Newcastle Ocean Baths Daracon stage one contract increases to $18.25 million

Stage one of the project, which includes the pools and promenade area, is now valued at $18.25 million inclusive of GST - which is $4.5 million more than when the tender was awarded.

The remainder of the South Newcastle Beach Bathers Way and skate park works have also been added to the contract after Daracon was appointed to that project, taking the total contract value to $30.9 million including GST.

The GST will be refunded to City of Newcastle in full.

Newcastle council voted to accept a contract with Daracon for the ocean baths works in October 2021 for $12,456,681 excluding GST.

The Newcastle Herald reported in October 2022 that the original pool walls were found to be structurally unsound and needed to be replaced to the tune of $1.3 million.

That took the project value to $15.7 million including GST.

A City of Newcastle spokesperson said there had been a number of variations to the Newcastle Ocean Baths contract since it was awarded, including full replacement of the pool walls, minor design changes to improve the final finishes of the project and removal of historic building material waste, which was deemed hazardous.

"Newcastle Ocean Baths remain on track to reopen this summer," the spokesperson said.

Daracon has brought on additional staff to resource both the South Newcastle Beach upgrade and ocean baths project.

The company was appointed to finish the Bathers Way and skate park works following Lloyd Group collapsing into administration in March 2023.

City of Newcastle said Daracon was approached for pricing on the South Newcastle Beach project based on the company ranking second in the original tender process.

"An external quantity surveyor was engaged by staff to review Daracon's cost estimate and will remain engaged to ensure value for money for the remainder of the project," a council spokesperson said.

"The quantity surveyor's view was that undertaking another open tender process was unlikely to result in a better price but that it would delay the completion of the project by four to six months.

"The estimated cost for Daracon to complete the project is just under $11.5 million excluding GST, which reflects the increased cost of labour and materials experienced nationwide since Lloyd Group commenced on site in 2020."

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