Botched EQC repairs ‘a giant mess’

"One of the problems that I encountered when I became minister was an inability to get the information I needed." EQC Minister Megan Woods

Fixing Canterbury’s botched home repairs has so far cost the Earthquake Commission (EQC) $160 million, more than twice the sum expected two years ago.

The sum is what EQC has spent on its managed re-repair programme. It does not include payouts to homeowners arranging their own re-repair work.

Thousands of EQC repairs, project managed by Fletcher Building, are thought to be faulty or inadequate and EQC currently has over 1200 such cases open. It is also facing more than 300 court claims from homeowners, from a total of 684 cases filed since 2010, with more in the pipeline.

EQC is considering whether it can take legal action against Fletcher over the issue, but has assured homeowners the process will not delay claim settlements.

In mid-2016, the thengovernment estimated re-repairs would cost EQC between $60m and $70m.

EQC Minister Megan Woods acknowledged she had not been aware of the updated amount until it was uncovered by a media request, and still did not know how much EQC had spent on re-repairs altogether.

‘‘One of the problems that I encountered when I became minister was an inability to get the information I needed,’’ she said.

Woods said she had asked for figures on payout settlements made so far to be provided urgently, and expected to receive those soon.

She said she was ‘‘not prepared to make a guess at the total’’ that fixing botched repairs would eventually cost EQC.

Woods said that from now on, she would have weekly meetings with EQC chief executive Sid Miller and interim EQC chairwoman Dame Annette King, a former Labour cabinet minister whom she appointed after Sir Maarten Wevers resigned from the role in February.

The minister will also receive regular updates from her recently appointed independent ministerial adviser, Christine Stevenson.

Woods claimed the former Government and former EQC minister Gerry Brownlee had ‘‘wilfully underplayed’’ the re-repair problem, had not resourced it properly, and should bear full responsibility for it. It gave her ‘‘absolutely no pleasure’’ to be proven right in thinking the issue was worse than publicly stated, she said.

Some poor repairs had been worsening while homeowners battled EQC, and the issue was ‘‘a giant mess’’ Woods had inherited from the previous Government, she said.

EQC has also been under fire for its stance on reimbursing homeowners for reports detailing the nature of botched repairs.

Owners are required to provide proof that repairs are inadequate, but EQC will only consider reimbursement on ‘‘a case by case basis’’, leaving many thousands of dollars out of pocket.

The organisation has established a new unit to handle 2650 outstanding Canterbury earthquake claims at Woods’ request, and is allocating affected homeowners individual case managers.

The Government is also seeking declaratory judgments from the High Court, which it can use as precedents to settle complex claims against EQC.

These include re-repairs with no private insurance claim as the original repairs were under the $100,000 cap, and onsold homes where private insurers accept no over-cap liability.