1 Nov 2011

Gas pipeline insurance claims 'not worth it'

1:45 pm on 1 November 2011

Some businesses affected by the Maui gas leak say they will have to absorb the cost of being disconnected for close to a week because it is not worth making an insurance claim.

The repaired pipeline in northern Taranaki was given the all-clear on Sunday and all businesses were allowed to reconnect to the gas supply.

Thousands of businesses had been cut off on Tuesday after a crack was found in the pipe.

Bakels, which manufactures baking ingredients, was in the last group to be reconnected and says it expects a financial loss of about $140,000.

It says that is the same amount as its insurance excess.

Chief executive Duncan Loney says Bakels will talk to retailers about backup plans for future outages and compensation claims.

LSG Sky Chefs, which makes airline food, agrees there is no point making an insurance claim.

The New Zealand Institute of Economic Research says the problem with the pipe cost the country $40 million each day.

Principal economist Shamubeel Eaqub says dairy and hospitality businesses will have been hardest hit but the situation will not have had much of an effect on the wider economy.