Council managers called a media briefing yesterday to announce that the contract to build the $75.8 million second stage of the plant had been awarded to UGL New Zealand Ltd.
The company won the $32.17 million contract on November 1, after prolonged negotiations, council water and waste services manager John Mackie said yesterday.
However, delays in beginning stage two meant council staff were proposing to nearly double spending for the remainder of the financial year to bring the project in on time, he said.
The UV disinfection part of the plant needed to be operational by September 1 next year, to replace existing chlorination when the Otago Regional Council consent for that expired.
Mr Mackie said fast-tracking the work would require the council's capital spending - paid for by loans - to rise from $18.5 million to $30.1 million for the remainder of 2010-11, but it would then drop for the remainder of the project's life to 2014.
The overall cost of the project would not change but the extra spending this financial year, requiring new loans, would mean extra loan-servicing costs in the short term, he said.
City council environment general manager Tony Avery said the loan costs could add $1.45 million to rates in 2011-12, and a further $900,000 in 2012-13.
However, council staff believed they had found $984,000 in savings within the project to offset the extra costs, he said.
That was on top of design changes - including the removal of pile foundations in favour of slab foundations for much of the new plant - that had already achieved savings of $3.6 million to keep the project within its overall budget and complete it on time, Mr Mackie said.
A report outlining the changes would be presented to councillors at the infrastructure services committee on Monday, but would also require full council approval, he said.
Mr Avery could not say how councillors would react to the proposal, but he and Mr Mackie believed there was strong public support for completing the project quickly.
Mr Avery said there had been no mention of delaying the Tahuna project that he was aware of, despite the new focus on finding savings from within capital projects to ease pressure on rates.
"How the councillors reflect on that, I'm not sure. That's something the councillors need to consider."
Council wastewater treatment manager Iain Satterthwaite said the $3.6 million savings from design changes were agreed with UGL after short-listed tenders for the project came in well above expectations.
As a result, piling for much of the new plant, except the UV disinfection building, had been removed from the design, after it was found that cheaper slab foundations at Christchurch's wastewater facility had performed well during the city's earthquake, he said.
Tanks would also be made from steel, rather than concrete, adding to the savings.
