EXCLUSIVE: The Fyles Government has refused to say what it will cost to build the new Darwin city art gallery, which in June was projected to cost $50 million, but appears to have now blown out to about $80 million, as part of the Civic and State Square redevelopment, which has also seen major cost blowouts.

The overall State Square project started out at about $20 million but has now blown out to more than $200 million, based on previous figures provided by the Territory and federal governments.

Infrastructure Minister Eva Lawler and Arts and Culture Minister Chansey Paech issued a joint press release on Sunday to announce local builder Sitzler had won an $88 million contract to construct the new art gallery and plan “all the remaining design elements of the precinct”, but did not specifically say how much the gallery would cost.

They gave the information exclusively to the Sunday Territorian before the public release, with an article published on the front page of the paper without the actual cost of the art gallery or any scrutiny into the total cost of the project.

The press release said the planning and design part of the contract was for “all remaining elements for the precinct” which it said “included” four features: a tropical tree walk along Smith St, event lawns, the ‘Central Heart’ – which is a shaded area with a water feature – and forecourts with water-features outside Parliament House and the Supreme Court.

It is unclear what “all the remaining elements of the precinct” actually encompasses, as the masterplan also shows the major Darwin bus interchange in Harry Chan Ave will be removed, and will be replaced with multipurpose buildings and landscaping, along with other landscaping works across the precinct, including other water features and sculptures, as well as another building for an unspecified purpose behind the Anglican cathedral, and a screen tower and billabong garden.

Industry sources said it would be unusual for such major works to be included in the design contract but not mentioned specifically. Those other elements may form part of another stage of the redevelopment that lies outside the figures quoted.

Ms Lawler and Mr Paech did not respond to questions about the cost of the gallery, but in a media release in late June, Ms Lawler put the cost of the art gallery at $50 million.

Multiple construction industry experts told the NT Independent the design for the four other elements would run between $5 and $10 million, but it was hard to give an accurate figure because there were different models for how companies would be paid for their work.

To provide context for how much it could cost, while the government did not publicly announce the gallery design cost when they issued a press release in 2020 announcing Ashford Group won the contract, the tenders page show the design contract was worth $2.9 million.

If the latest design contract was for the four elements and some smaller works, none of which are actual buildings, and not the other major elements listed in the masterplan, the total cost of the gallery could be between $78 and $83 million, which is an increase of roughly 60 per cent in less than five months.

When announcing the tender for the remaining works in June, the government said they were going to spend $145 million for the design and construction of all those elements, leaving $95 million for the works outside of the gallery.

There has already been $26.7 million spent on the underground carpark, $2.8 million to demolish the Chan building, $7 million for a contract awarded in 2019 to move the NTG computer centre that was housed in the building, $500,000 for a “masterplan”, and other money spend on awarded tenders to contractors for a variety of associated works since 2018.

In July last year, the tender for the design of the art gallery was awarded for an undisclosed sum, while in April the government awarded a $305,000 tender to Clouston Associates for the design of “Liberty Square”, which is yet another part of the redevelopment, which sits outside the four elements mentioned in the latest press release.

The government has not said how much it estimates it will cost to complete the rest of the State Square and Civic Park redevelopment, but based on previous Territory and federal government figures, the cost could be well over $200 million.

ANALYSIS: Civic and State Squares costs balloon to close to $200m from original $20m announcement

The government has also not explained how it will fund the running of the art gallery, including the purchase of any art.

The Museum and Art Gallery of the NT, Darwin’s main art gallery at present, is principally funded by the NT Government with funding cut by 11 per cent over two years beginning in the 2019-20, financial year, or $848,000 in total. An MAGNT spokeswoman previously said they had been told to expect less in funding every year thereafter.

In January last year, then-acting arts minister Kate Worden told the ABC the reduction was part of “a range of fiscal reforms” to manage the government’s debt.

In May, then-chief minister and treasurer Michael Gunner said net debt was projected to reach $8.7 billion by the end of this next financial year, down slightly from previous projections, while the budgeted deficit for 2022-23 would be $1.1 billion.

In March, the government also put out a tender for the development of a masterplan that could see up to $100 million spent on the MAGNT over 10 years to update and expansions which would presumably increase its running costs.

The NT Independent revealed in May that the Auditor General found in a March report that the government had not implemented many of the budget repair measures it had pledged over the last three years and had no effective way of measuring whole-of-government savings or if it could ever get back to a sustainable financial position.

The total cost for the redevelopment

Sunday’s press release stated that the “revitalisation formed part of the Territory Government’s historic Darwin City Deal, delivered in partnership with the Australian Government and the City of Darwin, with $145 million allocated to transform the precinct into a welcoming and interactive green heart of the CBD”.

However, from what has been previously announced, the Federal Government and the City of Darwin are putting money into the $200 million City Deal, but not the State Square and Civic Park project.

The statement also appeared to suggest the $145 million figure was the total for the project, however, the previous June press release stated that $145 million would be spent on the next round of works.

The redevelopment was originally announced on April 24, 2017, as part of the bigger City Deal on which the Federal Government would spend $100 million, with the Territory Government saying it would also spend $100 million over four years. Based on a breakdown of proposed projects, the State Square and Civic Park component would have cost about $20 million.

While a later tender document stated the Territory Government would spent $165 million over five years on the the State Square and Civic Park project, the Federal Government’s 2021 City Deal progress report published last November showed there was $194.5 million the then-Gunner government had already spent or allocated for works on the Civic and State Square redevelopment.

With a reasonable assumption of the extra cost for the art gallery, that would put the total cost at around $225 million, with potential for increases in the construction of the four elements included in the last design tender, and the other elements of the projects that have not been put out to tender yet.

It took more than three years for the Territory Government to put out a tender to create a business case for the project, which only came after it had already spent close to $40 million. The tender for the business case was awarded to Deloitte for $265,000 through a private select process rather than through a public process.

Ms Lawler and Mr Paech did not respond to a request for a copy of the business case for the project.