More than seven years on from the Canterbury earthquakes, and an increasing number of botched Earthquake Commission (EQC) repairs appear to be coming out of the woodwork.
In June 2016 the then Minister Responsible for the EQC, Gerry Brownlee, estimated the overall cost of remedial repairs would be $60 million to $70 million.
During the day on Thursday EQC confirmed it had spent $160 million on remedial repairs.
Then early in the evening the Minister Responsible for the EQC, Megan Woods, said the figure actually sat at $170 million, with the EQC spending another $100 million on re-settling homes that had been cash settled for initial repairs.
This $270 million makes up around 3% of the $9 billion the EQC has spent on quake claims to date.
The Minister Responsible for the EQC, Megan Woods, accuses National of “wilfully ignoring the scale of the problem” when it was in government.
"One of the things that does frustrate me was that some of these repairs have got worse because they weren't dealt with quickly. Obviously time can make things that are broken a bit more broken," Woods told Radio New Zealand on Wednesday.
Speaking to interest.co.nz, Brownlee says the amount spent on re-repairs is small relative to the total amount spent on repairs.
He stresses he doesn’t want to diminish the issues faced by some in Canterbury, but says the majority of the work carried out on the 67,746 homes repaired by the EQC has been successful.
“You’ve got to be very careful that you don’t start disparaging the reputation of the outfit based on a small number,” he says.
“What fascinates me is that people say, ‘It’s terrible for people. The expense is climbing.’ The reality is that because the expense is climbing, it is indicating that people are getting their problems sorted. And what’s the problem with that?”
Brownlee says the leaky building experience showed that “builders can come in, do a job, de-register a company, go off into the ether and there’s no back-up”.
“At least with this system, there was always going to be back up, and that remains the case right now.”
Brownlee stands by Fletcher Building - the company that won the tender to manage the EQC’s repair programme.
“I think they’ve done a good job.
“I just think people aren’t seeing the wood for the trees here. And in this case the wood - Megan - is making a whole lot of mischief, frankly for herself. If she destroys public confidence in an organisation like this, it will put insurance prices up.”
Woods has appointed an independent ministerial adviser to help the EQC settle its remaining 2,600 claims (all re-repairs) quickly.
Brownlee emphasises the good relationship the EQC has with its reinsurers and warns: “You can destroy that very quickly.”
Neither Woods nor Brownlee can estimate how much more the remediated repairs will cost.
The EQC’s Natural Disaster Fund only has $424 million in it. EQC says most of this is in the form of on-call and short-term bank deposits, with the remainder in the form of “investments”.
Under Section 16 of the EQC Act, the Crown is obliged to help the EQC meet its financial liabilities in the event of the Fund being exhausted.
The EQC says: “The final amount that would be provided to EQC, and when Section 16 will be triggered, has yet to be determined.
“Key factors that will determine when Section 16 is triggered include settling claims for both the Canterbury and Kaikoura earthquakes and other events around New Zealand.”
In the event of another disaster, the Fund is also covered by reinsurance. However the excess on the $4.8 billion of cover available is $1.75 billion.
In November 2017, the EQC levy people with private insurance pay into the Fund, was hiked by 33% in an attempt to replenish it.
The former government expected it to hit the $1.75 billion mark within 10 years.