New Library and Civic Centre project facing delays and price pressure due to COVID, supply chain issues, inflation, and last year’s flood

Published: 11 February 2022

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Delays in the construction industry caused by global and national supply chain issues mean Ashburton District Council’s new Library and Civic Centre is unlikely to be completed until the second quarter of 2023. Its original completion date was the end of this year.

The $56.75 million building is like many other construction projects around the country and is facing a number of challenges as a range of issues put pressure on completion timeframes and cost.

Council Chief Executive Hamish Riach said that supply chain issues were well documented in the media, and it was not unexpected that there are impacts for Council’s new building. He also noted that the highest rate of inflation since 1990 and an extremely tight labour market were also having an impact.

"There has been significant escalation in all construction materials, freight costs and procurement delay due to national and international supply chain shortages across the wider New Zealand construction industry.

"This is compounded by national building consents and construction activity being at an all-time high."

While the national average on construction costs rose by 6.1 per cent in 2021, inflation impacting the project is much higher due to timber prices, record building consents, and supply chain and labour shortages in the Canterbury region.

"These covid-related pressures have been seen across New Zealand and certainly Council’s own project is feeling the impact," Mr Riach said.

"It should be noted that while Council’s budget has not been exceeded to date and is not currently subject to any change, the cost pressures are very real. We will continue to update the community on these pressures as the build continues throughout the year and into 2023," he added.

The May 2021 flooding event also contributed to delays onsite.

As a result of all these pressures, the timeline for completion has been pushed back from late 2022 to a likely second quarter 2023 completion date.

Council continues to closely monitor budget and progress of the project, with the Project Control Group (representing Councillors, senior Council staff, and external design and project management experts) meeting on a monthly basis.

Council was awarded $20m for the building from Government in July 2020, under the Covid stimulus "shovel-ready" project scheme.

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