“Given the scale of these risks, officers have not progressed detailed negotiations on these issues, while direction is sought from council,” council officers said, despite earlier saying the council planned to sign the contract this month.
Council officials have also warned if it went ahead as planned, the council take would be put at further risk if the contractor ran into unexpected challenges underground.
They are calling on councillors to launch a review to assess the project’s “strategic alignment, value for money, and funding implications”. The review could cost up to $3m.
It comes after the council in August revealed another $20m cost escalation, which was able to be reduced after the project was scoped back.
While the project is co-funded at 51% by NZ Transport Agency Waka Kotahi (NZTA), the agency has the power to withdraw its funding if the council seeks to change the design, even if changes are minor.
The regional council has indicated it wants to reinstate bus stops outside the Reading Cinema complex and St James Theatre as part of the design, something the council notes could put the NZTA funding at risk.
Wellington City Council has released its new design for the Golden Mile on Courtenay Place. Image / WCC
“Given these risks, it is evident that the project’s scope and benefits will not be able to be delivered within the existing budget and on this basis Council’s direction as to the project’s future is required.”
The preferred review options council officers recommend would be undertaken independently by a third party at a cost of between $200,000 and $400,000 and take three to six months.
Other options on the table include a scaled-down, in-house review at a cost of $70,000, or a more comprehensive business-case review, which could cost up to $3m.
The project’s current price for the full work was in August said to be $116m, with a built-in rise to $139m to include contingency.
Mayor Andrew Little will be meeting with Transport Minister Chris Bishop next week, where discussion of the Government’s contribution to the Golden Mile project through NZTA would be expected to be discussed.
This afternoon, Little told the Herald that throughout his campaign to become mayor he sought assurance about the costs of the project.
“I am aware that although the Government has agreed to fund 51% cent of the project, that was based on costs four years ago, and the dollar amount of Government support is fixed,” he said.
”The purpose of the proposed review is to provide up-to-date information, so that decisions on the future of the project are based on the most current costs and the real potential cost to council.“
Little said it was “clear” there needed to be “better control” of council spending.
Throughout the campaign, Little said he supported the project in principle. He has since described it as “controversial” but said he would review it out of concerns about cost escalation and impact on nearby businesses.
“We’ve got to think carefully about whether this is a commitment we can make” Little told the Herald last month.
Wellington Mayor Andrew Little. Photo / Mark Mitchell
Flyover footage was released in February, showing what the final design could bring to Courtenay Place.
It includes excluding private vehicles during daytime, a cycleway running down one side of the street, widened footpaths, new public seating and outdoor dining spaces.
There would be more trees and rain gardens that did not need watering and which were designed to filter rainwater before it entered the harbour.
It was previously part of the now-canned Let’s Get Wellington Moving transport package (LGWM). The Golden Mile component was passed over to the council, with the agreed NZTA funding, after a deal with the National-led Government, which campaigned on scrapping LGWM.
The Golden Mile runs from Lambton Quay to Willis St, Manners St and eventually Courtenay Place, but details of plans for beyond Courtenay Place have still not been shared.
Wellingtonians have been consulted on the future of this part of the city five times in the past decade.
Ethan Manera is a Wellington-based journalist covering Wellington issues, local politics and business in the capital. He can be emailed at ethan.manera@nzme.co.nz.