External funding will be sourced to offset increasing costs relating to Wairoa’s main street revitalisation project.
In January last year, the Te Wairoa E Whanake project was granted PGF funding to transform the old Winter’s Building, on the corner of Locke Street and Marine Parade, and the neighbouring burnt out building.
Since then, COVID-19 lockdowns and an unprecedented escalation in material costs have impacted on the project.
At last Tuesday’s Economic Development Committee elected members heard there is a chance the forecast project variance could be around 9% of the total project value.
Project managers, Vision Projects, have already sought additional external funding to offset the variance and identified funding sources for application next year.
Wairoa District Council chief executive officer Kitea Tipuna said New Zealand going into lockdown just weeks after Wairoa received the government’s regional investment into Wairoa’s main street was unfortunate timing.
Nationally, labour costs and building material shortages have driven a sharp increase in construction costs around the country. Supply chain issues and rising construction costs have been acknowledged as placing pressure on the building and construction industry.
Wairoa Mayor Craig Little said Wairoa’s over runs are lower than other PGF related project overruns throughout the country. “We are all aware of overruns that are being experienced, even in private home renovations, extensions and building.”
Te Wairoa E Whanake is a landmark project and received $4.8 million-dollar Provincial Growth Fund funding to transform Wairoa’s town centre to assist in creating further retail, employment, social and educational opportunities.
Physical work is well underway at the burnt-out buildings location which will feature retail sites and a community courtyard, and the design stage is complete for the Winter’s building which will include the relocation of Wairoa’s i-Site
When looking into the budget variance, Council’s finance team has taken into consideration the global market and increased price of construction and materials.
To address any potential overspend, material ordering has been carried out in advance to avoid cost increases, and fit-out costs will be controlled where possible. These cost control and reduction measures will complement the additional funding that is being sought.
21 December 2021
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