Construction industry cost escalations are pouring cold water on the Aquatic, Health and Education Centre of Excellence, and Tamworth Regional Council is calling on the State and Federal Governments to help fund the shortfall.
Following an extensive Early Contractor Involvement (ECI) period, the cost of the facility is now sitting at $68.3 million despite significant areas of value management already applied to the building.
“The increase is attributed to a number of elements, with the majority beyond the control of the project such as our regional location, general construction cost escalations, specialist contractor availability, and even the ongoing conflict in the Middle East,” said Tamworth Region Mayor Russell Webb.
Councillors in 2024 endorsed the then $45 million project, with $15 million committed from the State Government. In May 2025 the Federal Government committed $9 million to the project, reducing the Council contribution to $21 million.
“The previous Council was willing to commit up to $30 million, and we believe we can fund up to $33 million, but we just cannot go any higher than that and be financially secure,” added Cr Webb.
Council contributions for the Aquatic Centre cannot be redirected to other Council infrastructure projects, and the State and Federal funding agreements are dependent on delivering a facility that meets the criteria for a Centre of Excellence.
Value management items that will reduce the cost of the project, but not the functionality, have been applied. These include a change in building façade materials, moving to a modular pool shell rather than concrete, reduction in size of the plant room, as well as the conversion of the kitchen and gym to cold shell spaces for fit out by future tenants, reducing corridor widths and scaling back landscaping.
“This cost increase is exactly why Council staff recommended the Early Contractor Involvement procurement model, as we’ve been able to identify these cost increases now before significant work has taken place,” said Tamworth Regional Council General Manager Paul Bennett.
“The scale of the market escalation we have seen in the last few years was completely unexpected. From 2019 – 2021 we saw annual escalations on the Eastern Seaboard average 3-3.8%. In 2022 this rose to 8%, and has stayed elevated well above that 3% level ever since. This latest cost includes contractors adding 12.5% escalation based purely on the uncertainty from the conflict in the Middle East.
“Our current aquatic facilities, like so many across the country, are at end of life after serving the community for nearly 90 years. We have heard the community’s calls for a year-round aquatic centre that will meet the needs of our growing region, but we also need all levels of Government step up so that we can deliver this long awaited project,” concluded Mr Bennett.
A timeline of the project:
2022 – A feasibility study and business case approved by Council with a total project cost of $61 million, and Council funding of $16million. Grants were applied for in December 2022 based on construction works commencing in February 2024.
February 2023 – NSW Government commits $15 million through the Office for Sport NSW Centre of Excellence Infrastructure Grants.
2023 – Special Rate Variation consultation and implementation across Council, freezing Council’s commitment to large projects
2024 – Application made to Federal Government’s Growing Region Program Round 2 for $9 million, with a reduced budget of $45 million
January 2025 – $9 million Federal Government funding committed
September 2025 – Council enters Early Contractor Involvement agreement with Richard Crookes Constructions (RCC) following a competitive tender process.
October 2025 – First budget revision comes in based on new costings from RCC, forecasting a $57 million total project cost. Value management items were applied to the project that do not reduce the functionality or risk the contributions of the State and Federal Governments
March 2026 – A fixed price returns to Council of $68.3 million. This final price includes escalation from sub-contractors following the commencement of the war in the Middle East.
Stay up to date with the project on our Have Your Say Page.
