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read moreChristchurch City Council has been advised by the company building Christchurch’s new multi-use arena - Te Kaha, that the cost of the project could increase by up to $150 million.
It says the opening date has also moved out to April 2026.
Te Kaha Project Delivery Limited Chair Barry Bragg notes “we have advised the Mayor and Councillors that we have received the final Design and Construct submission from our lead contractor, BESIX Watpac, and we now project the price of the arena at $673 million.
“Also, at this stage BESIX Watpac are unwilling to provide a fixed price for some materials because of the volatility in the commodity market, so unfortunately that means there is still a risk of further cost escalations, which we have estimated at $10 million.
“This means that the increase could push the total cost of the project to $683 million. We have asked BESIX Watpac to bring the costs down and to provide a fixed price to eliminate any risk to the Council of further escalation. We have expectations that they will do this over the next week.
Bragg added “we are very concerned that the overheated construction market has driven this project so far over budget.
“We have been open about the fact there was a high risk that the cost of building the arena could escalate beyond the $533 million budgeted, given the impacts of the pandemic and the war in Ukraine on the global commodity market and supply chains. However, we did not expect the cost to escalate to this level.”
Christchurch City Council Chief Executive Dawn Baxendale says the significantly increased costs for the arena are very worrying.
If Te Kaha Project Delivery Limited cannot bring the project more in line with the budget, the Council will need to decide whether it wants to:
Baxendale advised “The Council is going to have to make some very difficult choices because it is clear that building the city a multi-use arena will be far more expensive than ever envisaged.
“We will need to consult with the community about the additional funding and will continue to work closely with our Crown partners.”
The Council may choose to complete the detailed design and then reprice the project in the market, at a later date, when prices may have come down.
A report recommending the Council begin consulting the public will be presented to the Thursday 9th June Council meeting. If the Council gives its approval, the consultation will start on Friday 10th June.
12th May 2022 - Christchurch City Council promises full public disclosure on escalating costs of new arena
28th January 2022 - New name and design released for Canterbury Multi-Use Arena
23rd December 2021 - Noise management rules approved for Canterbury Multi-Use Arena
3rd December 2021 - Preliminary design images released for new Canterbury Arena
25th October 2021 - Mid-2025 completion date estimated for Canterbury Multi-Use Arena
13th August 2021 - Christchurch City Council decides to restore extra 5000 seats for Canterbury Multi-Use Arena
23rd July 2021 - Christchurch City Council backs smaller capacity for new stadium
21st July 2021 - Christchurch City Council to vote on design direction for Canterbury Multi-Use Arena
2nd July 2021 - Final property secured to enable development of Christchurch’s $473 million covered stadium
5th October 2020 - $473 million joint funding agreement agreed for new Christchurch multi-use arena
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