Botched repairs cost up yet again

New figures reveal the Earthquake Commission (EQC) has now spent more than a quarter of a billion dollars fixing over 11,000 homes with botched or inadequate home repairs in Canterbury.

EQC has revealed it has paid out $100 million in cash settlements to homeowners arranging their own re-repairs, on top of an updated bill for managed re-repairs of $170m.

Information obtained by The Press under the Official Information Act shows that of 16,404 second-time-around claims for repairs, EQC has accepted 11,051, and 1099 have exceeded the organisation’s $100,000 liability cap and require a private insurance top-up.

The $270m total compares with a mid-2016 estimate from then-EQC Minister Gerry Brownlee that the re-repair bill would total $60m to

$70m.

EQC Minister Megan Woods described the total bill as a ‘‘blowout’’ and said she had held an urgent meeting with Treasury to request more information.

‘‘This is far beyond what the previous Government told the public the issue would cost. In opposition, we warned the Government they were not acting fast enough on the issue of botched repairs,’’ she said.

The Official Information Act figures put the number of homes with EQC claims from the quakes at 167,051. Of these, 67,746 properties have had managed repairs and

99,000 have been cash-settled. The biggest year for re-repair claims was 2016, when just over 10,000 of the 16,000 were lodged, and they continue to come in.

Brownlee has rejected claims he underplayed Canterbury’s botched home repairs, and has accused the Government of not doing enough to solve developing insurance problems.

Woods on Wednesday accused the previous government and Brownlee of ‘‘wilfully’’ playing down the problem of re-repairs. She made the comments when confronted with media figures that EQC had spent $160m on managed re-repairs, a figure now updated to

$170m.

Brownlee yesterday ‘‘completely rejected’’ Woods’ suggestion. ‘‘I have not downplayed anybody’s plight in Christchurch the whole time. For her to come out and say that is outrageous.’’

He said people had forgotten the sense of urgency to start fixing homes during a long earthquake sequence, and that eventual costs were impossible to foresee. ‘‘You can’t quantify totally what the end costs will be until you reach the end – you’ve got insurance contracts and they have to be honoured. We’ve got to have a place for people to go, and that’s EQC.’’

He said that while he was not discounting the size of the repair bill, $170m as part of a repair programme costing billions of dollars was ‘‘not a large sum’’.

Brownlee said the new Government should address the emerging problem of new owners of onsold homes being ‘‘left high and dry’’ when discovering unrepaired damage.

‘‘Why isn’t Megan Woods working on a solution for those people? I don’t think it’s going to be as big a problem as some people are suggesting it might be, if there is a reasonable solution found on the way through.’’

After acknowledging this week that she had been unable to obtain her own cost figures from EQC, Woods said she would meet weekly with EQC chief executive Sid Miller and interim chairwoman Dame Annette King. She would also receive regular updates from her recently appointed independent ministerial adviser on EQC, Christine Stevenson.

EQC is considering taking legal action against Fletcher Building, which project-managed the home repair programme. 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.

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.