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PM Key says no one knows how much final quake damage will cost, as overall bill rises toward NZ$25 billion and bad news keeps coming for EQC

Insurance
PM Key says no one knows how much final quake damage will cost, as overall bill rises toward NZ$25 billion and bad news keeps coming for EQC

No one knows how much the damage caused in Christchurch will eventually cost, but the government's balance sheet is still in a strong position to pay its part of what could be a NZ$25 billion bill, Prime Minister John Key says.

The government's bill for the earthquake took a double hit last week, when Finance Minister Bill English on Tuesday released new estimates from the Earthquake Commission showing its costs had more than doubled to NZ$7.1 billion, wiping out the EQC's NZ$6 billion disaster fund.

That was compounded on Friday evening when the High Court made a ruling against the EQC, meaning homeowners could receive multiple claims of NZ$100,000 in the same year - a decision that could carry a bill worth hundreds of millions of dollars.

With estimations for the overall cost of the quakes rising to around the NZ$25 billion mark from NZ$20 billion previously, Key said the government was still in a strong position. Key's Cabinet is meeting in Christchurch today to discuss the damage, costs, and rebuilding efforts.

The EQC High Court ruling was a good news-bad news story, depending on how it was looked at, Key said on TV1's Breakfast programme this morning.

“The bad news is it means EQC’s liability is rising, and we don’t know by exactly how much, but it’s hundreds of millions of dollars," he said.

"Secondly, I guess from the good news perspective, it may give some more confidence to private reinsurers to stay engaged with Christchurch – that’s one of the big issues, is making sure that people actually can get insurance and that’s been quite tricky, depending on your circumstances."

“At the end of the day, we don’t really know the total cost of this thing. Is it NZ$20 billion? Is it NZ$25 billion? No one’s entirely sure. It’ll be over a reasonable period of time," Key said.

"All I can say is that the government has a very strong balance sheet – one of the reasons we’ve worked very hard to not allow debt to blow out is because we need to be able to pay for these things. Budget 2011 as you remember, was a zero budget, despite being election year, to provision NZ$5.5 billion for Christchurch. So I’m confident we’ll get through it," he said.

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84 Comments

Why is Govt paying, not insurance companies?  Why would you need insurance when you have a Govt?

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Agreed..once this thing is done with...perhaps EQC needs to go and the private sector fill the gap

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Because the EQC was and is essentially a subsidy for the insurance companies industry which is why back in the 90's so many of us were dead against the concept knowing full well insurance companies would use it as a cop out. 

The issue was no one was prepared to insure the 'land' as this liability for insurance companies was just to risky to their 'profit making' goals

Levies are just another name for stealth taxes after all 

The whole insurance system  is a crock. They make damn sure in most cases that by the time you make a claim you would have paid the same if not more in premiums PLUS the interest that is generated in their coffers and not yours.

The basic lessons in life apply:  shit happens to stuff so try not to accumulate  to much of it  

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I agree insurance is a scam.  How can it not be, how can an insurance company make a decent profit if it has to pay out more then you give them.  If that was the case Warren Buffet wouldn't love insurance companies so much.  There are some mutual groups, that technicaly can't make profits, which is closer to the original format of insurance then the well known companies of today.

If insurance companies can run at profits, why is the taxpayer bailing out the EQC, is this beast to dumb to asses risk?  Increase the levies, make those with the risk pay for the risk, I'm sick of bailing out, and subsidising people that should have no right to my money.  I don't mind paying taxes for roads, hospitals, schools and social welfare.  It winds me up when fat cats get my money.

It's ironic that my taxes are going toward bailouts, and the Govt wants to sell oil, to pay for the roads.  Leave something for my children to exploit.

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"All I can say is that the government has a very strong balance sheet"

Isn't it time the media started to question what is actually behind that supposedly "strong balance sheet"?

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NZ$220 billion worth of 'assets' Colin - SOEs, schools, hospitals, national parks, roads.

Which means...we can sell off a s**t load more when we need to.

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I think you forgot to mention liabilities.

Total crown net worth June 2008: $105,514 million

Total crown net worth June 2009: $99,515 million

Total crown net worth June 2010: $94,988 million

Forecast crown net worth June 2011: $85,519 million

How much have revised liabilities in christchurch eroded crown net worth since June?

The full year accounts to 2010 (the latest available) include assets of:

Rail network: $12.5 billion

Student loans: $7.0 billion

Buildings: $24 billion

So why aren't we selling 49 percent of the rail network instead of power generation capacity? Because it is not worth anything like $12.5 billion. Student loans - the same. Ditto those buildings.

Landcorp at a guess is on the books at $1.5 billion but makes a miniscule return on assets. What then is it really worth?

Does NZ have a very strong balance sheet, or is it disintegrating fast?

Last full year financial accounts (to June 2010) which provides some asset valuations:

http://www.treasury.govt.nz/government/financialstatements/yearend/jun10

Monthly for May 2011 (last available):

http://www.treasury.govt.nz/downloads/pdfs/fsgnz-11mths-may11.pdf

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But to who, Alex? Firesales never realise the full value of an asset.

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Yes but who cares? (look what Prebble did last time)  this is political ideology (and the desperation will come to do it). So sell the schools to a private contractor who then leases them back at a hefty margin....if nothing else the land is usually in desirable build locations....if the school cant afford pay, bye bye kids and build on it......also they often have sizable playing fields, a contractor can build on say 1/3rd and get quite a bit of the money back....the rent/lease fee is a guaranteed monopoly....

This works fine until the ppl revolt and we get a far left Govn who Nationalises everything back (listen to Matt Mccarten etc etc for that)   JK will be living in Hawaii by then....or someone will have strung him up from a  lamp post depending on his luck...

regards

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Well that's the good news. We don't know how much Christchurch is going to cost us. And now the bad news. How much will Wellington cost? If Christchurch could cost $25b...... well you do the math.

We need to be scrambling as a country, as fast as our little hobbit feet can carry us, to be prepared for an 8 magnitude quake in Wellington.

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Any thoughts what climate change and environmental damage and its consequences costs societies ?

Welcome to a new, far more complex world.

http://www.independent.co.uk/environment/climate-change/annual-cost-of-…

 http://costsofclimatechange.org/

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If you believe John Key, stop worrying - we have "a very strong balance sheet".

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 Correct - government policy = absolute growth – no matter how – e.g. more digging, more dairy cowing, more, more - adding more problems – going around the circle.

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Climate change and environmental damage are theoretical constructs that may or may not come to pass. Furthermore, there may or may not be any direct consequence to New Zealand if they do. There is nothing theoretical about an earthquake hitting Wellington however, nor in its consequences for the country when it does.

Your response, Kunst, is entirely what I expect from a foreigner, and illustrates perfectly the dangers of immigrants bringing their agendas from foreign homes with them, and then attempting to shove those agendas onto the New Zealand landscape. I hope people can see why it is so important that Kiwis who were born and raised here, who have knowledge of its lore and laws, are the people best suited to run this country.

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Absolute bollocks.....the KKK would be proud of you.....

Lore?  you mean fantasy.....mystical beasts and other crazy things? so  beliefs in invisible non-existant beings and things trump science and logic, especially if it comes from someone such as yourself?

LOL.....

Fortunate indeed that most NZers are actually balanced ppl and not racist fruity loops....

regards

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And remind us all again what country you were born in, Steven?

Science, Steven, it's a wonderful thing! I feel sad for you that you know nothing about it.

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Where I was born does not matter to any reasonable NZer....a NZ citizen is a NZ citizen.......so lump it.  never mind when you are at the ballot box in November try not to get too upset thinking about my vote being cast by me.......

Science, well its pretty obvious if you had any ability in that area (and Ive seen none so far) its long been suppassed by your extreme political, bigoted and racist outlook...canceling it out.....

For me my engineering and science dictate how I vote and act....way more sensible than believing in fairies.....or "lore" if you will.

regards

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Based on your overall mastery of science as evidenced by what you write in here I can only assume that you were a poor student with low, quite possibly marginal grades.

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LOL yeah right..... I see nothing that makes you fit to judge my degree of science or engineering capabilty......quite the opposite in fact.

regards

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Steven, Doctor David has previously declared his qualifications and areas of expertise. What is yours?

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He has?  where did he say what his quals are in? he implies a PHD? in what? I must of missed that....but of no matter....

My quals are for my benefit, they assist me in making logical choices based on the evidence/work of others....you can use what is at your disposal to make yours....

You ask the wrong question....its not a Q of me v him.....as final proof for the reader in here to believe he or I......

The science Im quoting and reading has more than enough PHD's, professors and other experts to back it up. If you want to deny the science or position it is one for you to decide based on the information provided by experts.

So really you are just trying to shoot the messenger....but then that isnt a surprise.....

regards

 

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In other words, Steven, you don't have any formal qualifications nor training in science then, do you? Comes as no surprise to me.

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Actually I do....

but then that wouldnt matter to you anyway would it?  Even a

Albert Einstein

wouldnt be believed in your case...and some others in here...

and like I said the science and the scientists are out there and have quals in abundance and you dont believe those either......so whats one more person you wont take note of.

regards

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Shoot the messenger ?

You mean like you and your climate change/global warming/whatever you call it these days buddies do whenever anyone has an opinion that doesnt agree with yours ?

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Opinions are fine....however lies are not. This is the difference, on the pro-AGW side there are a lot of scientsts doing science, on the anti-agw side there are a lot of politicals doing politics...or voodoo economics...

After all make your own mind up...

regards

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The "scientists" at East Anglia got caught lying through their teeth

Al Gore is a politician doing politics and filling his own pockets quite nicely at the same time.

....how does that reconcile with your argument above ?

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perfectly...

There is nothing in the East anglia emails of consquence, that has been proven to any reasonable person IMHO....despite investigations, etc etc...the only illegal action was the break in and data theft...of the emails...

Al Gore is an ex-pollie talking about AGW with the agw scientists behind him as the qualifications, he's a presenter, nothing more.

Al gore puts his money where his mouth is and invests in Green tech, prefectly acceptable and sane.  Otherwise he could win could he...if he didnt invest he'd be called out....so its an attempt at head I win, tails you lose...

Like I said, reasonable ppl will make reasonable deductions on the evidence and science...the rest on the fringe of "politics" probably wont.....

regards

 

 

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Can you get me some of whatever you're smoking ?

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Implies? Don't think so. If you search back through the archives you will find they were spelt out quite clearly.

Should you search further you will find a comment where I state a colleague of mine has a doctorate in one of your favourite areas of interest. His qualifications are fully detailed. A specialist in the topics of oil and petroleum and nuclear energy he disagrees with many of your conclusions.

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Don't worry about it, iconoclast. While it was written in direct response to PDK’s ravings, that sort of person and Steven too, only ever read, take notice of or remember pieces that agree with them. And it’s that which differentiates a truly educated and informed person from an uneducated uninformed one in my view. Anyway Steven and kunst have been indulged enough today. Let's let the topic return to a discussion on the earthquake.

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Oil and nuclear energy? together? some quals those as a pair.

My  conclusions?  which ones?  pray do tell Im all for amusement this evening.... These are not mine really but conclusions drawn from places like ASPO. I guess they are mine as synopsis of these pieces of work.....Im not aware Im saying anything that consitutes original research by me in the field of oil, energy, agw. 

Some thoughts that are mine in particular around nuclear is it simply makes no sense from two main areas;  economic ie cost to build, run and dispose of totally safely.....For instance the practice of storing spent fuel rods inside the nuclear plants in japan I regard as criminally negligent....but that is my own opinion.....time scale and scale....it takes on average a decade to get a nuclear reactor on line....it simply as a solution wont scale to the number we need.....ask your friend for a comment on the 2010 red book....

regards

 

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has he?

It would have been the firat piece of concrete information he's ever volunteered.

Pity I missed it.

And, Iconoclast, given our private exchange of a few months back, you don't exactly ring true, either. Either you 'get' Peak Oil (and peak everything finite) or you don't. If you get it, DavidB is clearly hokum. If you don't, you weren't exactly being straight with me.

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PDK: It did not go un-noticed last week that steven re-defined peak-oil as peak-crude-oil.

Your view?

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He did ? Whereabouts IC...i missed it.

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KTF: Here you go - about quarter the way down the page

http://www.interest.co.nz/news/55112/energy-minister-parata-says-nz-can…

by steven | 30 Aug 11, 2:09pm
Peak oil is refered to as Peak crude oil production

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No, I have not "re-defined it"....Peak oil has always been Peak Crude oil output. The fact that you have never noticed the difference does not change that.

So maybe I will do so again,

Peak oil is peak crude oil output/production and that date was probably 2006, it certainly has not been been exceeded in the last 5 years.  If it is to be exceeded then 2012 might be it....but the odds are fairly long....and very long after 2012.....

Peak All liquids stands as (july?) 2008, that output is crude plus condensate gases, that has not been exceeded in 3 years. The condensates component might be exceeded in 2012 or any time again before 2018, but thats pretty unlikely...

So we are on an un-even plateau....a small increase in any one year or different interepation of the numbers gives rise to different dates by oil geologists.

In context, if you are going to be alive anything more than about 5 years it will make a huge difference to the rest of your life, be it 10 years of 70....whether it ws 5 yaers ago or in the next 5....doesnt really matter too much.

regards

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PDK: I get it all right. (From my perspective) there is a problem with the definition of peak oil.

Wikipedia and many other references refer to peak-oil as the moment of terminal decline in the rate of extraction. I am advised that there are enough oil reserves available that that rate of extraction can and could be artifically ramped up at any time. Basic extraction rates are mis-leading. However if you were to refer to peak-oil as the NET-extraction rate where if 30 years ago it required 1 unit of oil to extract 10 units of oil, net of 9, while today it requires 4 units of oil to extract the same 10 units of oil, for a net of 6, then terminal decline commenced some time ago.

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Advised by whom? because that isnt true from what I can read. URL?

First thing there is a difference between oil reserves and oil flow....Peak oil is the maximum oil flow rate, not how much oil is left (which is about 1/2) which is the reserve.

In terms of ramping up production most oil wells are run as fast as  sane to do so....The main technique to force oil out is water pressurisation, but we have a problem, oil moves through the rock more slowly than water, so if you pump water in to fast you bypass the oil and ruin the well....apparantly the Saudis have done this to Ghawar......so the end result will be a lower total extraction amount when the field finally expires than if you had taken your time. When you ruin wells it also means you have to drill replacement wells, they cost millions.....so its not without costs...

The new super deep offshore wells are as bad as 3 to 1.....so its a robbing of peter to pay paul.  Otherwise our society/economy needs about 10 to 1 or maybe as low as 8:1 to function.....The first wells had 100:1, by this method we have been in terminal decline since then.....Ive not read anything that mentions measuring it this way....URL please?

regards

 

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Icono - near enough.

Yes, you can ramp a gaussian post-peak, but of course, you are taking it from the tail, so the decline gets steeper as you do so, trending to the vertical.

You also have to build infrastructure to do so, which won't see any kind of economic life.

DavidB doesn't (want to publicly) get that - why your support for a spinmeister?

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PDK: My guy reckons most (many) abandoned or capped wells are mothballed and still half full, so infrastructure is not the issue. Cost is.

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The wells are abandoned.   Yes in effect they still have about 50% of the original oil in place still there but its so dispersed as to be unrecoverable.......infrastructure is in effect cost or energy....there isnt the technology to extract the oil right now....not at an economic benefit rate anyway.....maybe in the future some bright spark will think of something but bear in mind a good well produces 3000+barrels a day, the stipper pumps could be doing 2 or 3 a day.....the economics of scale just suggest its never going to be extracted.  I would suggest reading more there is a huge amount of info....

regards

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 David, New Zealand is home to you and me.  

http://www.cost869.alterra.nl/Nottwil/Kessler.pdf

see 22/ 23

…and our NZlakes and NZrivers ? We all have to defend values for a better New Zealand. So, why not learn from other cultures, which made mistakes earlier and accept advice?

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And what mistake did Switzerland make about earthquakes then, Kunst? Or should we be learning how not to allow our banks to cynically profit from stolen Jewish wealth? Or are you in fact actually saying we should learn how to do that? I’m confused by your comments Kunst, since you seem to be saying that there is nothing unique in the narrative of individual nation states. But what applies in one country applies to them all.

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 Sorry David –  twisting, derailing and like so many times before, deviating from the subjects – you aren’t a valuable debating person for me and as you say rather confused. So, I better leave it - bye !

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Deviating from the subject, kunst? Gee talk about the kettle calling the pot black! Correct me if I'm wrong but this thread is about the cost of the Christchurch earthquake. And who began rattling on about climate change and pollution as though that had something to do with it. Why of course, kunst, it was you!

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 David - next to natural disasters earthquakes as you mentioned, environmental pollution, and climate change are all contributing to enormous costs for societies, which in my opinion are underestimated by far – even by professionals – the reason why I included them. So after all, my comment is a reasonable fair contribution to the issue.

 ..and have a read again, what you have done to the topic with your 2-3 previous comments in comparison !

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Agree..

regards

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At about 4 DegC rise society is gone......at 6.5 Deg C rise temp rise (about 2150~2200), extinction of the human species (and many others) is very probable....as a super warm period kicks fully in....that could last 100million years.....then it will switch off and after some more 100's of millions of years our replacements will pre-ambulate across the scenery and enjoying us as fossils....

regards

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That's really funny. Thanks for that.

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... at the  current rate of  " cash burn " , national super will run out long before the 100 million years are up ...... so we needn't sweat the " global warming " stuff after all  ...

Bless the demographic bulge of retiring baby-boomers !

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FYI a Kaipoi housing development has been blocked. Some Cantabrians are very grumpy about it. HT Hugh.

http://www.stuff.co.nz/the-press/news/christchurch-earthquake-2011/5562…

A proposed development in Kaiapoi that could provide hundreds of houses for quake-displaced residents is in limbo after being granted only partial approval.

Residential rezoning for the 450-section Silverstream Estates proposed for western Kaiapoi was granted only conditional approval on Friday by commissioners appointed by the Waimakariri District Council.

The conditional approval requires a site to the eastern edge of the proposal to be developed before Silverstream Estates can go ahead.

Scheme developer Fred Rahme, of H-Investments, said the decision on the 51-hectare site was "bureaucracy gone crazy".

"It's almost as if the earthquake hasn't happened," he said.

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What does the HT mean please?  This has been driving me nuts.

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The Meaning of HT HT means "Hat Tip (Thanks)

 

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Thanks, I would never have guessed that.  Thats a real load of my mind.

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Bernard, this development SHOULD NOT go ahead.

It is on liquifiable soils on the former riverbed of the Waimak (drained in the late 19th century as a flood mitigation measure).

See page Chapter 2 page 9 of the GEER report (area marked green not the area not marked green that is included in the propsed site was formerly a swamp too [the hashed lines]):

http://www.geerassociation.org/GEER_Post%20EQ%20Reports/Darfield%20New%…

There was liquifaction on neighbouring land. In fact houses across the road were in Zone "B" in the Tonkin and Taylor stage 2 report.

The fact that it didn't have major liquifaction is not a particularly redeeming feature.  The risks associated with the land are high and putting conventional housing developments on this land is pure idiocy.

For more sheer idiocy take a look at Chapter 4 page 22 on the same link.  The lower photo is Halswell/Kennedy's Bush after Sept 4.  Just at the north of the frame is a large block Fulton Hogan are trying to rezone, liquifaction on the site was widespread in Sept, part of this site is already being developed and a much larger area is planned.

The reality is with literally thousands of houses set for demolition in "green zoned" areas plus massive population loss, there is no need for mass rezoning.

Head up the road to Pegasus (a couple of minutes north of Kaiapoi on the motorway) and you will see about 1,000 vacant sections.  A huge number are now for sale at substantial losses with townhouse sites from as little as $99,000 and full sites from about $130,000.  It is really a ghost town development with the "Mapleham" area of perhaps 200 golf course front fronting sections with just 2 completed homes and nothing under construction about 5 years after the development started.

If we are going to build on liquifiable soil, sort out the engineering first.  There seems to be this insane rational that if it's damaged it's unfixable and if it's not that it's fine, all irrespective of the shaking intensity that an area or building suffered or likely future risk.

So, so many stupid people making stupid decisions.

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Couldn't agree more.  If they're going to allow new building on land with subsoil equally as subject to liquifaction as that land they are abandoning - what is the point of abandoning the red zones in the first place?  I can only think of one reason: maintaining a media image.  Dumb decision on red zones can't be reversed - so you have to find something even dumber to do to compensate.

And the ring leader of this overall ineptitude keeps saying things like the country has a strong balance sheet.  Well it might have, had his lot not been elected in the first place.

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Sorry, but I'm not quite clear who it is that we are supposed to think is being stupid here - is it the developers who propose the development, or the council officials who are preventing it?

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Mainly the council officers, not because they are preventing it, but because they conditionally approved it.

The developer is also being stupid thinking he can sell riverside sections to people in Kaiapoi!

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Right. 

I take it that you're either an engineer or a geotechnical expert, and that you've seen all the geotechnical and engineering information that was available to the council officers, the developers and their advisers.

And there's no possibility whatsoever that different geotechnical and engineering experts, equally well qualified, might have different opinions and offer different advice on the basis of the same evidence? 

So the only possible explanation for somebody taking a different decision from the one you'd have taken is that they are stupid and you are not?

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Ms de Meanor

You are right I am not am engineer, however I have 15 years experience in property development in Christchurch, plus a Physics degree which included a number of engineering and geophysics papers.  I have also read numerous papers on geological formations in the Canterbury area and of course have been involved in many projects involving groundwork engineering and piling.  I also experienced first hand the effects of liquifaction and lateral movement in September, February and June.

Unless you have specific knowledge of this site, you are probably not aware of the risks.

It is an unfortunate fact that geotechnical "experts" often bring contradictary views depending on who is paying them (remember the Opuha dam).  One recent report I read on the "Prestons" development, essentially stated that the site wasn't at risk of liquifaction because none had been evident in any of the recent events, I would suggest that such reports are not helpful and failed to consider the relative variation in ground motion.  For instance the area of Avondale/Burwood between New Brighton Rd and Travis Rd had very little liquifaction in September when ground shaking was around 20% of gravity but had in February and June had significant liquifaction (now red zone) when ground motion was around 80% of gravity.  Indeed on those above mentioned sites, new homes were started after September with absolutely no greater engineering design than pre-September.

But back to the Kaiapoi site.  I have not seen reports for the specific site, however the area has characteristics that make it unsuitable for building on.

Firstly it is the old river bed.  Only the stopbanks and diversions built from the late 19th Century onwards actually prevent this area from being underwater.  In the event of a large earthquake involving uplift  on one of the many known faults in the area (we know of a fault at the Waimak mouth which ruptured with an M5.2 (March 1987), we also know of faults in north ChCh and around Waimari Beach) there is the risk of the banks failing and the possiblility of uplift to the river beds causing the area to flood (prior to those flood banks being completed the area routinely flooded in the early 20th Century).

Secondly the soils are mainly fluvial deposits.  Not unbuildable but more susceptible to liquifaction.  Even if they overlay river gravels the real risk to the site has to be lateral spread into the river (former north branch of the Waimak) which runs through the site.  There is clear evidence along this river branch of minor ground cracking, which those in the eastern suburbs of ChCh know well, forebodes future damage. 

The proposal to put dense residential on this land less than 20m from the river bank is not logical.  There is historical evidence that this land has not been considered suitable for development as the site has not been split into smaller blocks at any stage despite it's proximity to a sizable town.

Thirdly there was liquifaction on nearby sites with ground accelerations at around 35% of gravity.  As we know ground accelerations can get up to well over 100% of gravity even tens of kilometres from an epicentre of a large quake.  If we look historically we know that there was considerable liquifaction in Kaiapoi during the 1901 M6.8 Cheviot earthquake (although this was forgotten by the time it was developed in the 1970s).  Note that the closer 1922 M6.4 Motanau quake did not cause liquifaction.

http://docs.google.com/viewer?a=v&q=cache:dkkcOTlSPQsJ:db.nzsee.org.nz:…

Now personally I think houses could be built on this land.  However definitely not in the format proposed by the developer.

The site could handle larger lifestyle blocks of perhaps 4000m2 minimum with a 50m setback to the river, but the foundations would need to be well engineered and whether it would be worth developing the site to that intensity at all when there are better quality sites nearby is question of economics.  I would suggest that developing the land with a 1 ha minimum may be more appropriate (the current zoning allows a 4ha minimum). 

As a comparison similar land a few hundred metres away of 4ha size (with a more prestigious Ohoka address) has sat on the market for 5 years priced at around $270k +GST, so any intention of achieving close to $200k for 600m2 (which I understand was the developers intention) seems a nonsense anyway.

 

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Note that I believe any residential building on that site would need to be on raised platforms to allow excess floodwater to pass in an extreme event.

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I said in February the cost would likely be $30b as did others.  In all likelihood it will be above that now.

In regards, EQC being liable for more than one claim, this is terrible news for two reasons.  The first being that the Govt is now liable for billions more (not hundreds of millions JK) and second that EQC has not got the capability of assessing the current joblot let alone having to determine tens of thousands more claims that are all in the "too difficult" category.

EQC is already a shambles, Simpson should have been fired in November last year for incompetence, but he lingers on sinking not only his ship but the entire country.  John Key is responsible and should take the rap for this abject incompetence.

The Govt response is in lala-land.  First we get campervans, then temporary housing - both completely useless and unneeded, next we have mass abandonment of perfectly livable homes (are they insane?) and next on the list is mass rezoning of land in a city that was already vastly oversupplied with vacant land, that has had a huge exodus and lost a much smaller number of homes than people who occupied them!  Add to that the occupation of the CBD and the forced demolition of hundreds of of buildings and what we have is the ultimate in bungling.

John Key is personally responsible.

The cost of the High Court ruling in regards multiple claims is likely to be $3 billion more.

However this should all be good news for red zoners: If you had say $90,000 of damage after the first quake (repiling/foundations and decorating and other modest repairs only say) then you didn't get much more damage from the Feb quake and the private insurer deemed it repairable and therefore not a full replacement so you thought you were stuck with the lousy Govt offer, you may now get 2 or 3 EQC claims (and since they have to pay full replacement if you can't rebuild on your land) that $115k now might bump up to $205k for example and with your private insurer topping up say $20k for drive and fences plus maybe $20k for chattels from EQC suddenly the $245k for improvements is looking much better than taking the $120k improvement value on the GV.

Considering this and also considering that a large majority of red zone properties will be entitled to receive replacement payout, plus add in that probably 40% had GVs above market value and that maybe only 30% had GVs below market value range, it would have been sensible just to offer market value for the buyout as the extra cost would have been minor and the stress level for victims much less.

Instead they will be overpaying some and penalising others.  What unspeakable unfairness!  How could they possible come up with this kind of scheme?  Idiocy reigns.

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The EQC was set up before JK so I dont see it as reasonable he's hammered for it.......Im not sure on what basis its funding levy is based, care  to enlighten? It is in hindsight obviously inadequate, but many Govns have chosen not to boost it....not sure why you think Simpson should go.....would anyone else have done better consider the limitations impsed by Govn?

Govn liable, the EQC also has re-insurance cover, not sure how far that goes mind...

regards

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Steven, you obviously don't understand.

It's not the existence of EQC or it's framework that is the problem, IT IS EQC's PERFORMANCE AND THE GOVERNMENT'S PERFORMANCE.

Neither has got anything sorted effectively.  It has been a bungle since Sept 4.  All they needed to do was sort out how to effectively assess and pay all the claims in a reasonable time, instead they have dithered with an utterly useless internal disaster management system that has acheived very little in one year.

My estimate is that EQC has made overcap payments for between less than one third and one quarter of all over cap claims.

How difficult is it to assess a property is overcap?? Not very.  We have a red stickered 330m2 house.  It's twisted, missing an entire side wall, chimneys collapsed, floor buckled.  Our insurer assessed it as a total loss back in January.  After 12 months no sign of any payout from EQC for the first $115k.  In fact of 12 that are clearly overcap of ours only 3 payments have been made.  I would think that this is indicative given just $1.4b has been paid which includes lots of minor claims and repairs.  Even if half of that was overcap payments, only about 6,000 out of 30,000 payments would have been made!

All of those claims could have and should have been sorted in the 6 months since Feb and 12 months since September.  In regards minor claims, the Fletcher's scheme (scam) has paralysed what should have been a simple cash settlement process.

If you believe the Government is doing a good job, you simply have no idea what's going on, and the media is very much to blame for that.

So Bernard get the truth out there and put pressure on the Government to sort out the bungled mess they have made!

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Lashing out in frustration doesn't improve anything one iota.

No one was prepared for the scale of what has happened.  Whether you accept it or not everyone is, to some degree, muddling through as best they can.  Mistakes are part of the human condition and blaming others for your lot is just heart attack material.

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Performance would have been much better if the review mentioned in my 2:54pm comment below had not been ignored, by the present government.

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Well Ralph, if the people in charge knew what they were doing we wouldn't have the current problems. 

There are far too many fundamental errors which are due to pure incompetence nothing else.

World experts come to give advice (like Kit Miaymoto the earthquake enginneering expert) and they are scoffed at by those in charge.  John Key, Gerry Brownlee and a few others are largely to blame for this complete cock up.  Saying that the event is too large or unexpected is complete rubbish.  Wait until Wellington gets another 8+ (last time was only 1855) or Auckland gets another volcanic eruption (which is about due, last one was 1400s) saying it's too big is a George W, Katrina cop-out.

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Well there's where we differ.

I don't believe your assertion it's a complete cock-up.

I don't believe we are swamped with fundamental errors.

The only thing I agree with is that it isn't too big.  It is what it is, regardless of size and we are in point of fact dealing with it.

We have real problems, complex problems of a grand scale.  We need thinking people with wisdom, compasion and courage to roll their sleeves -- mistakes and all.

Mocking, scoffing and blaming others isn't a useful response in my book, it's just whinging.

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Ralph, I am trying to raise issues that are clearly you do not comprehend.

I assume from your comments that you have no first hand experience of the insanity of the current disorganisation.

Insurance and EQC issues are so extensive that it would be fair to say that probably less than 10% of claims are totally sorted (which would mainly be the very minor and the very severely damaged that cash settled).

The CBD is still in lock down.  Our Heritage has been unnecessarily bulldozed.  Whole suburbs swept away without consultation. 

It would have been so simple to get things sorted, instead lots of busy bodies are trying to get their pet projects looked at rather than actual property and business owners having their issues resolved.

It could have been kept simple, instead it's all a dog's breakfast.

Simple ways to fix things would have been:

1. Sort EQC assessment for the most damaged properties with a single assessor who sees it through to payment within a few weeks.

2.  Put pressure on private insurers to have a required timeframe to settle claims.  (Use a large stick if necessary - ie threaten intervention or law changes).

3.  It's too late now, but a plan to get the CBD open to owners should have made within a month of the Feb quake.  Some areas could have and should have been opened months ago. 

4. Plan's needed to made to preserve heritage - too late now.

5. Demolition did not have to be rushed, many buildings could have been repaired and operational now.

6. Red zoning should have been in consultation with land owners.  Many areas could have been "phased out" rather than abandoned.

7. Offers should have been made at market value.  This would have cost no more.

8.  No time frame should have been put on people accepting offers. 

9.  The "big" buildings should have been taken down much quicker.  The Grand Chancellor is incredibly dangerous and is holding up the opening of a large area of the CBD.

10. The public should have been given confidence things were getting sorted, instead we have had nonsensical or plain wrong information fed out by John Key and Gerry Brownlee.  (just today he said only 10,000 people had left ChCh, unfortunately electoral rolls suggest we have 25,000 less persons than 2010, add in 7,000 fewer school age students and a few thousand fewer other young people and non citizens then we have 35,000.  But those numbers also show few have left the most damaged low income areas which suggests that maybe those just haven't sorted their enrollments and that in fact the number who have left could be as high 45,000). 

11.  This list could be endless, but the proof is in the facts:

How many houses built since September 2010?  Less than half of normal.

How many replacement commercial buildings started?  Just a handful.

How many insurance claims settled?  Only the very minor or total losses that cash settled.

How many people have left?  Perhaps 15% of the population.

 

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Not to mention the potential losses associated with the university;

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10748773 

 

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Joyce as Tertiary Education Minister explains much - the relentless incompetence rolls on.

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I agree with everything Chris_J says. 

Seriously damaged properties' claims should have been settled quickly to enable people to pay down their mortgages.  Even if they weren't able to rebuild immediately it would have taken off the financial pressure.  Even an advance of 50% awaiting final calculations would have been better than nothing.  The delay in payments is sending people into bankrupcy. 

Minor cracking claims should be left to last.  It is crazy to repair these while aftershocks continue and while there is still the risk of a large shock bringing the whole building down.  The worse cracks can usually be taped with clear duct tape and screwed into  studs as a temporary repair.  Anything else is pointless as it keeps cracking again.

Future premiums need to be reviewed to allow for the risk involved.  Either much higher premiums should be charged for older properties with chimneys remaining, lathe and plaster or double brick construction, or to have claims due to these causes excluded (like a pre existing condition on a medical policy).   The other option would be a much higher excess on these properties ( say $20,000).  This would make it a financially sensible decision to pull down dangerous chimneys ( to the ground not just above the roof line) and regib. 

 

 

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I think Im coming from a different perspective....to blame JK for an inadequate system he inherited in a historical context is somewhat unfair.....Right now its performing badly? well I cant comment on that as I have no experience, but Im happy to accept your comments on it.

regards

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What we need is a working group to look at the EQC problem? It could complete some sort of review and a report? Then many of the conclusions and recommendations can be ignored, which is NACT's standard response, to date.

Wot, there was review, let's see what response the conclusions and recommendations received:

http://www.stuff.co.nz/the-press/news/christchurch-earthquake-2011/5559040/Extent-of-disaster-never-imagined

Maybe you got to be here to empathise?

I'd not wish eqs on anyone, but you people up in Auckland and probably more especially Wellington, need to help your Cantab mates to get this sorted - for your own sake - because your next eq carries greater risk than our next one.

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I don't see much prevention, preparation elsewhere. Many houses have brick chimney, unsecured water tanks, at least. Shelves not secured to walls etc.

We still thik 'it can't happen here'.

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Exactly!

The biggest killer is cantilevered (bolted on) shop front verandahs.  A few bricks fall from a parapet then break the connections with the wall and the verandah collapses crushing anyone below and making it difficult to exit the building.

All that is needed is a few posts on the street side and some strengthening with thick ply to provide a safe zone.

The vast majority of non-ductile pre 1985 highrises are also deathtraps.  All that is needed to make them much safer is some diagonal steel bracing or dampeners, relative to the building cost this could be done very cheaply.

Then all brick buildings which are just double brick on the ground floor must have alternate support added for any upper floor (ie an extra timber or steel frame inside).  Triple brick or thicker ground floors can probably get away with some polymer strengthening or additional steel ties.

All these things could be done cheaply and quickly to the most at risk buildings.

It's disgraceful that there are currently people living and working in buildings in earthquake prone parts of NZ that would be killed if a relatively shallow magnitude 5.0 were to strike nearby.

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Have any reports shown from how deep underground the liquefaction comes from? Is it possible to still build on that land but to have the houses supported by suitably deep pile foundations, and what would the extra cost of that per house be?

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The liquifaction is from mainly in the top 10m, sometimes from the top 20m.

You can pile a standard house (150m2) with 10m piles for about $10-15,000

In St Albans many areas have up to 20m piles already.  There are new buildings in these areas completely undamaged despite have the land move up or down 0.5m on the street outside. 

Unfortunately the council had become more lenient allowing "floating foundations" in these areas - many of those properties are now unlevel and need demolished.

I know some red zone areas have more silt than the 20m so some areas may not be viable for rebuilding, although I understand that houses on deep piles held just by friction (not down to solid bearing gravels) were virtually undamaged as well.  (My own home has such a foundation and suffered nothing other than cosmetic damage, where I know of one house 30m away which apparently needs lifted and repiled because of it's "floating foundations".

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As an alternative, what about replacing piles and ring foundation by a grid of welded i-beams, sitting on "sacrificial" concrete pads on the corners?  The concrete would suffer in a quake, but can be easily replaced and the house relevelled at the same time. Not my idea, I read this suggestion a while ago, made by a Prof of Engineering.

If I'd had the chance, I would have liked to try this on my own red-zoned home. Still (other than ring foundation) in one piece after 3 big shakes. Seems such a shame to demolish it  and allow the Crown to take the land.

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David B

The piles dont need to be particularly large, nor particularly deep - refer my post
http://www.interest.co.nz/opinion/54058/quake-experience-chrisj-details-his-frustrations-insurers-and-government-response-chri

by iconoclast 14 Aug 2011, 12:53pm
There is a solution to liquefaction - the following engineering documentary was broadcast in New Zealand in January 2011 before the Feb Quake. It deals with the problems of liquefaction - I have followed the CHCH issues all the way through and considering it's now almost 12 months since the first quakes, it is surprising there has been no mention of it .. surely something is amiss .. the video is available for 6 more days ... if it's nothing new and everyone knows about it I apologise for being redundant.
http://www.sbs.com.au/ondemand/play/v/2090414154/Engineering-Connections-Ep-14-The-Earthquake-Proof-Bridge

Richard Hammond's Engineering Connections
http://www.bbc.co.uk/programmes/b011qqz1
The bottom of the Gulf of Corinth is a 500 metre deep layer of soft silt. In a tremor it would turn to quicksand and the bridge would sink. The solution - long steel rods which act like the roots of sweet-smelling Vetiver grass.
 

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Spare a thought for our friends in Japan. After what they've already had there this year (earthquakes & monster tsunami) they've now been hit by a nasty typoon - http://www.bbc.co.uk/news/world-asia-pacific-14783904?utm_source=twitte…

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Japan has a new prime minister again, those guys just can't sleep at night if they have to lie.

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Cera had a series of videos by Dr Jan Kupec about foundation options that was very interesting but it now comes up as 'This video is private'

 

http://cera.govt.nz/news/2011/video-dr-jan-kupec-cera-chief-geotechnica…

 

This was suppose to be a reply to crooked thimb at 4.10

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Anyone out there that has an old villa pre 1930 please take your chimney out down to the ground. Our ones in our 2 storey building practically exploded out all the way down and filled the bottom two rooms with bricks to 2m high. We were very fortunate there was no one in them at the time or they would have been buried. These chimneys had been declared safe by EQC in September ( the Aussie inspector actually told me the chimney was safe until it falls down!)

No chimney or brick wall of that age is safe in my opinion.  Once it gets shaken it crumbles to dust.

You must at least take the bricks down to the mantlepiece and you can make a fake chimney breast out of wood framing/gib to preserve the character.

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