Lyttelton Port aims for headway over insurance
Lyttelton Port of Christchurch (LPC) is to submit a working repair plan for more than 500 quake-damaged port assets in the hope that it will provide a breakthrough in a long-running wrangle with insurers.
The plan is to report ‘‘reinstatement’’ work for damaged assets to insurers and separate these from longer-term development plans for the port.
By submitting that plan, it is looking for a breakthrough with insurers Vero, NZI and QBE.
By the end of March, these insurers had paid $35.7 million towards repairs, but the payout stalled because of arguments about whether a temporary repair plan was pushing into permanent repair territory.
At that point, the port started to wind back its repairs programme, which had run to between $10m and $20m, putting a new cruise-ship facility on hold.
The total cost of insurance damage has been put at about $500m.
LPC chairman Rodger Fisher yesterday said under the port’s ‘‘pay as you go’’ insurance policy the company would not receive any further money until it finalised its asset reinstatement plan.
The working relationship between the port company and the insurers had improved, although tensions between the insurers and insured were normal.
He added there was always debate about ‘‘betterment’’ and whether assets were fully destroyed or not.
‘‘It’s just a process we’re working through. Our people are working with them and their assessors. It’s just a long, drawn-out game and we’re working through that,’’ he said.
A Vero spokesman said engineers from LPC and the insurers, including Vero, continued to discuss what items covered by insurance policies were damaged by the earthquakes.
LPC has a board meeting planned over two days this week to discuss the port’s preferred way forward on its redevelopment plans.
Chief executive Peter Davie said in terms of the dual components of reinstatement and development, the port had put the concept to the board, with further discussion to take place at board level this week before the plan was then put to insurers.
He did not want to discuss the claim amounts surrounding the different assets or the total amount being claimed from insurers. Reinstatement work over five to seven years would be separate from a staged development plan that could take up to 30 years to complete.
‘‘It’s partially around reinstatement and partially around development for future capacity as well.’’
The port has recently had good growth in export volumes, tracking at about 15 per cent better, year on year.
Part of the reason for separating reinstatement and future development was to address an insurance policy that specified that insurers would ‘‘pay as you go’’ as the repairs were carried out by contractors, Davie said.
More than 500 assets were to be repaired or rebuilt under the reinstatement plan. ‘‘It’s all our damaged facilities. We’ve got buildings, breakwalls, seawalls, paving. You’ve got conveyors, wharves.’’
Particular wharves included Cashin Quay, Z Berth, the oil berth and inner harbour jetties numbered 2, 3 and 7.
While the port had started to work with its insurers on the idea, it had yet to formally present the insurers with a working plan.
‘‘We need board approval [in the next couple of days] that we’re heading in the right direction. Then we’ve got to put it in a form for the insurers as well,’’ he said.
The 30-year development plan would draw on previous research done by the port, but with adjustments reflecting the Canterbury earthquake environment.