South Rocky flood levee cost blows out to $189m
THE contentious South Rockhampton flood levee project has suffered another staggering cost blow out, pushing the final cost estimate up another $80 million to nearly $190 million.
All levels of government had pooled their money to contribute $80 million towards the vital project which would flood proof 1500 properties, businesses, schools and the Bruce Highway from frequent flooding events, but recent design changes have resulted in the price soaring from $60 million a year ago to the most recently quoted figure of $109 million.
In 2017 Queensland Premier Annastacia Palaszczuk described the construction of the flood proofing infrastructure as a “no-brainer” but it was her government that was the first to raise its concern with the sharply rising price tag.
When the cost estimate of $158.54 million became known earlier this year, The Morning Bulletin understands council officers requested state and federal governments to contribute more funding.
However, in considering that request, federal and state agencies uncovered a further $30 million in expenditure would be required, taking the total cost for the project to at least $189.54 million.
According to the Queensland Government, RRC has not advised whether it would fund this itself, whether it wished to revise its request to the state and federal government, or whether it still intended to proceed with the project.
A spokesperson for the Office of Minister Cameron Dick said given the significant increase in cost, “federal and state government officials have asked council how they intend to proceed with the project and its funding”.
“The South Rockhampton Flood Levee is a council project, not a state or federal government project, and council is responsible for ensuring the project is fully funded,” the spokesperson said.
“The Palaszczuk Government committed $25 million to the project in July 2017, in line with council’s request.”
Capricornia MP Michelle Landry confirmed she had been made aware of the continuing escalation of construction costs for the levee project.
“We have put money on the table for the construction of the project within the current funding envelope and there are concerns that need to be addressed about how the council intends to fund the additional costs,” Ms Landry said.
Previous cost blowouts had already forced RRC to look at delivering the project in three stages.
Due the approaching local government election and RRC entering caretaker mode, there were restrictions about who could say what regarding the project.
RRC chief executive Evan Pardon said since receiving the planning approval from the State Government in October last year, council had worked closely with the state and federal governments to finalise the detailed design and business case.
“The detailed design and business case was submitted to the Queensland Reconstruction Authority earlier this month along with an estimate that was independently undertaken to give the best estimate other than going out to tender,” Mr Pardon said.
“The revised project cost estimate in that assessment is $158.54 million to build the Levee. A total of $80 million has already been committed with contributions from Local Government ($30 million), State Government ($25 million) and Federal Government ($25 million). This leaves a shortfall of $78.54 million.
“As we have done in the past, council is continuing to work with both levels of Government to address the shortfall to be evenly split between both State and Federal Governments.”
In terms of the $30 million referred to by Minister Dick’s office, Mr Pardon said that cost was broken up into three $10 million elements – property acquisitions, a fourth pump station and the ongoing project management once construction starts.
“As council has said throughout the life of this project, property acquisitions don’t qualify for grant funding so we have spent that portion already,” Mr Pardon said.
“We have already informed the QRA we will be seeking grant funding for the fourth pump station and the ongoing project management will be decided by the new council once caretaker has concluded and is based off the success of getting the money to build the levee.”
Citing conflict of interest concerns regarding property she owns in the area which would be protected, leading advocate for the levee Rockhampton region mayor Margaret Strelow stepped back from the involvement with the project in late January.
Given there was potential for a billion dollar blow out in Brisbane’s $5.4 billion Cross River Rail project, the Queensland Government was questioned whether they would prop up that project while leaving key regional projects like the levee to flounder.
It responded saying the Minister for Cross River Rail had recently announced changes to the Cross River Rail Delivery authority to hold the contractor to the contracted price.