A councillor has slammed the Otago Regional Council’s new office project’s multimillion-dollar cost overruns as unacceptable in a cost of living crisis as details emerge of asbestos being discovered.
Otago Regional councillors were presented yesterday with a report on Whare Rūnaka, which Port Otago will lease to the regional council as their staff headquarters once the project is completed.
The report noted furniture and fittings costs had been estimated at $1.5m, but this was revised to $3m and would be funded from the Asset Replacement Reserve.
Cr Gary Kelliher said he had been “bracing” for costs overruns announcements.
“So $1.5 mill to $3 mill. Where else in the real world battling with a cost of living crisis, would that happen.
“This whole building project is unnecessary, extravagant, and burdens the ratepayers forever from the moment ORC moves in.”
He thought the cost overruns were especially infuriating as “the rest of the world was living through a cost-of-living crisis”.
Cr Michael Laws, who asked staff to compile the report, said the findings came as no surprise.
“This build and fit-out hasn’t been plain sailing, and the journey wasn’t required at all.
“The paper highlights the immense mistake the ORC has made: it’s entered an arrangement that will cost ratepayers for 40 years at the most expensive of all staff siting options.”
The cost of the full project was estimated at $56.4m and it was expected to be finished later this year.
That included a $2m value for the Stables and Sawtooth buildings which are not part of the council’s project and will be retained by Port.
In response to Cr Kelliher’s claims, a Port Otago spokeswoman said the internal fit-out of the Whare Rūnaka building was based on the Port Otago office specifications.
“The ORC have a fixed contribution for their internal fit-out and this is managed by Port Otago as part of the overall project.
“The base build costs and any cost overruns for the internal fit-out sit with Port Otago.
“We have incurred additional costs on structural steel to meet additional geotech requirements and through construction inflation over the last three years.”
Meanwhile, the port confirmed there was a two-day shutdown on construction on Whare Runaka last week, after asbestos was confirmed in some of the construction’s fire-rated doors.
A port spokeswoman said Pacific Doors, the manufacturer of fire-rated doors, advised Calder Stewart and other New Zealand/Australia customers that asbestos may be present in fire-rated doors produced for customers.
“Testing confirmed that asbestos was present in some fire-rated doors mostly on the ground floor of the building.
“The site has now reopened with exclusion zones for the ground floor and two small areas of level one and the mezzanine.”
Contractors returned to the site yesterday, the spokeswoman said.