RRC won’t be bailed out after levee cost blowout
Rockhampton Regional Council will have to go back to the drawing board on the South Rockhampton flood levee project after their request for $30 million in extra government funding was rebuffed.
Beset by a series of cost blowouts which saw the price for RRC to build the flood levee rise over the past year from $60 million to $80m to $109m, wary State and Federal Governments have kept their purse strings tied, denying council's urgent requests for an additional $15m each.
Leaked letters revealed exclusively to The Morning Bulletin detail both levels of government rejecting addition funding citing the risk of further cost blowouts.
The State and Federal Government departments detailed perceived cost risks to the project and demanded that RRC look closely at staging the rollout of the flood levee - something RRC had previously regarded as unfeasible RRC due to technical and functional considerations.
In his mid-September letter to RRC's CEO Evan Pardon, Queensland Reconstruction Authority CEO Andrew Nehill said "significant risk remains of further cost escalation to the project, which may give rise to further request for funding from all levels of government".
"On this basis, council is requested to consider staging construction of the levee and other aspects of the project that protects the most vulnerable properties as the priority and fits within the current approved funding of $80m," Mr Nehill said.
Infrastructure, Transport, Cities and Regional Development department general manager Donna Wieland's letter provided further detail on the perceived risks.
It identified "particularly significant risks around sourcing quarry materials at a competitive price" as well as "potential compensation costs for adversely affected property holders that are not included in the costing".
She asked RRC to reconsider staging the project, protecting the most vulnerable properties as the priority, to fit within the current funding envelope of $80m, or provide evidence to show why the project couldn't be staged.
RRC General Manager of Regional Services Peter Kofod said they expected the State and Federal governments would have queries, and said council would continue to work with them and respond to their questions.
"There will always be risks with any project, particularly given the time it is taking to get the job started," Mr Kofod said.
"Council recently considered a notional figure, which is in the vicinity of a total of $2m, for compensation or for raising of properties that might be impacted by additional water and we have sent that figure down to be included in the business case.
"We have deliberately not identified a location where potential contractors would get suitable fill (although we are aware of more than one possible location) and so we can understand that this remains an open question in the mind of the State Government about the cost of this component. This is only going to be resolved by the contract going out to tender and reviewing the various proposals and pricing at that point."
He acknowledged that the option of staging the project was "obviously" better than losing the project altogether, but they needed a willingness from all levels of government to look for funding options to complete the project.
"Any proposals for staging of the project would need to return to the council table for consideration," he said.
"There is no option for a staged delivery that provides protection to just the most vulnerable properties. This means any staged delivery will leave 1500 properties, 3000 jobs and sections of the Bruce Highway vulnerable to flood damage until the job is done and the levee is complete."
Rockhampton MP Barry O'Rourke stood by the Queensland Reconstruction Authority's assessment and the need to stage the project.
"It's important we investigate these possibilities - this isn't just taxpayer's money, it's ratepayer's money as well and the new proposal from the council lifts the direct cost to local residents from $10m to $30m," Mr O'Rourke said.
He said the State Government was still waiting to hear back from council on their decided approach.
Capricornia MP Michelle Landry said the Federal Government was committed to seeing the project delivered.
"I understand there is still work that needs to be done but we will continue to work in good faith with the Rockhampton Regional Council to ensure the South Rockhampton Levee Bank is constructed and delivered," she said.