The cost of Wellington's Town Hall project looks set to expand to $130 million, as contractors are understood to be counting on a $20m contingency fund.
It may officially stand at $112.4m, but capital developers say the cost of Wellington's Town Hall project will rise by a further $20m - with the "real" figure an open secret within the industry.
Property developer Richard Burrell, whose company Building Solutions has strengthened some 40 buildings over the last 30 years, believed the true cost of doing up the Town Hall was being hidden from the public, while its real budget was being openly talked about by the project's engineers and preferred tenderer.
"The undisclosed contingency amount is bullshit," Burrell said.
On Wednesday the Wellington City Council (WCC) will vote on $112.4m in money for the major seismic-strengthening project, but they will also vote for an undisclosed contingency fund and a preferred tenderer – Naylor Love Construction.
Council chief executive Kevin Lavery has said the size of that fund would not be made public because, if disclosed, contractors would bill for the full amount at the end of the project.
Council spokesperson Richard MacLean echoed this on Monday, saying the amount of contingency money was commercially sensitive and, though reasonable project estimates had been made, a fixed price could not be obtained for many aspects of the work.
"These will be resolved between the contractor, project quantity surveyor and council once the exact scope of the work is understood. Releasing the value of the contingency could potentially impact the council's ability to negotiate these variations as they arise."
Councillor Chris Calvi-Freeman said the sum would be "something the council would keep to itself" and that he could not comment further, a sentiment reflected by other councillors approached by Stuff.
But Burrell said "everybody in the industry knows" the size of the undisclosed contingency amount, claimed to be $20m, and the only people who didn't were the public and the media.
"One of the engineers involved, and I can't divulge his name, has said to me loud and clear it's $130 million and that's what they're all talking about. The city's telling them the same thing as well. So we already know."
Burrell, who is not involved in the tender process, believed the council should only strengthen the building to 45 or 50 per cent of code so it was "safe", then fix the price of the contract so that there was an incentive for the contractor to look for cost savings.
At a press conference last week Lavery said the price of the Town Hall contract could not be fixed citing high demand in the construction industry, which made the council just one of many customers in the city.
But Burrell said the council had a reputation as a good customer who paid the full amount on time at the end of projects.
"Everybody wants to work for the Wellington City Council because we always get paid," Burrell said.
"There is no risk for Naylor Love in this project and there is no incentive for them to take a cheaper contractor. They will only be interested in taking contractors who are easy to work with, who have big management teams and can make their life easy.
Naylor Love Wellington director Nick Clayton said his company was "not privy to the whole project budget or any contingency allowances" and redirected questions to the council.
"We are also not currently contracted until council makes a decision on the future of the project."
Prominent philanthropist, property developer and former Wellingtonian of the Year Mark Dunajtschik said Lavery was asking for an "open cheque for a bottomless pit".
He had also heard the project referred to as a $130m one within his industry.
Comparing the building to an "old dog", he believed the council would be better off to dismantle the original facade and re-apply it to a new building built to modern standards. He was confident it would then cost "less than $112m".
"Unfortunately the ratepayers are captive," he said.
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