Newsletter 48 – Olympic Pool

Newsletter 48 – 17 October 2022

There’s a lot of talk about the cost of North Sydney Olympic Pool (NSOP) rebuild and what it might cost – nothing like getting the facts sorted first.

North Sydney Olympic Pool was originally built in 1936; it has three major elements:

1. 50-metre “Olympic Pool”;
2. 25-metre pool; and
3. Grandstand (running the full length of the “Olympic Pool”).

“Corporate” knowledge

The NSOP rebuild has been under consideration since 2013. Council is fortunate to have retained “corporate knowledge” with respect to the pool with:

• three councillors (present Mayor Baker, immediate past Mayor Gibson and Councillor Beregi) being elected to Council prior to 2013;
• me being elected to Council in 2017; and
• the present head Engineering and Property Services serving continuously since before 2013.

Understanding what our community expected of the redevelopment

2008 the “Olympic Pool” was lined with a PVC membrane in large measure to reduce or eliminate the leakage which was causing the corrosion of the pool walls. The membrane had a design life of 10 years. In 2008 it was reported:

Corrosion of the pool walls is very severe and will most likely compromise the structural integrity of the pool walls in some areas. It is possible some reinforcement has totally lost its structural integrity.

The timeline:

• 2013 – Council “approved” the redevelopment of the pool and embarked on a process of community consultation.
• 2014
  • Findings of the community consultation process were presented to Council; they covered the views of:
    • 1,145 respondents to a survey;
    • Stakeholders; and
    • Community groups (including Precinct Committees).
  • The findings of the community consultation process caused Council to have 7 options developed

For more see Council’s website.

• 2015 – Council decided to put all design options on public exhibition along with preliminary cost estimates ranging between $16m and $78m.
• 2016 – Outcome of the 2015 consultation process was reported to Council.

Choosing an option most in line with our community’s wants and our Council’s ability to fund.

Keeping the pool as an amenity in North Sydney was always a paramount concern. It won’t surprise to learn that every significant decision taken by Council was based on or guided by reports from consultants with expertise in the areas reported on.

The timeline continued:

• 2017 – Council decided to go forward with Option 2 by taking it to a detailed design phase and preparation of a business analysis of the costs and future revenue streams of the project.

• 2019 – It was reported to Council that the Grandstand had reached the end of its useful life and that retention of the 25 metre-pool was subject to an assessment of its condition when construction commenced because the structural integrity of that pool’s shell could only be properly assessed once the grandstand had been demolished. At the time of the February and March 2019 reports to Council the option for the pool was referred to as Option 2(b)

• • As to the:
    • Grandstand, the February structural engineering report concluded that the grandstand had reached the end of its useful life.
    • The 25-metre pool, when the grandstand was demolished and that pool emptied, cracks appeared in its shell; it was reported that the shell could not be re-used.

• • The cost to deliver option 2(b) including complete replacement of the grandstand and a construction contingency which allowed for the potential replacement of the 25-metre pool was put at $57.9million – this was reported to Council in March 2019.

Delivering option 2(b)

Having determined that funding was available and decided to go forward with option, the tasks that then lay ahead were:

• Prepare:
  • detailed plans and specifications; and
  • a contract for the construction.
• Call tenders and let a contract to the successful tenderer.
• Administer the contract.

1. Contract

The construction contract is based on AS4000-1997 with amendments (e.g. expanded contractor’s warranties and a clear obligation on the contractor to inform itself) aligning the provisions with the scope of the project and that better protected Council.

A Committee was formed by Council (I was a member) to oversee the preparation of the contract.

Essentially the contract provided for a price for the work scoped (in the design and associated specifications) and allowed for variations for work not within the scope and movements in costs of materials.

2. Selecting a Contractor

The tender process was subjected to a probity review.

• Probity review was carried out by Prevention Partners NSW – The reviewer found the probity hurdles all met.

The timeline:

• 2020 – contract awarded (December).
• 2021 – possession of site handed over to contractor (March).

3. Administering the contract

The drivers for variations are changes in input costs (e.g. steel), changes to scope and lost time:

• Input costs – a lot of steel is used in the construction of grandstands and pools – during 2021 steel prices increased by around 24%.
• Scope changes to those specified in the contract – these have been minimal.
• Lost time – caused by adverse weather conditions and COVID has been significant.

The construction contract is valued at $53.5 million. Council has allowed for an overall final budget of $63.9 million, which includes the design and development costs, legal and specialist consultancies, project management for the balance of the project and an allowance for contingencies that may arise during construction.

At end 2021 approved variations are, given the size of the project, small – less than $200,000. Unapproved claims for variations (at values attributed by council) were within the amount allowed for contingencies.

Claims for variations are inevitable – the task is to vet them to ensure that they are for value and determine if they are to be accepted or rejected under the terms of the contract. This vetting process is in full sway now.

Ian Mutton

imutton@crafers.com