Cost of Sutherland Entertainment Centre upgrade jumps to $41 million

A tender process has revealed the budget would need to be increased by a further $7 million from the $34.1 million approved in September 2019.

The council would need to increase its loan by the same amount, to $18.3 million.

Two years ago, when Sutherland Shire Council decided to carry out a major upgrade on the building, which was then 41 years old, the cost was expected to be $21.8 million and the project completed by September 2021.

That figure was later revised to $29.6 million.

More features were then added, taking the projected budget to $34.1 million.

The cost blowout will be discussed at next Monday's council meeting, with a recommendation by staff the project goes ahead.

A staff report advised other options still available included a minor upgrade just to meet building codes ($20 million) and a full knockdown-rebuild ($63 million).

"When tender prices were opened and evaluated, it was noted that a minimum of $6-7 million of additional funding would be required to complete the project," the report said.

"Any additional value management to cater for the $6-7 million variance would involve significant re-scoping, which would require a new development application, community consultation and would result in a delay of at least 12 months.

"The tender process identified that despite significant value management effort, the project would have funding issues as the market had now priced the project significantly above Quantity Surveyors construction estimate expectations."

The report said COVID-19 had created some uncertainty, as all tenderers qualified this in their submissions.

"Advice during tender interviews on COVID-19 indicated that there is a risk of supply issues for overseas items, however early planning could overcome these," the report said.

"It was concluded however that COVID-19 did not influence the pricing to any appreciable degree."

Up till now, all councillors with the exception of Liberal Kent Johns and Labor's Barry Collier, have supported the major renovation, even though others, including mayor Steve Simpson, were initially in favour of a knockdown-rebuild but supported the majority decision.

In September 2019, Cr Johns launched an eleventh hour bid to dump the proposed refurbishment option and, instead, seek a public private partnership (PPP) to build a new centre over the adjoining council-owned public car park.

Cr Johns warned the council it was "making a huge mistake" and could end up like Port Macquarie Council, which was dismissed by the state government in 2008 after a huge blowout in the cost of a new entertainment centre.

Other councillors, including then mayor Carmelo Pesce, said the council would look "like idiots" or "stupid" if it aborted the well advanced refurbishment project, which the community supported.