CONSTRAINTS in the construction market are set to hit the Invercargill City Council’s infrastructure plan, delaying key projects.
A letter from Audit New Zealand representative Andy Burns was presented during a council risk and assurance meeting on Tuesday about its long-term plan.
Mr Burns drew attention to three matters – the Three Waters reform, the delivery of the capital programme and external funding of capital projects.
Although the council was taking steps to deliver its planned capital programme, there was uncertainty over that due to “significant constraints” in the construction market, he stated.
The council proposed to spend $115 million on capital projects over the next 10 years.
“If the council is unable to deliver on a planned project, it could result in disruption of services as a result of asset failures.”
The issue with construction was also highlighted in a report by the council’s programme director, Tess Browne, who updated councillors on the strategic projects being delivered.
The council had made good progress but was still struggling to find suitable contractors to complete some work in the required timeframe, Ms Browne said.
The Anderson House strengthening work, for example, would have to be delayed as the potential contractors had indicated there might not be the capacity to complete work on the house, which has been closed since 2014.
The programmed completion date was the start of 2022, but now it would be the middle of next year.
“That lateness is simply down to availability of contractors in the $1 million to $1.5 million range.”
The project of biggest concern was the Stead St stopbank.
Ms Browne said the design of the project was more complicated than anticipated and despite a good response from the market, technical issues had an effect on the budget.
A review was conducted in each portion of the project and there was an estimated $2.7 million deficit on the project
“We are definitely behind where the project needs to be in terms of the funding and the project closing out in April, 2022. So we are working with the contractors that we issued … the request for tenders out to, making sure they understand the timeframes we are working to as well, so they can achieve that deliverable.”