North Sydney pool reopening delayed to 2024, as cost soars to $89m

The cost to redevelop the historic North Sydney Olympic Pool has blown out to at least $89 million – $31 million more than the original estimate – a review into the former council’s handling of the project has revealed.

An independent review, commissioned by North Sydney Council in October, also predicted the revamp would not be completed until April 2024 – nearly 18 months later than originally planned.

The redevelopment of the pool has been troubled by cost blowouts, delays, heritage concerns and controversy over a federal government grants scheme. Credit: James Brickwood

The long-vaunted redevelopment of the pool has been the subject of heated debate among councillors, with rising costs, delays, heritage concerns, and controversy over $10 million in federal funding it received from a scheme for female change rooms and pools in rural and regional areas.

Independent Mayor Zoe Baker, who raised concerns about the scale of the project as a councillor, said the findings of the independent review were “unfortunately not a surprise”. But she said they would “act as a catalyst for the current council to address the cost overruns and time delays”.

“We are committed to sustainably managing the funding of the pool and ensuring when it opens that it will be an incredible experience for pool users,” Baker said on Friday.

Work on the redevelopment began in March 2021. It includes upgrades to the indoor and outdoor pools, and building a new 970-seat grandstand, children’s water play area and expanded gym.

In 2020, the council said that the cost to ratepayers of the redevelopment had ballooned from $58 million to at least $64 million. The project was initially expected to be completed in November 2022.

But the review by consultants PwC, which was summarised in a council report published on Friday, forecast it would cost an extra $20 million to $30 million to complete. The full review remains confidential due to commercial in confidence.

The report said the council had limited experience in delivering infrastructure projects of such a large scale and complex nature. The $64 million budget did not consider all costs associated with the project “including internal project management, equipment and fit-outs, and business development”.

“Further, the budget did not provide sufficient contingency given the level of risk associated with the project,” the report said.

The review was critical of the council’s rush to sign the construction contract with developer Icon – the company that built the cracked Opal Tower at Sydney Olympic Park – on New Year’s Eve in 2020.

“This expedited award created issues for the project as the design documentation was incomplete, and site investigations were ongoing, leading to early variations and delay,” the report said.

The review said that cost had been the “primary driver of a number of decisions for the purposes of controlling the project budget” for the pool. This had created significant risks to the project which had “now been realised in a compounding effect throughout the project’s life,” the report said.

Those decisions included the decision to have separate contracts for the design and construction of the project; removing external project managers and managing the project internally; and a considerable reduction in project contingency as the scope of the redevelopment increased.

The pool is due to be completed in April next year. Credit: James Brickwood

The report also said the contract and contingency planning for the project had not factored in the pandemic or La Nina weather conditions. The project, which is running about 500 days behind schedule, was delayed by 22 days due to COVID-19, 88 days due to wet weather, and 38 days for the removal of hazardous material.

The council plans to strip $11.8 million from its capital works budget, which is used to fund upgrades to local roads, footpaths and playgrounds, in 2023/24 in an attempt to claw back costs.

The report also said the council would need to consider a strategy to improve the long-term financial sustainability of the pool complex, including “alternative uses for the facility, taking into account the iconic location”.

Former mayor Jilly Gibson said the review was an “outrageous waste” of money.

“The pool won’t be delivered one week earlier, or $1 cheaper, as a result of this expensive investigation.”

The council has accepted all 16 findings of the review, and has committed to adopting all 33 recommendations. This includes engaging a quantity surveyor to assess any cost and delay claims, and employing a pool manager, who will help form a business case for the facility.

The matter will be debated at a council meeting on April 26.

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