Monday, 28 September 2026

Three of Sydney’s most visible aquatic redevelopments have become case studies in how local government contracts can come undone. North Sydney Olympic Pool, Willoughby Leisure Centre and Epping Aquatic Centre have each generated headlines for budget blowouts, delays and disputes. Beyond the headlines are lessons that every council can apply to its next major contract.

Three Projects, One Pattern

North Sydney Olympic Pool was originally budgeted at around $58 million. By February 2024, the construction contract had risen to $91.8 million, and the Council set a total project budget of $122 million. As reported in the North Sydney Sun, by February 2026, the project had generated 701 variation claims, with 116 still unresolved, and the practical completion date remained undetermined nearly five years after construction began. Builder Icon has filed a $28 million Supreme Court claim alleging close to 300 design modifications drove the blowout.

Willoughby Leisure Centre followed a similar trajectory. When Willoughby City Council confirmed that the budget rose from $38.9 million to $65 million, a 67 per cent increase, citing a change in scope driven by latent site conditions including asbestos and inadequate substructure. The site sits on a former landfill, and 263 new piers were required after the existing piers were found to lack the required bearing capacity.

Epping Aquatic Centre is a further example. The City of Parramatta tendered the $26 million upgrade in March 2024, but tender responses came in well above budget. The Council subsequently resolved to spend approximately $13.5 million on a limited interim reopening rather than proceed with the full scope, with partial reopening now slated for 2027.

Why These Contracts Went Wrong

Design and scope were not stabilised before construction began. At North Sydney, hundreds of design modifications and a structural roof redesign cascaded through the program. Locking in the design before the contract award is a basic discipline; where this is not possible, the contract model must accommodate change without destroying cost certainty.

Due diligence on existing assets and site conditions was inadequate. Willoughby’s substructure and contamination, and Epping’s overall asset condition, were not sufficiently understood at the tender stage. The cost of intrusive investigation is trivial compared to the cost of discovering these issues mid-contract.

Risk allocation did not match the actual risk profile. Variations are the symptom; the underlying cause is usually a contract that allocates risk to the party least able to control or price it. A council handing a contractor a fixed-price contract on an unstable design has effectively guaranteed a variation claim.

What the Regulators Are Saying

The Audit Office of New South Wales, in its Local Government 2025 report, reiterates that strong governance is fundamental to the successful delivery of infrastructure projects, which are complex, long-running and capital intensive. The same report notes that financial sustainability depends on revenue covering expenses over the longer term, an outcome that capital cost blowouts directly threaten.

The Office of Local Government requires councils to undertake a capital expenditure review before committing to any major capital project, to ensure proposals are evaluated consistently and rigorously. Where this review is treated as a formality rather than a genuine decision gate, the consequences appear later as variations and disputes.

Five Practical Lessons for Council Contracting

• Invest in pre-contract investigation. Geotechnical, structural and hazardous materials investigations should match project risk, not budget pressure. The cost of finding out later is always higher.
• Mature the design before tender. Where the design must continue after award, choose a delivery model that accommodates this, such as early contractor involvement, rather than forcing lump-sum pricing on an immature scope.
• Allocate risk to the party best placed to manage it. Latent conditions, design coordination and authority approvals sit naturally with different parties. A well-drafted contract reflects this.
• Govern variations actively. When variation claims pass a defined threshold, the project needs senior intervention, not another report. North Sydney’s 701 variation claims as abovementioned should be considered governance failure as much as contract failure.
• Brief councillors and the community honestly. Optimistic public statements at the outset create reputational risk later. A realistic contingency, openly disclosed, builds trust when circumstances change.

Public works engineers and council contract managers sit at the centre of these projects. Strong contracting capability is not separate from technical capability; the two mutually reinforce each other. A council that invests in the procurement and contracting skills of its asset, project and engineering teams will deliver better outcomes than one that treats contracting as a back-office task. 

In the deep end is where these projects ended up. With the right capability, they need not start there.

About the Author

Paul Vorbach is the Managing Director of AcademyGlobal, a Sydney-based capability development firm established in 2004 and the CIPS Centre of Excellence for ANZ. Since 2005, Paul has trained contract management, procurement and supply chain professionals across over twenty centuries in five continents. He is Vice President of the Institute of Strategic Risk Management (ISRM) ANZ, Treasurer of the Society for Risk Analysis (SRA) ANZ, and Adjunct Faculty at the Australian Graduate School of Management (AGSM) at the University of New South Wales.

AcademyGlobal partners with public sector, private sector, and not-for-profit organisations to build the capability that underpins sustainable delivery performance, and is the Chartered Institute of Procurement and Supply (CIPS) Centre of Excellence for Australia, New Zealand and Asia.