Contractor wants $440m more for sports centre
Friday, 27 October 2023
Claims for more time and an extra $440 million from contractors building Christchurch’s metro sports facility Parakiore have been rejected by the Crown after the budget for the project exploded.
After seeking an extra $212m last year, CPB Contractors has now increased this claim to $439.4m.
Rau Paenga, formerly known as Ōtākaro, the Crown agency in charge of the pool and sports centre, said it has not agreed to the extra funding.
John O’Hagan, chief executive of Rau Paenga, said it continued to reject the “excessive and unsubstantiated claim” on both entitlement and amount.
“Rau Paenga strongly disputes the contractor’s entitlement to this sum and the basis of the claims,” he said.
The claim would increase the project’s contract value to $696m and delay the construction completion date to May 2025, with the opening then likely to be even later that year.
The date had previously been pushed out to mid-December 2024 with an opening date likely in 2025 - seven years since work started in 2018.
CPB’s latest claim relates to a range of issues including Covid delays, ground conditions, and allegations that Rau Paenga has not provided acceptable building design documentation.
Ground conditions have meant an extra 100 concrete columns have had to be sunk.
The facility is already over 70% complete, for which CPB has been paid about $220m to date, and includes some Covid-related claims.
The centre - which will have a 10-lane, 50m pool with 1000 seats for spectators, a diving pool, five hydroslides and several indoor courts for various sports - has been beset by financial problems.
The site was chosen by the then-National government in 2012, with an opening date of early 2017 - at a cost of $217m.
The budget later expanded to $246.3m and then to about $300m.
When Labour came to power in 2017, it ripped up the $246m contract with Leighs Construction because it wanted an extra $75m.
A new contract was signed in 2018, and former Greater Christchurch Regeneration Minister Megan Woods said it would be built by 2021.
O’Hagan said they would strive to get Parakiore completed as close to the end of 2024 as possible but “acknowledge this will be challenging given CPB’s current stance”.
“While we would like to find a reasonable commercial resolution to this matter, Rau Paenga has already successfully taken legal action to prevent CPB from suspending construction works on site based on its unsubstantiated claims.
“As the legal action continues, we are limited in what else we can say at this time.”
Christchurch City Council chief executive Dawn Baxendale said residents and sports groups have been waiting years for Parakiore and deserve better.
“We’re disappointed and dismayed that Christchurch residents are facing further delays to the project, and that contractor’s claims have increased so dramatically.”
The council has contributed $146.9m to the project, which was a fixed-price contract.
In December 2022, the then Rau Paenga chief executive John Bridgman said, “While construction will take longer to complete, we have a fixed-price contract with the contractor and any variations beyond the $317m already allocated will be worked through and agreed on with the contractor at a later date …”
Sport Canterbury chief executive Julyan Falloon says the ongoing delays and disputes were causing frustration within the sporting groups and residents.
“This project is already years behind schedule; residents will continue to be extremely frustrated by this news, and Sport Canterbury, along with our wider sector, share this frustration,” Falloon said.
“The sport, recreation and physical activity sector are relying on this essential community facility, and the delays not only affect planning and budgets, but also the ability for some sports in our region to grow.
“The best-case scenario is for the issue to be resolved quickly, or at least to put this current situation aside so there are no further delays.”