RATEPAYERS look like being left to pick up most of the $6.9 million extra it took to build the integrated health facility in Success.
Two years ago the facility had been projected by the City to cost $38 million. It ended up costing $44.9 million, according to City finance director Stuart Downing, a budget blowout attributed to the financial struggles suffered by the original contractor.
The health hub was opened on October 24.
While an increase had been expected from within the community following news the original builder ” Gavin Construction ” had gone into voluntary administration in mid-2013, the City was confident that would not be the case.
But Mr Downing last week admitted it did indeed lead to a higher cost.
‘The entire cost increase can be attributed to Gavin Construction being liquidated,’ he said.
‘At the time Gavin Constructions went into voluntary administration, the City did not expect increased costs for the project.’
Mr Downing said the best value tender to complete the project after the initial builder was liquidated brought the cost to $44.9 million.
He said the City had applied for funding from the Federal Government. That was request was not approved.
‘The City is now pursuing the bank guarantees totalling $1.6 million to help offset the additional costs,’ he said.
Cockburn MLA Fran Logan described the blowout as unfortunate, but said the gap should not be left to ratepayers to fill.
‘It should come from the City’s retained earnings,’ he said.
‘The building is a great addition to the City but it has come at a substantial cost.
‘Hopefully the ratepayers will see the benefit in the long term.’