Govt told cathedral repair cost probably wrong

Friday, 25 October 2024

Government officials did not believe the costs for reinstating the Christ Church Cathedral were accurate and warned of further pleas for taxpayer cash, a newly released Cabinet paper reveals.

The document, written by Finance Minister Nicola Willis’s office and released by Treasury, details advice given to the Government before it turned down a request in August from Christ Church Cathedral Reinstatement Ltd (CCRL) for up to $60 million.

The cathedral is now in the process of being mothballed. The Crown had already put $25m into the project, alongside money from the city council, the Anglican diocese, and private donors.

Other concerns outlined in the Cabinet paper were that as a private building it would not provide sufficient benefits to justify the extra cost to taxpayers, and that a further grant would seek a precedent for projects such as the Catholic cathedral rebuild.

The paper also said officials considered a report commissioned by CCRL over-estimated the economic benefits of reopening the Anglican cathedral to the city.

“For example, (it over-estimates) the extent to which the cathedral reinstatement would induce new spending and tourism, as opposed to displacing investment from elsewhere in the city,” the cabinet paper said.

“The cathedral does not provide sufficient public benefits, officials have low confidence there would not be further costs escalations, and providing additional financial contributions may create precedent risks.”

The paper said that unlike the Transitional (cardboard) Cathedral, which is not consecrated and is open to the public, the repaired cathedral would not allow religious ceremonies from other faiths, non-denominational services, or events involving food.

It also notes that $80 million - over half the original budget - had already been spent on the project. This went into consenting, design, planning, construction, management and fundraising.

The most recent cost estimate to complete the work, after the Anglican diocese agreed to reduce the scope of the project, was between $209m and $219m. This left a shortfall of $75m to $85m.

“Given the complexity of the project, officials expect there would be cost escalations beyond the requested contingency funding.”

It went on to warn of a “high” risk that there would be a request for yet more government funding.

The cabinet paper said risks of not putting in more Crown cash included being asked to help pay for demolition later.

“As the cathedral would continue to be a construction site, albeit with no activity, it is likely the site may continue to deter investment around Cathedral Square and the completion of Cathedral Square as an anchor project for the city,” the paper said.

“Given that scenario, there is an argument that demolition may be preferable to mothballing.”

Input from Heritage New Zealand included that mothballing the building “would be highly problematic”.

“It presents a significant risk the project would stall completely and reinstatement would not occur.”

The Cabinet paper said the Government should either reject CCRL’s bid for more money, or ask it to submit a revised proposal exploring “further rescoping, rephasing and alternative funding options to reduce the projected shortfall and increase public benefit”.

The Government opted to decline the request. Later the same week CCRL announced it would mothball the building.

In response to the release of the Cabinet document, CCRL project director Keith Paterson said they had “a high-level of confidence in the estimate produced by our quantity surveyor, which was independently reviewed”.

Paterson said they significantly reduced financial risk by removing items such as base isolators and adding in contingencies, and the estimate had an 85% confidence level.

“We would have welcomed the opportunity to share information on the estimate with officials had clarification been sought. However, despite the high complexity of the project, no request was made by Treasury.”