21 April 2024

CEO Vervoort refutes allegations of project contractors ripping off Council

Hamilton City Council Chief Executive has refuted recent suggestions that contractors of city’s biggest projects are ripping off Council.

Referring to statements made in the past week regarding the costs of infrastructure projects, particularly in new growth area of Peacocke, CEO,Lance Vervoort said “Council doesn’t write blank cheques for projects in the city, and we negotiate hard to deliver the best value for residents now and for the thousands of new people that will call Hamilton home in the future.

Current contract value of bridge is $163.2 million (Photo/HCC)

“The new bridge to connect Peacocke to the rest of the city is one of our most complex and transformative projects. It has been delivered during COVID-19 and major weather events like Cyclone Gabrielle which have had significant impacts on critical material and labour costs. Yet still, the project is being delivered on time and within the budget approved by Council,” he said.   

Lance Vervoort (Photo/HCC)

The construction contract for the new bridge to Peacocke was originally awarded in 2020 to HEB Construction for $135 million. This contract includes an additional pedestrian bridge, 1.6km of new and upgraded roads, wastewater pipes and a new roundabout. 

The current contract value is $163.2 million that includes increases of $23.2 million (to cover costs associated with Covid-19, inflation) and $5 million of additional works fully funded by developers. The cost of this project includes supporting infrastructure around the bridge.

“Like most projects of this size and scale across the country a reasonable contingency is always allowed for in our contracts, however some extremes you just can’t plan or allow for.”

Construction costs for infrastructure in Peacocke will largely be funded by development contributions (around 90%) with just 10% coming from rates.

Rates in Hamilton are proposed to increase by 19.9% in 2024-25, but this is not due to the costs of strategic infrastructure projects, like those in Peacocke, says Vervoort.

“We need more of these high-trust funding models with central government to deliver all the infrastructure in the city, not just the parts that will be paid for by developers.”  

Meanwhile, public consultation on Council’s proposed changes to long term plan which sets out the projects, budgets and financial strategy for the next 10 years, opened on 19 March and residents can have their say.


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