City on the verge of something spectacular,
From anchor projects to insurance, seven challenges still face the post-quake city
It will take 20 years to return Christchurch’s quake-damaged roads to the standard enjoyed by other New Zealand cities with $1 billion in repairs and improvements planned for the next decade.
The state of the city’s roads is one of seven significant challenges still facing Christchurch as it marks seven years since the February 22, 2011 earthquake.
Others identified by The Press include: completing anchor projects, the red zone, mental health, New Brighton, outstanding earthquake claims, and unrepaired on-sold houses.
Many of these issues have been intensified by repeated delays, though there is hope a new Government will provide a shot in the arm.
Among the Government’s promises are a $300 million capital fund, $100m for public transport including rail, $30m over 3 years for mental health staff in Canterbury schools, an inquiry into the performance of the Earthquake Commission (EQC), a tribunal to help settle outstanding insurance claims, and funding for declaratory judgements in the Earthquake Court. There has been motion on some, but mostly Christchurch waits for money to be assigned in the next Budget, due in May.
ROADS
The Christchurch City Council estimates there is over 20 years of work to get the roads to a condition in line with other cities in New Zealand.
About 1000km of the council’s
1985km of sealed roads in Christchurch were damaged in the earthquakes. The worst of it was repaired in the $2.2 billion road and water pipe repair programme run by the Stronger Christchurch Infrastructure Rebuild Team until June
2017, but this work focussed on restoring infrastructure broken beyond usability.
Directly after the quakes, priority was given to repairing water and drainage pipes, but the council’s Draft Infrastructure Strategy suggests this will now shift to road repairs at the expense of wastewater infrastructure.
The strategy projects a likely spend of $1 billion on transport infrastructure over the next 10 years, of which $206 million would be assigned to 101km of major cycleways (though at least half could be refunded by the NZ Transport Agency), $44m to An Accessible City central city transport projects, and $295m for road and footpath smoothing, repair and resurfacing.
ANCHOR PROJECTS
The anchor projects were supposed to provide confidence for the central city, but have had the opposite affect after repeated delays and cost blowouts. Developer Richard Peebles says uncertainty over the anchor projects is the biggest challenge facing the city.
The original blueprint for the Christchurch rebuild listed 17 anchor projects, due to be finished by last March. Two have been dropped – a cultural centre in Victoria Park and the Breathe residential project – and a handful completed including the Bus Interchange, the Margaret Mahy Playground and the Justice Precinct. The retail precinct and Avon River precinct are near completion and have noticeably improved the liveliness of the central city But construction is yet to start on the stadium or metro sports facility.
Auckland University of Technology professor of construction management John Tookey says while each struggling project is ‘‘very unique in itself’’, they share issues around scale, scope, multiheaded clients, narrow margins, and allowances for uncertainty. Tookey says the holy trinity of construction was time, cost, and quality, where only two could be fixed with the third likely to blow out.
Greater Christchurch Regeneration Minister Megan Woods says momentum around the anchor projects is ‘‘a key priority’’. She has put in a bid for a $300m capital fund to be included in the Government Budget in May, to be spent as the city decides – with the Government’s approval.
MENTAL HEALTH
In line with international research showing disasters can have longterm mental health impacts, demand for mental health, addiction and domestic violence services has skyrocketed in Canterbury since the quakes.
The suicide rate has increased and so have the number of suicide attempts. Now it remains to be seen whether the new Government will repair the strained relationship between the CDHB and the Ministry of Health, and whether they will deliver more mental health funding for the region – as promised before the elections.
NEW BRIGHTON
The east of the city has felt neglected post-quake, but for New Brighton its been an issue for decades.
The pier’s $10m earthquake repair is due to be completed in April. The council has put up $19m for the New Brighton Beachside Playground, finished in December, and a beachfront saltwater hot pools complex, as part of the New Brighton Regeneration Project. Development Christchurch is working on resource consents needed for the pools, to be started this year.
Development Christchurch chief executive Rob Hall says the playground has been a good start, with shops reporting a pick up in trade since it opened. The hot pools should provide another boost, but the mall and commercial area needs help.
New Brighton Business Association chairman Paul Lonsdale says post earthquake, the seaside suburb has had ‘‘more removed than reinstated’’.
RED ZONE
Spanning the equivalent of four Hagley Parks, the 602-hectare red zone represents opportunity out of tragedy for Christchurch, but exactly how the land will be used is still up in the air – and critically, so is the funding.
The public has shown a deep interest in the area’s future, with good reason given the potential, and the connection former residents have with the space.
Earthquake rebuild organisation Regenerate Christchurch was formed in April 2016. One of its core tasks is to come up with a plan for the space. It released 10 concepts in October, on which the public made over 1800 submissions, showing support for ecological restoration and recreation, and mixed reaction to residential development.
Up to three options are being developed in detail, to be released to the public in an exhibition, before a
draft regeneration plan is put together for August.
Regenerate believes the area could bring up to one million unique visitors a year, which would make a ‘‘significant difference’’ to the Christchurch visitors economy and to the fortunes of east Christchurch.
But the question of funding hangs over the project. The council’s Draft Infrastructure Strategy notes there is no currently no clarity over who will pay, but there are early indications the ‘‘eventual call on council capital funding could be significant’’.
Regenerate Christchurch chief executive Ivan Iafeta says lessons from similar overseas examples show some projects will need to be developed over decades to ensure they are affordable.
He says feasibility work suggests the land could only support a limited range of commercial uses and a ‘‘modest financial return’’, so the challenge is to balance affordability with realising the land’s potential.
INSURANCE
Thousands of families are still struggling to reach a settlement with their insurance companies, despite over $30 billion in claims having been paid.
Insurance Council of New Zealand chief executive Tim Grafton says its not acceptable people remain unsettled after seven years, and the system needs to change.
EQC manages house damage claims below the agency’s liability ‘‘cap’’ of $100,000 plus GST. Claims over that figure are passed to the homeowner’s private insurers. As of December 31, insurance companies have paid $20.6b in private insurance claims of all types, $10.3b of which relates to the various types of residential claims. EQC has paid almost $9b more.
At the end of January, EQC had
2650 outstanding claims, which a spokesman describes as mostly remedial repairs and drainage claims lodged in 2017. At December
31, private insurers had 2513 outstanding over cap claims, from the
27,401 lodged. About 500 of those are resolved but not closed (generally being rebuilt).
These claims are still being passed on to private insurers as previously unscoped quake damage is found. Last year, private insurers settled 2070 claims, but 793 new claims were transferred from EQC over the same timeframe – and it is not known when these claims will stop coming through.
Grafton says its a case of ‘‘two steps forward, one step back’’.
‘‘I was told two years ago that EQC thought that there might be
300 more over cap claims coming across. We’ve had in that time maybe 2000.’’
The last step for those seeking settlement is the High Court. A separate Earthquake List was set up in 2012 to try and fast-track cases. As of September 30, 1015 cases had been filed to the list. Just
42 had been disposed of by judgement, while 472 were settled before reaching trial, with the rest still active. Because of the low number of judgements, precedent has not been set in some areas – important because it would clarify for many whether they have a case.
The new government has announced several planned schemes to try and speed up settling of outstanding claims, such as an inquiry into EQC (for which the terms of reference are being developed), a tribunal to help settle insurance disputes, and a promise to fund some High Court cases to find precedent-setting rulings.
However, the money to get these initiatives rolling needs to be assigned in the Budget in May, a wait many cannot afford.
Grafton says he is supportive of the measures being introduced, but believes there needs to be a permanent change to what was adopted after the Kaiko¯ ura quakes, where private insurers manage claims from start to finish and then are reimbursed up to cap by EQC.
ON SOLD HOUSES – THE NEXT BIG ISSUE?
A separate issue faces some who have bought houses repaired by EQC only to find the repairs were not done correctly or some damage had been missed. It’s unknown how many people this could affect, or how to resolve the issue.
In many cases, the botched repairs are structural, often relating to foundations. The costs of remedying failed repairs can be significant, running into the hundreds of thousands of dollars.
An EQC spokesman says where an EQC claim is assigned to a new owner, they have the same entitlements as the original owner.
If EQC-managed repairs are found to be substandard, the original costs will be set aside and EQC will settle to cap, but entitlement to costs over the limit would depend on the owner’s insurance policy at the time of the quake.
If the original repairs were under the $100,000 cap, then typically no claim has been lodged with private insurers by the past owner, meaning no-one is fronting up for the over cap portion of costs for these new claims. Who is legally liable in this position has not yet been worked out. The over cap on sold issue is a ‘‘real looming challenge’’ for the city.