingency was sufficient.
If councillors do commit the extra $150m to the project and sign the fixed contract, the stadium is expected to open in April 2026, though Bragg said this timeline would be a challenge.
'Covid is going to be the biggest risk,” he said. “We are all motivated to keep to that timeframe.”
When the $150m cost increase of the stadium was first revealed last month, the contract at the time had an unfixed final price.
Bragg said the bid was now fixed because BESIX Watpac have had more time in the market.
“That time has allowed them to fix the lump sum price,” he said.
David Kennedy, chief executive of the council’s Te Kaha project delivery company, said he had 'a positive working relationship' with BESIX Watpac.
“They wanted to get [to a fixed price] just as much as we do,” he said.
“You would have to say there have been some arm wrestles, but they've been done in a cordial fashion.”
Meanwhile, it has been revealed 501 submissions were removed from a recent public consultation on the stadium because they were duplicates.
“That is where people have provided more than one submission, we’ve identified those and pulled them out,” Christchurch City Council research analyst Aimee Martin said.
“Some people had genuinely just put in multiple submissions, others had gone to more of an effort to try and put in multiples and not be found.”
Martin said she was confident they had caught all people trying to skirt the system.
Another 87 submissions were removed for being invalid because they did not provide required information, such as a name, email address, street name or phone number, Martin said.
The main reason why 15% of submitters wanted to stop the stadium was its financial impact, Martin said.
“There was a feeling that the cost and debt burden that was associated with that would put a lot of pressure on the city.”