Beware of dam-builders cost estimates … coming our way soon.
Even though the numbers will come neatly wrapped up in shiny paper with bows from expensive financial consultants in very nice suits flown in from Auckland or Sydney to bless the numbers and impress the rubes.
Consider this headline regarding the ‘poster child’ of large dams – the Waimea Dam down in the Tasman District, as reported by Stuff:
“Waimea dam project faces another blowout, cost forecast rises to $185m”
Here’s the bottom line of the story …
“The new $185m estimate is more than twice the forecast cost of $75.9m that Tasman District Council put out for public consultation in October 2017, and $80m higher than the $104.5m total at the time the decision to proceed with the dam was finalised in 2018. It comes almost a year to the day a $29m blowout was announced, taking the then expected cost to $158m.”
Repeat … a doubling of cost. And no end in sight.
Efforts are underway to resurrect the failed CHB’s Ruataniwha Dam scheme – call it Dam II.
The first expert analysis has been completed, concluding that only such a dam can meet CHB’s water (i.e., irrigator) needs. Before long, HB’s political decision-makers will be treated to a fresh case for such a venture, with cost estimates and a funding model.
The CHB Dam I was priced at $300m (plus an equal amount for on-farm infrastructure). Imagine a doubling of the cost of that project! At least the proponents of Dam I could argue that they had negotiated a fixed-price construction contract to protect against overruns. But even their deal provided for circumstances where cost increases would be allowed. Putting those escapes in today’s context … perhaps because of a pandemic causing ‘act of god’ labour or supply chain issues.
However, the expert report now making the rounds for Dam II specifically notes that no construction firm would be willing to enter such a contract today – the risk would fall to the sponsors of the project. That’s what Tasman District ratepayers are facing.
Perhaps Dam II, wrapped in plenty of environmental rhetoric and heaps of Te Reo, is a brilliant remake of Dam I. And somehow affordable, without a huge dollop of concessionary Government funding or the ‘environment’ being asked to buy back a hefty chunk of its own water (‘environmental flows’, financed by you the ratepayer). In some circles that’s called ‘protection money’.
I’m trying my best to keep my mind open on Dam II … I can’t wait for the first public presentation by the suits.
CHB has historically been dry-land farming. The only reason for the huge demand for water is the conversion of farms to dairy which needs additional water to operate – and seemingly on an ever-increasing level year after year. If people are stupid enough to farm outside the natural conditions of an area they should be made to pay for additional infrastructure themselves. If the dam is now deemed necessary, allow it, but only at the cost of the main users. There’s enough water (naturally) for consumers to have drinking, washing etc water at present. If farms need the extra supply make them pay directly for construction of dams and so on
Why would you want to build a $$$$$$$$ dam with all it’s environmental downsides when the problem of so called water security is simply the bulk of current water allocation is being
used in the worst possible way by 6 big intensive dairy farms
No sane people would buy a new $$$$$$$ water tank when the problem was simply a broken tap.Fixing that broken tap is a plumbing job for the HBRC but alas they don’t seem to want to get their hands dirty
Wise Water Use and a willing plumber is all we need
Contract managements key and bringing as many functions inhouse as possible … how can you expect a contractor to give fixed price with fuel price sky rocketing, materials simply not available and lengthy compliance and consent delays .. the risk factor any contractor of integrity would build in makes the project untenable and outcomes poor. With the growth in HB (Agr is shrinking(10% less dairy than 1 year ago with more downside … we have 75 dairy farms in HB at present similiar percentage drop with shp and beef with carbon forestry), Urban growth igh , Hort growing) we need to look very prudently about how we resource this or the outcome socially and practically will simply not deliver for our community and infrastruce will suffer further.
We live Down river of said Damm in a earthquake prone area,the whole project is irresponsable and life threatening.Those proposing it obviousily dont.NoNoNo to your bloody DAMM
My sentiments are with Grant
Granted it’s not about a dam.
However, it is regarding the spending, in many cases, squandering of public monies….
where it appears estimates of costs get simply plucked out the air.
Likes of the former CEO of the Port of Napier, being reported in the newspaper, as saying in regards to the cost of building the presently underconstruction, new wharf.
Quote: “Ballpark figure is probably more than 50 Million, and my gut feeling is less than 100,Million’ : unquote. Double the amount wow!
With an estimate the likes of that.
And when the construction of the new wharf is actually completed?
It should be interesting and hopefully Not a shocker? For us all to learn what the “actual final cost”was?
David Bosley
Napier
I am heartened by the above comments, all expressing rational, well considered points of view.