A $12 million share buy-up has been approved by the Christchurch City Council to try to salvage the now-$164m Town Hall repair project.
The Christchurch Symphony Orchestra at the Christchurch Town Hall. Photo: Duncan Shaw-Brown
The hall was badly damaged in the 2011 earthquakes. The original budget for the repair project was $127m, but so far $164m has been spent.
Vbase, the council owned company in charge of the repairs, has run out of money and already owes the council nearly $10m in arrears.
In August 2018 the council approved a $45m equity injection into the project - in December the same year it allocated a further $15m.
Today the council voted through approval to buy up to $12m of shares in Vbase in order to get the project finished. The $12m is part of the allocated $15m.
Councillor James Gough didn't support the move and said they were "throwing bad money after good".
"This is the gift that keeps on giving; the original cost was $127m, which then had an equity injection, and here we are again doing it again.
"It's a fabulous facility but the process wasn't a good one, and that being said my preference is a tighter approach."
He said writing off Vbase's debt would've been a better choice.
"I understand everything has a cost associated with it, but the problem is the rate payer is still picking up the tab.
"We should write off the $9.8m, then pay for the rest of the repairs with capital savings - that keeps things much tighter."
Councillor Sam MacDonald agreed.
"This project has continued to blow out - we need to be smarter about our decisions. We need to be more disciplined and find more operational savings."
MacDonald said the council needs to reach the point where it stops borrowing for the sake of it.
But Mayor Leanne Dalziel said taking another other option would create more risk.
"Council staff have looked at all the options and this is the one they have suggested, and I agree it's the best option.
"This project suffered from extreme poor management, and part way through a council team was put in place.
"We all agree that we got into this situation and that we never want to see this again, but the council did step in and stopped any further damage that could have been done if management was able to continue," Dalziel said.
Dalziel pointed out the hall was used for The Press Leaders' Debate yesterday and was a great facility.
The council has acknowledged the repair project suffered from inadequate project governance and management.
Last year Audit New Zealand reviewed the project and found changes to the scope of the project may have contributed to the increase in cost and the delay in completion.
It also recommended the council should conduct an external independent review to help identify lessons learned.
The council was unable to confirm if they have commissioned a review.