Wastewater Treatment Plant Upgrade Project

Last updated: 28 Jul, 2023 03:49pm

Project Background

Early in 2014, Council adopted a long term vision of removing all effluent discharges to water other than in exceptional circumstances. The project to develop Daleton Farm then began, underpinning information collection to support the 2017 consent
renewal process.

The Council sought a further short term consent to allow the discharge of treated wastewater onto land (Daleton Farm) using a pivot irrigator. This allowed deficit
irrigation, over an area of approximately 20ha via a “smart” centre pivot irrigator, installed in 2014.

The short term consents allowed the Council to gather data and carry out investigations on the land discharge option. The Council then spent the next three years designing the upgraded treatment and disposal project and preparing resource consent applications. In December 2016 the Council adopted a strategy for the upgrade, which formed the basis of the applications.

Stage 1 (2015 - 2017)

− Continue inflow & infiltration investigations.
− Continue network condition assessment, rehabilitation & replacement.
− More tightly manage trade wastes.
− Implement the 2014 consent for Stage 1 irrigation to land on Daleton Farm.
− Install UV disinfection.
− Operate and monitor the environmental effects of land irrigation
− Prepare application for replacement consents informed by monitoring data (for lodgement April 2017).
− Develop sustainable land use practices on Daleton Farm
− Pilot scale test and design Sequential Batch Reservoirs
− Line the inlet and outlet channels and replant the existing wetlands

Stage 2 (2018 - 2025)

− Construct on-site Sequential Batch Reservoir treatment and storage on Daleton Farm (100,000m3).
− Relocate the existing stream discharge to the lower reach of Mangatārere Stream immediately above the State Highway 2 bridge and close to the confluence with the Waiohine River.
− Install second centre pivot and extend on-site irrigation area.
− Discharge to stream during high stream flows (except in rare events when extreme weather conditions overwhelm on-site storage capacity).
− Further develop amenity wetlands.
− Continue inflow & infiltration investigations including interception and lowering of shallow groundwater.
− Continue network condition assessment, rehabilitation & replacement.
− Continue to tightly manage trade wastes.
− Progressively investigate opportunities for supplementary land for additional storage and irrigation.
− Develop sustainable arrangements that facilitate long term security of tenure over privately owned land available and suitable for irrigation.

Stage 3 (2026 - 2045+)

− Progressively expand supplementary bulk storage capacity for treated wastewater off-site as land becomes available and is affordable (land additional to Daleton Farm).
− Extend irrigation to land additional to Daleton Farm as suitable private and/or Council-owned land becomes available and is affordable.
− Continue irrigating treated wastewater to Daleton Farm.
− Continue high-flow stream discharge until an alternative option was implemented.
− Continue inflow & infiltration investigations.
− Continue network condition assessment, rehabilitation & replacement.
− Continue tightly managing trade wastes.

Budget & Expenditure

Financial update

In December 2021 officers updated council on the contractual performance challenges, the damage to the three reservoir liners, and the subsequent default process of the main contractor Central Hawkes Bay Earthmovers Ltd (CHBE). Council approved additional operating expenditure of $300,000 for legal costs, and $1,644,087 additional capex to remediate the damaged liner and complete the Waste Water Treatment Plant reservoir project, bringing the overall budget for the project to $14,612,446.

Repairing the damage and completing outstanding work.

This has been complex given the extent of damage, complex repair methodology, and quality of the original workmanship. At the time of the default the cost to complete from CHBE was $238,365. This means the council was contractually liable for a further $239k to CHBE to complete all remaining Stage 2 work. In December 2021 we estimated a cost to complete for Stage Two of $944,678. Council approved this as part of the $1,644,087 additional capex. The most recent forecast of the cost to complete for Stage Two is $1,883,326. This is due to the escalation of construction costs and significant weather events.

Updated estimate

Now we have the estimated cost to complete for Stage Two, management is able to combine this with our estimates for the remainder of the project. The forecast for the total project is now estimated to be $15,168,188, or $555,742 (3.8%) over the approved budget, including contingency. Management recommended increasing the project budget approval to $15,168,188 at its 28 June Ordinary Council Meeting.

Recovery of additional costs from CHBE

The recovery assessment to date has seen the following activities undertaken:

  • The Engineer to the contract has reviewed cost to complete and has certified that CHBE owes CDC $1,261,339 to the end of April 2023.
  • The Engineer has formally advised CHBE of this assessment under the contract.
  • Council has formally called on the Contractors Performance Bond which has a value of $343,172.
  • Council is currently holding retention money of $125,898.

Next steps

As of  July 2023, the project has not yet reached practical completion, which is the date by which any claims against CHBE cease. Practical Completion is expected to occur within the next few weeks. Further claims against the CHBE for the period from 1st May 2023 until practical completion, will be considered by the Engineer to the Contract.

Taken together with the cost to complete, we anticipate the total settlement amount against CHBE (to the end of April 2023) to be in the region of $1.570m. We anticipate this will be offset by the bond and retention recoveries, leaving a balance amount of claim of approximately $1.1m. Now that CHBE has been notified of the outstanding cost, the agreement provides for an ability to provide CDC with a replacement Contractors Bond for the value of the estimate ($1.261k). Management consider this outcome unlikely.

If CHBE choose not to provide a replacement bond or fail to pay the certified costs, CDC can pursue the remaining amounts through legal processes. We are in the process of preparing alternative strategies for recovery of our claimed costs.


Public reports

All public reports are part of Council and committee meeting agendas. All agendas as far back as 2016 can be found here

To save you time looking through all the agendas, we have compiled all the public reports on the wastewater treatment plant upgrade project which you can access below. All reports have been labelled with the corresponding agenda should you wish to look for that specific agenda in full.

  • 2018 public reports, click here
  • 2019 public reports, click here
  • 2020 public reports, click here
  • 2021 public reports, click here
  • 2022 public reports, click here