New Zealand’s Christchurch City Council last week bit the bullet and agreed a fixed price with contractors Besix Watpac for a long-planned, covered stadium in the city, even though it meant accepting a NZ$150m cost hike to account for fast-rising material costs.
The Besix Watpac team were originally appointed as lead contractors in March last year, but subsequent negotiations over the final price amid global volatility in commodities prices delayed the start of construction for over a year.
Christchurch wants a new stadium that can finally replace its former Lancaster Park venue, which was damaged in the 2011 earthquake and later demolished. Now Cantabrians, as Christchurch residents are known, can look forward to watching sporting greats the All Blacks, Crusaders and international pop concerts once more in the 30,000-capacity Te Kaha Canterbury Multi-Use Arena.
When first proposed in 2012, the stadium had a projected cost of $470m, The New Zealand Herald recounts. In recent years the cost had settled at $533m, but grew again to $683m in negotiations with Besix Watpac.
The unexpected hike of $150m led the city council to consult the public. It received 30,000 public submissions, with 77% of them in favour of paying the higher price.
To get a fixed price contract for the arena in these volatile times is a significant accomplishment
Last week, city councillors voted 13-3 in favour of proceeding with Besix Watpac’s lump sum, and it will now enter a design-build contract with their “Kōtui” consortium, which includes New Zealand companies Southbase Construction, Fulton Hogan, engineers Lewis Bradford, and architects Warren and Mahoney, and global stadium design experts Populous and Mott MacDonald.
According to the Herald, the council had already spent $40m on the project, which would have been lost if the vote had gone the other way.
Besix said design has been ongoing and some trade packages for early works have already been let. It noted that Te Kaha will also be one of only two stadiums in the world with a fully enclosed roof and natural grass playing field.
Christchurch mayor Lianne Dalziel welcomed the vote, saying “we can put the debate about the arena behind us and get on with building it”.
“The cost of the arena is much higher than we envisaged when we first began planning for this project,” she said. “But no-one could have foreseen the global events – the Covid-19 pandemic and the war in Europe – which have disrupted supply chains, pushed-up commodity prices and led to an over-heated construction market.
“The reality is that we cannot build the type of multi-use arena that we want for Christchurch for the money that we have on the books. Unless we are willing to significantly scale back the size and scope of the arena, we have to increase the budget.”
She added that the fixed price protects the city from further cost escalations.
Barry Bragg, who chairs the council-owned delivery unit, “Te Kaha Project Delivery Limited”, said getting a fixed-price contract was a feat in itself.
“To get a fixed price contract for the arena in these volatile times is a significant accomplishment and we really appreciate the way that Besix Watpac has worked with us to achieve this,” he said.
He said council rates would need to rise by a net 1.24% to pay for the $150m extra, with the average residential property paying $144 a year between 2025 and 2027, the Herald reports.