REVEALED: What caused the DEC redevelopment’s $20 million blowout?

Premier Peter Gutwein said the cost of a Derwent Entertainment Centre redevelopment has increased 40 per cent from initial estimates in early 2020. COST BLOWOUTS EXPLAINED >>

UPDATE: February 18

THE Greens say Tasmanians should be frustrated the redevelopment of the Derwent Entertainment Centre is costing them $15 million more than originally forecast.
Premier Peter Gutwein revealed on Wednesday that the cost of the project had blown out from $46 million to $66 million — with the State Government picking up the tab for most of the cost overrun.

The blowout has been blamed on the complexities of a major stadium redevelopment, the tight project time frames and Tasmania’s buoyant construction market.

But Greens Leader Cassy O’Connor said there were questions to be asked about why the initial estimates were so far off.

Greens leader Cassy O'Connor .

“Many Tasmanians are excited about having a team in the National Basketball League, but probably won’t be stoked about the blowout of taxpayer funds on the DEC redevelopment,’’ she said.

“This time last year the State Government committed $40 million to the project, but in just 12 months that has ballooned by more than 40 per cent. That’s a huge jump at taxpayers’ expense.

“While this project is an important investment, Tasmanians will be justifiably frustrated another $15 million of their money will be added to the bill. The question is, how did the government get it so wrong?

“This is money that could be spend on housing, health or education.”

The redevelopment is expected to be complete as early as October, allowing for the Tasmania JackJumpers inaugural match in the National Basketball League.

INITIAL: February 17

THE cost of the Derwent Entertainment Centre redevelopment has risen by more than 40 per cent since initial estimates, but Tasmania JackJumpers officials are confident the venue will be ready for the club’s first game as early as October.

Tasmanian-based builder Vos Construction has been awarded the contract for the second and major construction stage after the first stage was completed late last year.

Premier Peter Gutwein said the cost had increased from initial estimates in early 2020, following the project going to tender — from $46m to $66m.

“This is due to a range of factors including the specialised nature of a major stadium development, the very tight project time frames and our buoyant construction market,’’ Mr Gutwein said.

Premier Peter Gutwein alongside chairman of Vos Darren Vos and coach of the Tasmania JackJumpers Scott Roth as Vos has been named the successful tender for stage 2 redevelopment of the DEC. Picture: Zak Simmonds

The State Government will contribute a further $15 million to take the total government spend to $56m, with NBL owner Larry Kestelman’s LK Group responsible for any further cost.

Mr Gutwein said 150 jobs would be created during the redevelopment, which would make the centre “one of the most contemporary entertainment venues in the Southern Hemisphere”.

“This is exciting, jobs are going to be created and I am very pleased that Vos Construction, a local Tasmanian firm, is going to be taking this forward,’’ he said.

“I said last year we were going to build our way out of COVID and I mean it.”

Tasmania JackJumpers chief executive Simon Brookhouse said the stadium would be world-class.

“Obviously it’s going to be our home, but this is an entertainment centre and we have a really bold vision to minimise the non-usage of the venue,’’ he said.

“We want to maximise the usage of it and make sure it’s used as often as possible for a variety of different things.”

Premier Peter Gutwein alongside southern construction manager for Vos Mark Millhouse and CEO of the Tasmania JackJumpers Simon Brookhouse as Vos has been named the successful tender for stage 2 redevelopment of the DEC. Picture: Zak Simmonds

Mr Brookhouse said the stadium would be ready for the club’s inaugural game.

NBL seasons usually begin in October but the impact of COVID-19 pushed back the start of the current season, meaning the 2021-22 fixture start could be delayed.

“It’s a tight project, there’s no doubt about that and the time constraints are really tough but we’ll get there,’’ Mr Brookhouse said.

“We’re working with the construction company to make sure we're on target for a normal start in early October.”

JackJumpers coach Scott Roth said the new stadium would be a drawcard to attract big-name players to the team.