25 May 2023

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Four Major Cycle Routes are being significantly impacted by inflation delays, unexpected ground conditions and interfaces with rail infrastructure.

“Since the projects base estimates were established, a number of other factors have driven increased costs. These include KiwiRail interfaces, project delays, contaminated material discovery and increased infrastructure renewals due to poor conditions,” a report to Christchurch City Councillors says.

Read the full Finance and Performance Committee report here.

The cost of the KiwiRail component has increased throughout the life of the projects and it is very difficult to get any certainty around final expected costs.

“Delays continue to occur with KiwiRail delivery adding to project costs through resource time, costs and inflation.”

Council staff are working to find a way forward with KiwiRail to gain cost and delivery certainty and begin discussions with Rau Paenga and Waka Kotahi regarding funding and delivery.

At next Wednesday’s Finance and Performance meeting, Councillors will consider a report advising them of the current $25 million shortage.

The report also notes global events such as the pandemic and war in Ukraine have had a significant impact on inflation, which has affected construction projects.

“Restrictions on movement of goods and supply chain disruptions, and global fuel price increases have caused delays in construction schedules leading to cost overruns and budget uncertainties,” it says.

No additional funding is needed for the upcoming financial year, so funding will be considered as part of next year’s Long Term Plan once there is more certainty about the costs.

A number of Major Cycleway projects, including the completed Rapanui-Shag Rock and the four impacted routes - South Express, Nor’West Arc, Northern Line and Heathcote Express - received funding from the Government’s ‘Shovel Ready’ programme in early 2020. This was intended to accelerate projects to reduce the economic impact of the COVID-19 pandemic.

“Shovel Ready submissions were made based on the best information to hand at the time and were often based on current budgets in the Long Term Plan without scheme and detailed designs having been completed. There was no time for risk assessments to be completed,” the report says.  

An independent quantity surveyor is reviewing remaining work on the routes to gain more confidence in the amount required to complete the projects.