FOR IMMEDIATE RELEASE:
26th AUGUST 2009

Mayoral ‘No Go’for $9m. Saving on Baypark Centre

Rejection of a possible $9 million saving on the construction cost of the Tauranga Sports and Exhibition Centre (TISEC) at Bay Park by the Mayor of Tauranga, Stuart Crosby, has been questioned by Citizens Advocacy Tauranga (CAT).

The Mayor’s action follows the presentation of an alternative design and build proposal by Econobuilt, the company that recently completed the Bethlehem College Performing Arts Centre.

Econobuilt estimate the cost of their proposal for the Baypark centre at about $23.5 million, the building will meet Tauranga City Council’s (TCC) design brief and drawings. Econobuilt’s estimate is $9 million less than the Council’s and could have been $12 million less if Econobuilt (and other design/build companies) had been involved in the tender process earlier.

Cr Rick Curach initiated Econobuilt’s interest in the project by sending it the council’s design brief and drawings. He believes the council should widen the field of possible builders by moving the tender process outside the scope of its “pre-qualified contractors” base.

He submitted the “preliminary”design and build cost estimates of Econobuilt to Mayor Stuart Crosby and to the TCC chief executive, Stephen Town, for their consideration.

CAT spokesman Leo Mangos said CAT’s executive had studied the Mayor’s responses to the new design and build quote and considered these to be “negative.”

Mr Crosby had said he did not want to waste the 20,000 hours of design time already spent on the project. “Our reaction is that this expenditure in time seems a ridiculous and unnecessary expense. If the findings from those design hours are not useful to companies quoting on the centre building, then they have already been wasted,” Leo Mangos said.

The Mayor said that extending the tender process “could create the risk that future capital work will cost more.” Leo Mangos said the CAT executive was mystified how a process that saved $9 million on a $41 million project could possibly have a negative impact on the pricing of future capital works.

Another objection from the Mayor was that changes now could put TISEC external funding at risk. “We are wondering if he is suggesting that Council using ratepayer and community trust funding more efficiently will evoke a negative response from either group?”

An additional problem foreseen by Mr Crosby was that changes to the construction programme could require the re-negotiation of user fees. Leo Mangos response was “With lower capital costs, the operational expenses of the building will reduce. Then, the only re-negotiation of fees TCC will have to do is to convince sports groups and exhibitors they need to pay less to use the centre --- that should not be too difficult,”

Mr Crosby had also said a revised construction process could potentially limit commercial revenue opportunities. On this issue CAT considered that if the TCC design brief and drawings did not include all the features required for the commercial application of the building, it could be asked why so much had been expended on 20,000 consulting hours to prepare the specification and also, what chance did other tender respondents have of getting their quote right?

Mr Crosby had said that to delay construction even further could result in losing the opportunities provided by the current competitive market. “However, construction has already been delayed by five years and a quote provides a fixed price which, if accepted, would not be effected by the state of the market,” Leo Mangos said.

“The Mayor seems to think ratepayers would not want him to upset the contractors and consultants, even for a $9m million saving. CAT wonders who Mr Crosby is serving --- the ratepayer who gave him his job and pays his wages or the consultants and contractors who stand to make a $9 million windfall at the ratepayers’ expense? Why is the Mayor supporting an option that pays the consultants/contractors an extra $9 million in ratepayer monies?” Leo Mangos asked

ENDS

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