Call for council to ditch rebuild projects, repay debt

10:26 pm on 29 April 2013

There is growing support for the Christchurch City Council to pull out of financing big, so-called aspirational rebuild projects and instead focus on repaying debt faster.

Figures from the Treasury released on Sunday put the overall cost of the city's rebuild due to damaging earthquakes at $40 billion - an increase of $10 billion on the previous estimate. The Government's contribution to is likely to jump from $13 billion to $15 billion.

Last year a 7.8% rates increase was announced, but Christchurch mayor Bob Parker said residents do not need to worry about another hike because the council's investments are almost sorted out.

Mr Parker said the council is putting about $2 billion above its normal budget into the city's key anchor projects.

However, former council members are sceptical of Mr Parker's comments.

David Close, a former city councillor, said the interest on the council's loans is going to cost between $1.6 billion and $2.3 billion over the next 30 years.

Former mayor Garry Moore said there is no way that the Government can revise its rebuild bill by 33% and not affect Christchurch ratepayers.

Mr Moore supports calls for the council to pull out of funding the likes of the new convention centre and covered sports stadium and, instead, focus on repaying its $2 billion debt.

He said they seemed attractive at first, but he has now come to the conclusion that they are unaffordable.

Canterbury Employers Chamber of Commerce chief executive Peter Townsend said 80-90% of the damage is covered by insurance and that underpins the recovery.

John Key said rebuilding estimates will continue to be updated and he is not ruling out a further rise.