The mayor of Regina is defending the latest estimate attached to a major waste-water treatment facility planned for the city.

Questions arose after it was learned costs for the sewage treatment plant upgrade could hit $238 million, tens of millions more than was originally expected.

But Regina's mayor, Michael Fougere, said the first estimate had to be adjusted for inflation and other cost factors.

"As we move forward, the costs are more clear," Fougere said. "The report we have before us is really an update of where we're at with the project and what those costs could be."

Construction on the upgraded system is set to begin in 2014 with a target finish date of the end of 2016, in order to comply with new provincial waste-water standards.

"We have until December 31st of 2016 to meet provincial guidelines and we must do it," Fougere said. "It has to be done."

A previous projection, from several years ago, pegged costs at $153 million plus or minus 20 per cent.

The latest estimate puts the number at $207 million, plus or minus 15 per cent, based on construction starting in 2014 and completing in 2016.

At the high end, that would put total costs at $238 million.

The city is paying for it by borrowing about $150 million but also through the 9 per cent annual increases to water and sewer bills that have been underway since 2008.