Tamworth Regional councillors will consider a cost overrun in construction of the Jewry Street Extension project when they meet again on Tuesday night.
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The councillors will be asked to consider approving the allocation of $850,000 from the Westdale Land Reserve in a bid to finalise the project.
The Jewry Street Extension project involved the construction of an extension to the western end of Jewry Street to provide a heavy vehicle bypass of Taminda.
It was one of three projects that benefited from over $20 million in NSW Government funding via their Growing Local Economies (GLE) program, along with the Country Road Roundabout and the TGGP Trunk Stormwater Drainage.
Funding for the Jewry Street Extension project initially included $5,886,000 from the GLE grant and $654,000 from Council's Civil Construction Reserve.
Construction of the Jewry Street Extension project has now been completed, but it's come at a cost, in excess of the original $6.54 million budget set in 2018.
According to the papers to go before the council on Tuesday, the "additional cost" is due to a number of factors, not the least of which is rising construction costs.
"In the period between 2021 and 2023 the cost of infrastructure delivery was estimated to increase by approximately 40-50 per cent due to multiple factors including global supply chain issues, increased material costs, high demand and market saturation," the papers read.
Meanwhile, the project was delayed by 18 months while complex flood modelling and landowner negotiations were undertaken. The original funding application had anticipated the project would be completed by 2020, when in essence construction did not start until late 2022.
The cost of rectifying the "unsuitable" and poor quality subgrade also exceeded the amount originally allocated.
Rain delays were experienced, which cost time and money.
And the cost of specialist contractors was also higher than expected, alongside rising construction costs.
The additional contribution from the Westdale Land Reserve - which is council's funding source for the Tamworth Global Gateway Project (TGGP) - would bring the total council contribution to the project up to $1.504 million, or about 20 per cent of the total project cost.
"The reserve position at 31 December 2023 was $11,361,229 owing. At the time of writing this report, approximately $5 million of land sale revenue has been deposited into the reserve, an additional $6.7 million of land sales are under contract and awaiting settlement and approximately $9.6 million worth of land is available for sale," the papers read.
Tamworth Regional Council will next meet on Tuesday, March 12, 2024.
