Asbestos fragments in the ground at the Helensburgh mountain bike park came in with red clay soil used in the building of the jumps at the site, Wollongong City Council (WCC) has said.
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The council will this month remove all the affected soil at the popular jump track, which has been closed since last May when the asbestos contamination was first discovered.
The latest developments in the northern Illawarra town have come as the NSW Government set up an Asbestos Taskforce to investigate the ballooning incidence of asbestos in mulch used in public outdoor projects including schools and parks.
The Helensburgh Off-Road Cycle Club, which runs the park, insists the fill brought into make the jumps had been tested, and has argued the asbestos may have been put there "maliciously" by people opposed to the bike track's existence.
But the council has for the first time given clear advice about how the asbestos got there.
WCC said the certification provided by the club referred to virgin excavated natural material - VENM - which this fill was not. Instead it contained construction waste including brick and tile fragments.
"Helensburgh Off Road Cycle Club are required to provide soil classification documentation to Council to confirm any material brought to site is Virgin Excavated Natural Material or VENM," a council spokeswoman said.
"The club's representatives have provided council with soil classification documentation for Virgin Excavated Natural Material.
"The non-friable bonded asbestos containing material was identified in the red clay material imported to the site by the Helensburgh Off Road Cycle Club to construct the majority of the site's bike tracks.
"This imported red clay material is contaminated with asbestos containing material and other forms of construction and demolition waste including brick, tile and terracotta fragments, which is not consistent with VENM."
The council had been conducting regular inspections and found asbestos fragments across the site, including in areas where jumps and berms were not constructed with the red clay material.
"During weekly inspections, fragments of asbestos containing materials have also continued to been found on the soil surface at other parts of the site where the clay material was not used," the WCC spokeswoman said.
The park had been built in stages, with noticeably different fill material used for later work.
Helensburgh Off-Road Cycle Club president Wayne Teal on Tuesday told the Mercury that it had provided certification for the soil - but the council had not been satisfied with it.
"All that stuff has been certified - it gets ticked off by a geotechnical engineer," he said.
"They're saying certification wasn't up to their standards yet it was passed by their professional people," he said.
"But that's neither here nor there ... what's done is done.
"We have to accept the umpire's decision. We have to work with the council to try and get the track back up to being attracted as quickly as possible."
He said they had "no idea" how the asbestos arrived.
"It was maliciously placed ... we have some opponents against a track in Helensburgh who obviously thought this might be a fun thing to do, I guess."
Mr Teal said he was pleased there would soon be a "light at the end of the tunnel" and the track could be rebuilt and open up again.
"The economy has taken a massive hit - people come from all over the place to ride on that track, so that the economy keeps going.
"Remember this is a track that's been predominantly built by the hands of volunteers."
The council said last week it was protected against asbestos problems like in Sydney because it produces the vast majority of its own mulch for use in parks.