Council knew sludge plant had 50% chance of cost blowout – bill now set to top $500m
Thursday, 14 August 2025
Wellington City Council knew two years ago there was a 50% chance its new sludge treatment plant would blow its budget – and now sources say the cost has surged past half a billion dollars.
Councillors will be briefed on Thursday morning on the scale of the escalation, with details expected to be made public later in the day. So far, the council has been tight-lipped on the figures or the reasons for the increase.
The Moa Point sludge minimisation facility was first costed at $200 million in 2021. By December 2022, the budget had already risen to $366.5m, and internal papers presented to councillors at the time used a “P50” forecast – meaning there was an even chance the final price would be higher.
Officials warned then that major uncertainties remained, including ground conditions, materials and equipment selection, and power supply upgrades. To manage the risk, they recommended building a financial buffer into the 30-year levy on Wellington ratepayers that is funding the project.
By then, the council had already spent $36m on the facility, treating it as a sunk cost that wouldn’t be recovered.
A quarterly progress report issued in June revealed the official budget had climbed to $428m. That update gave the plant a “red” health rating, citing pressure on contingency funds, delayed design delivery, missed milestones and a dispute with contractors McConnell Dowell and HEB Construction over a 69-day extension request.
The Post understands the latest blowout adds up to $80m, pushing the total beyond $500m. Councillors were given an initial briefing last week, but told to keep the details secret.
The plant – designed to end the practice of mixing sewage sludge with landfill waste –will dehydrate and digest the sludge into reusable pellets and capture biogas to power the facility. It is the first of its kind in the country and is due to open in 2026.
The blowout has revived debate over the council’s approach to major projects.
Councillor and mayoral candidate Diane Calvert said the escalation could have been avoided if her 2023 proposal for an independent review of the Town Hall redevelopment, which went nearly $150m over budget, had been approved.
Ben McNulty, who is standing fro re-election in the Takapū/Northern ward described the ballooning costs as “an absolute gut punch” and “a gigantic blow for ratepayers, the reputation of the council and elected members”.
Council chief executive Matt Prosser has now committed to an independent post-project review once the sludge plant is complete.