Quake could cost $16 bil­lion

A mag­ni­tude-7.5 earth­quake along the Welling­ton Fault would cause years of dis­rup­tion and cost $16.7 bil­lion, a report out today says. Damian Ge­orge re­ports.

The Dominion Post - - Front Page -

Welling­ton’s in­fra­struc­ture needs a $5 bil­lion up­grade to avoid crip­pling New Zealand’s econ­omy fol­low­ing a ma­jor earth­quake, new re­search shows.

A report by the Welling­ton Life­lines Group es­ti­mates the coun­try’s gross do­mes­tic prod­uct would take a $16.7b hit fol­low­ing a mag­ni­tude-7.5 earth­quake on the Welling­ton Fault – un­less a co-or­di­nated, 20-year in­fra­struc­ture pro­gramme was adopted.

The group has called on its 16 mem­ber or­gan­i­sa­tions to help de­liver 25 key in­fra­struc­ture projects across the re­gion over the next two decades, at a cost of $5.3b.

Do­ing so would save the coun­try more than $6.1b in lost eco­nomic ac­tiv­ity in the five years fol­low­ing a ma­jor earth­quake, although it would still take a $10.5b hit, the report says.

Life­lines Group chair­woman Dame Fran Wilde said it was the first time a col­lec­tive eco­nomic value had been placed on the re­gion’s pro­posed re­silience projects, some of which were al­ready un­der way.

The rec­om­mended pro­gramme, which the group wants to be for­mally adopted by early next year, would in­clude projects across the fuel, trans­port, elec­tric­ity, telecom­mu­ni­ca­tions, wa­ter, and gas sec­tors.

It would be rolled out in three phases, with the first seven-year phase to fo­cus on fuel, road and elec­tric­ity projects.

Those projects were deemed to of­fer the great­est re­silience value to the re­gion, be­cause many other ini­tia­tives – such as wa­ter network up­grades – were de­pen­dent on the oth­ers be­ing built first.

Wilde said apart from the $800 mil­lion sav­ing to the coun­try’s GDP (once the im­ple­men­ta­tion cost was taken into ac­count), the pro­gramme would also safe­guard the re­gion against smaller, more fre­quent nat­u­ral events, and in­crease gen­eral con­fi­dence in the area’s eco­nomic sta­bil­ity.

That was es­pe­cially im­por­tant given Welling­ton city had a high num­ber of pro­fes­sional ser­vices that were highly mo­bile and could eas­ily re­lo­cate.

But much of the pro­gramme re­mained un­funded, and would need to be bol­stered by the group’s mem­ber or­gan­i­sa­tions. They in­clude a mix of lo­cal coun­cils, gov­ern­ment or­gan­i­sa­tions, and pri­vate com­pa­nies.

In to­tal, the pro­gramme was al­most $3.4b short, with the se­cond phase (from years eight to 14) re­quir­ing more than $2b of ad­di­tional fund­ing.

Of the $1.9b the­o­ret­i­cally com­mit­ted by the var­i­ous or­gan­i­sa­tions, more than $1.5b was con­tin­gent on fund­ing from long-term plans be­ing al­lo­cated.

Wilde said the tim­ing of the pro­gramme was crit­i­cal, and would re­quire a re-think of in­vest­ment plans from elected rep­re­sen­ta­tives, com­pany lead­ers, and se­nior man­agers.

‘‘This is a chal­lenge for ev­ery­one. It may cost con­sumers more over time, so the ques­tion that Welling­to­ni­ans and their lead­ers need to con­sider is whether it is worth­while en­sur­ing that there is a vi­able econ­omy and jobs fol­low­ing a large earth­quake.

‘‘These are big num­bers but . . . the study demon­strates that, as a com­mu­nity, we have op­tions and don’t need to just sit back and wait for what mother na­ture throws at us.’’


Cen­trePort is no stranger to quake dam­age. Wharf strength­en­ing is among 25 pro­posed key projects across the Welling­ton re­gion over the next 20 years.

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