DUE to difficulties in the drilling process to acquire geothermal heating for the Mandurah Aquatic and Recreation Centre redevelopment the City of Mandurah will need to spend an additional $783,200.
Construction and testing of the pilot hole was more difficult than expected due to geological conditions, resulting in a significantly longer drilling time, and has also impacted on project costs.
At a Special Council meeting on Tuesday night councillors voted to approve the additional funding.
The project, which is the City’s largest greenhouse gas emissions reduction project, began in November last year.
Preliminary data from a pilot hole indicated there was an insufficient aquifer of suitable temperature within the desired 1100-metre depth.
An approval for a drill to a depth of 1500m was approved. However, after two months’ efforts to complete the test at between 1100m and 1500m, it was unsuccessful.
At a lesser depth it was discovered the project would still be viable and the City could still achieve significant long-term cost benefits as well as reductions in greenhouse gas emissions.
City of Mandurah chief Mark Newman said it’s understood that similar difficulties have been encountered in recent projects elsewhere.
“Initial analysis shows that the water temperatures for the production bore are viable, but are lower than expected and more testing is required,” he said. “Council is being asked to consider further funding of $783,200 in relation to the additional anticipated costs and approve the direction forward.”
The original business case estimated the initial capital costs for the project to be about $3.7million, which represented a payback period of close to seven and a half years.
Mr Newman said this was revised down to about $2.9million and a payback period of six years following the awarding of the drilling tender in June 2014. He said based on current estimates from the contractor, the additional funding will take the City back to just below the original scenario of $3.6 million with a payback period of about seven years and operating savings of close to $500,000 per year.
“It is proposed the City will provide this additional funding from the City’s Building Reserve, rather than increase borrowing further,” he said.
Work on the next phase of the geothermal heating installation resumed this week with the bore to completed in late July. Stage one $38 million redevelopment of the Mandurah Aquatic and Recreation Centre is expected to be finished by late this year.
