Blowout in costs sparks review

Bungled Maitai project leaves council red-faced

BILL MOORE
Last updated 12:58 20/06/2014
riversidepark
MARTIN DE RUYTER/FAIRFAX NZ

UNDER CONSTRUCTION: Work being done to create a riverside park on the banks of the lower Maitai River.

maitai walkway
RIVERSIDE BOOST The city council has let a $2.79m tender to Fulton Hogan to improve the Maitai Walkway. The affected area is outlined.

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A $527,000 cost blowout on the Nelson City Council's Maitai Walkway Project has been blamed on poor project management, prompting a wider review by an external consultant.

Councillors heard yesterday that even with redesigning to prune costs the budget had been blown. They chose to meet the shortfall rather than halt the works and simply tidy up the lower Maitai site, leaving the job unfinished.

The budget was $2.9 million, but ballooned to a projected $3.63m, with the shortfall of $727,000 offset by $200,000 from the 2013-14 footpath renewals budget.

Councillors spent more than an hour discussing what had gone wrong and what would be lost by sticking with a $527,000 cap on funding the shortfall. Councillors Kate Fulton and Ruth Copeland in particular were concerned that the cuts instituted by the council's staff after the cost overruns emerged would severely detract from the original design by leading Wellington landscape architects Wraight and Associates.

It was eventually agreed to approve the $527,000 but that authority to spend another $60,000 allowed for in the annual plan be delegated to senior councillors after a follow-up workshop to look at the changes in detail.

Mayor Rachel Reese said too many projects in Nelson had been "done by halves". This one hadn't been well managed but it was important and should be completed.

Earlier, group infrastructure manager Alec Louverdis said if he ever saw "plans of that nature" cross his desk again, he would put a hold on them. "Everything went wrong with this project."

His report to councillors said the walkway was a Heart of Nelson project to create a riverside park for passive recreation, with work beginning in November.

"The plans were undertaken by a landscape architect and the plans were very different to the usual engineering standards expected for a project of this nature."

The first tender was re-priced due to inadequacies in the document, and council officers decided not to extend the services of Wraight and Associates.

"On site it became clear that there were a number of items that were under-scheduled, not scheduled at all or had design faults that needed rectification on site."

Louverdis said council officers accepted that their January alert to councillors on possible overruns was "insufficient".

"Process issues" placed the project under serious risk from the start, he said, including inadequate handover between different council divisions.

Reese said council officers now recognised that matters around project risk needed to be reported to the council.

"It hasn't happened with this project. The reasons around that are many and varied . . . but there's been a significant change, and I don't ever expect to see one of these back again."

Before discussing the walkway report, the council approved a recommendation noting that chief executive Clare Hadley was commissioning an outside review of internal project management.

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Hadley's report noted the problems with the Maitai project and said it wasn't the first time "sub-optimal outcomes" had been identified.

The 2008-11 council reorganisation hadn't addressed significant gaps in the project management process, she said.

It was appropriate to commission a review to ensure the council had the right capability.

Reese said Hadley's report was "probably one of the most significant reports I've seen come to [the] council because it's an acknowledgement that actually the way we've been running the projects over many years isn't the best way . . . and we need to make some changes". The review and what it produced was "a little bit different" but would be significant and she thought other councils would follow Nelson's lead.

"This operation is like an ocean liner. It is pretty hard to turn it round. It's going to be a work in progress, but it will happen."

- The Nelson Mail

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