Construction on the first projects to start under a three-year program to remove combustible cladding from 225 high-risk apartment complexes in NSW will kick off around the middle of the year, the government in that state says.

In an announcement last week, NSW Minister for Better Regulation Kevin Anderson unveiled details of the state’s cladding rectification scheme which was announced in last October’s budget.

Labelled Project Remediate, the three-year program aims to remove combustible cladding from 225 Class 2 buildings (apartments) which have been confirmed by the NSW Cladding Taskforce as being clad in high-risk flammable material.

It will be overseen by the Office of Project Remediate, which has been established within the office of the NSW Building Commissioner and will establish and manage the program.

The program has three parts.

First, an interest free loan scheme will assist owners to meet the financial burden associated with rectification.

Unlike the cladding rectification scheme in Victoria, owners of apartments whose buildings are rectified under the NSW scheme will still need to pay the costs associated with rectification for their building.

To assist these owners in meeting the financial burden, however, the government will establish a new loan scheme under which owners will be able to access interest-free loans to pay for the rectification.

Under this scheme, the government itself will cover the cost associated with the interest component of the loans.

Owners will still need to cover repayments for the principal component of the loans.

Repayment of the loans will commence upon completion of work.

Provisions will be made to accommodate owners who experience financial hardship.

Next, to help ensure high-quality outcomes, a new project assurance service has been established to work with and assist owners corporations to manage rectification projects.

The service will provide expert advice at each stage of program risk assessment, product selection and design decisions.

It will also appoint a managing contractor to oversee construction work on each project.

All this will be free of charge and will be coordinated through the new Office of Project Remediate.

Finally, a Principal Designer will also be appointed to provide a source and repository of design expertise throughout the program.

Project designers will work with the Principal Designer and building owners to provide suitable designs for the remediation of each building.

Detailed scoping and design work will be carried out before each project commences.

This will allow building owners to benefit from the certainty associated with a fixed price contract and will minimise the risk of cost escalation.

Both around the world and in Australia, problems associated with flammable cladding on buildings have generated public attention following the 2017 Greenfell fire in London along with the earlier Lacrosse fire in Melbourne.

In its most recent update on 18 December last year, the NSW Cladding Taskforce said it had inspected 4,127 buildings – 3,749 of which had been cleared and 378 of which required further action.

Of those buildings requiring further action, 219 are residential apartment buildings (Class 2 buildings under the National Construction Code).

Of these, 81 are high-rise (9 storeys and above), 132 are mid-rise (4 to 8 storeys) and 6 are low-rise buildings (1 to 3 storeys).

In a statement, Anderson said the program would help to fast-track efforts to make buildings safer.

He added that the program would assist with the state’s COVID economic recovery and would generate up to 3,500 construction jobs in the hard-hit apartment building sector.

“Under the program design developed since the 2020-21 NSW Budget, I can confirm that by 2023 the Government expects to have helped safely remove high-risk combustible cladding on an estimated 225 buildings across the State,” he said.

“This is a significant, complex project. In order to make it as easy as possible for Owners Corporations to take advantage of this program and get this work started, we have invested up to $139 million to set up a project assurance service that will be coordinated through the Office of the NSW Building Commissioner.

“We will also help take pressure off Owners Corporations by appointing a managing contractor to oversee each individual project from design to final completion, to help get buildings remediated quickly and to the highest standards.”

Owners Corporation Network Executive Officer Karen Stiles welcomed the package but added that the support provided should be extended to owners corporations of other buildings outside the program who are grappling with flammable cladding.

“OCN welcomes the 10 year no-interest loans to those buildings deemed high risk,” Stiles said.

“Also, (we welcome) the support provided to those owners corporations in executing the loan agreement, including provisions to accommodate and protect owners who may experience financial hardship.

We also welcome the technical support being offered to those buildings as part of the support package.

“What is not clear is if that technical support will be made available to all the other buildings trying to grapple with the complex task of cladding (and underlying defects) remediation.

“The government simply cannot abandon those owners.”

Expressions of interest for the appointment of both the managing contractor and financial partners for the scheme are open until next Monday.

Owners of affected buildings will be contacted directly and invited to register their interest – applications are expected to open around March.

Over the coming months information packs, guidance and training materials will be delivered to help Owners Corporations navigate Project Remediate.

The Office of the NSW Building Commissioner is consulting with the strata sector as part of this work.