Delay to North Sydney pool sparks concern about another budget blowout

SMH December 2, 2021

By Matt O'Sullivan

The redevelopment of the historic North Sydney Olympic Pool is running months behind schedule, amid growing concerns the cost of the controversial project will blow out further. North Sydney Council has warned the “practical completion” date for the new $64 million pool complex is now February 2023, three months later than its previous timeframe. The forecast delay has been blamed primarily on the removal of hazardous materials and strengthening works, as well as the COVID-19 lockdown and inclement weather. The old North Sydney Olympic Pool has largely been demolished.Credit:Nick MoirIt comes as concerns are raised about the council’s decision to award - without going to public tender - new 20-year leases to existing tenants Ripples Milsons Point and Aqua Dining, which are run by the Bill Drakopoulos-owned Sydney Restaurants Group. North Sydney councillor MaryAnn Beregi said the Milsons Point pool was an iconic site, and questions had to be asked about why the new restaurant and cafe sites were not put out to public tender, and were instead awarded to the current lessee at “what would seem a below-market rate”. Under the new arrangement, Ripples and Aqua Dining’s lease terms will start at a rate equivalent to what they paid before they had to be closed for the pool redevelopment. They will be subject to annual indexation and market reviews every five years.

Councillors Zoe Baker, left, and MaryAnn Beregi are demanding greater transparency of the $64 million pool project. Credit:Nick Moir The redevelopment of the pool has already been the subject of cost blowouts, heritage concerns and controversy over $10 million in federal funding it received from a scheme for female change rooms and community swimming pools in rural and regional areas. Cr Beregi, who is seeking re-election to council this weekend, said the cost of the pool was likely to escalate beyond the most recent budget of $64 million.

“It has gone from $28 million to $58 million to $64 million. They have only just finished the demolition, which is the easy part. The build is the hard part,” she said. “Council’s finances are already stretched and there are no more funds.” North Sydney Council awarded the contract for the pool redevelopment last December to Icon, which is the construction company that built the cracked Opal Tower. The aquatic complex is the largest infrastructure project undertaken by the council and involves a new 50-metre pool and indoor pool, a children’s pool, expanded gymnasium and grandstand. Cr Beregi and two other councillors attempted to force the council to release a confidential report on the pool project last month, but the motion was defeated. “It is public funds and people should know how much is being spent and what the forecast spending is,” she said. “The council has voted to keep the report confidential and away from ratepayers in the lead up to the elections.” Mayor Jilly Gibson, who opposed the motion, said she voted to keep the report confidential because projects of such a large scale were complex, and it was unhelpful to have “every minor decision” critiqued in the media. “I have every confidence that it will come in on time and budget,” she said. In January, she said she was “very confident that we’ll be swimming in it before Christmas 2022”. An artist’s impression of the revamped pool complex at Milsons Point.Cr Gibson, who is also seeking re-election, defended the council’s February decision to award new long-term leases to Ripples and Aqua Dining, describing them as “an amazing tenant who has never put a foot wrong”. Mr Drakopoulos said he believed his restaurant group was paying a market rate for the new leases, which would be considered by a valuer every five years. He said he had not sought compensation from the council for the pool redevelopment ending his company’s leases about five years before they were due to expire. Councillor Zoe Baker, who is also running again, said she had serious concerns about how the pool project was tracking against its budget and timeframe. “[Those concerns] haven’t been alleviated by the most recent confidential report to councillors,” she said. “It is a very constrained and difficult site to build on, and it is not surprising that they have encountered issues with the demolition and it likely to extend into parts of the build.” A council spokeswoman said the practical completion date for the pool project had been “impacted slightly” but the redevelopment was “progressing well and remains within budget”. She said future fees for the restaurant leases would be set by “independent market valuation in accordance with normal commercial practice”, and the terms and conditions of existing leases which were interrupted by the redevelopment had been honoured.

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