Newsletter 74 – Pool Cost and Delay

Newsletter Number 74 – May 2026

North Sydney’s Olympic Pool.

• Why the delays in completion? Now 3 years late
• What’s the cost? Now (“at least”) 90% over “budget”
• Why “at least”? Because we don’t know the final cost

Who has lead Council through the Pool project?

Consider the number of months:

• Between signing contract (January 2021) and projected to be completed in May 2026 = 63
• J Gibson was mayor = 9
• mayor’s position vacant = 3
• M Baker was and remains mayor = 53.

Background

The decision was taken in 2020 to go ahead with the rebuild of the pool and grandstand – refurbishment was simply not a viable option.

• The pool liner installed a decade ago to stop leaking was progressively failing.
• The grandstand was suffering concrete cancer and had its capacity reduced because of safety fears.

The contract for the design:

• The architect asserted that a full set of final drawings and documents had been provided.

The contract for the rebuild:

• is based on the Australian Standard AS4000-1997 Construction Contract modified for the rebuild project,
• was put out to tender,
• attracted 5 non-conforming bids,
  • negotiations with a bidder concluded with Council’s executive recommending the contract be given to one bidder – that recommendation was accepted by Council in December 2020,
  • The negotiation resulted in the budget allocation of $63.9M, and
• was signed in January 2021.

The tender process was reported on by a probity advisor. The report was fulsome and complimentary.

In March 2021 the Olympic Pool site was handed over to the builder.

With the (design and construct) contracts in place the task of North Sydney Council was to administer those contracts.

Construction – delays and escalating cost

Council to November 2021 under Mayor Gibson

*Outstanding variations reported to be with in the contingency allowance.

New Council and Mayor Baker elected

The Councillors elected in December 2021 elected Zoe Baker mayor in January 2022

Does Mayor Baker, now in control:

• Seek to renegotiate the contract for the rebuild of the pool? No
• Change the lawyers who advised on and were engaged in the negotiation of the contract for the rebuild? No
• Change the architects who designed the rebuild? No

The inaction was a validation of the appropriateness of contracts and an endorsement of their past administration.

*The potential budget over run was reported at between $25 and $30m with the scope expanded to include

• consultants, contract works, works outside original scope such as fit outs and technology and costs associated with establishing operations for the pools, gym, creche, and kiosk
  • Significantly, the decision to bring management in-house shifted full operational risk to Council and added significant cost, beyond fit-out, approximately $1 million per annum to which is to be added depreciation estimated to be an additional $2.4m pa
• “sufficient” contingency given the level of risk associated with the project.

The forecast total cost then escalated to $122m by the:

• decision of Council to fit out and operate the amenities (e.g. gymnasium, swim school and retail) which were originally planned to be let out to independent operators,
• litigation with the builder and architect, and
• delays (which on any building project are costly).

Eight months into Mayor Baker’s term

On 10 October 2022 Council resolved to undertake an independent review of the Council’s management of the project.

PricewaterhouseCoopers (PWC)was engaged to undertake the review – it’s made 16 “findings” and 33 recommendations (13 specific to the Pool Project).

Significantly, PwC did not recommend contracting out project management, opting instead, for Council to continue to manage the project (albeit with the added support of a new “steering committee” with APP Corporation engaged at first as an Independent Advisor – now at a cost of $2m).

• In other words, the advice was to better administer the contracts.

Now over 3 years late the cost to complete (using the estimate given by Council in February 2024) has risen, 90% since Mayor Baker assumed control