A $1.5 million overspend on the roundabouts at The Lakes on State Highway 36 and 29 has been approved by the Tauranga City Council.

The project was originally meant to be fully developer-funded through development contributions, but the discovery of unmapped Trustpower cables and a requirement by the New Zealand Transport Agency to change pavement requirements blew the budget.

Tauranga City Council has approved a $1.5 million overspend on the roundabouts at The Lakes on State Highway 36 and 29.Photos: Bruce Barnard.

A shortfall estimated at $490,000 will require some loan funding. The council agreement with the developer is structured so council holds the risk of project cost escalation.

The pavement requirements are greater than those experienced on recent similar projects, says the report to council from asset delivery manager Howard Severinsen.

He says they exceed those recently used on the TEL and require material to be imported from the Waikato.

'This represents NZTA's insistence on receiving a first class asset, signalling movement towards whole-of-life, total cost of ownership principles,” says Howard.

Relocation of services costs were included in the project budget, but they are costing more than expected following the late discovery of unknown power cables, and their consequent relocation costs.

'Unfortunately Trustpower does not subscribe to "dial before you dig" which is a service used by designers and contractors to identify underground services,” says Howard.

'There are very few Trustpower cables in the ground anywhere, in fact most of it is overhead. But we chose the spot where Trustpower has underground cables, unfortunately for us.”

The pavement structure upgrade from NZTA was also a late discovery, coming to council at the beginning of construction, instead of during the design phase.

The project was originally planned to be done in two parts spanning financial years 2016 to 2021 with an overall budget of $3,432,964. Construction was brought forward to align with the opening of the Tauriko Crossing shopping centre and follows a review of traffic modelling.

The engineers estimate for the works was reduced from $3,432,964 to $2,729,150 including 10 per cent contingency.

Councillors voted to move $2,243,150 from the 2019/20 financial year to the 2015/16 financial year to provide the budget for full construction in 2015/16.

The requirement to upgrade the roundabouts to include slip lanes comes from the council City Plan.

Completion of the roundabout works is scheduled to occur in September. The shopping centre opening is planned for late September/early October, but with 50 per cent of the site expected to be open this month – prompting the roundabout upgrades to be completed in the 2015/16 financial year.