19 Jun 2015

Christchurch may face new quake levy

5:20 pm on 19 June 2015

The Christchurch City Council wants to introduce an infrastructure levy, to cover the shortfall in fixing the city's earthquake-damaged roads and pipes.

A crack in Woodham Road caused by the Christchurch Earthquake

Fixing damaged roads and water systems was previously expected to cost $3.2 billion. Photo: 123RF

Mayor Lianne Dalziel said the proposed levy of 1.5 percent would replace the earthquake levy, which expires at the end of next year.

It comes after a review found that repairing the earthquake-damaged infrastructure would cost $350 million less than previously estimated.

In 2013, the Government and the city council signed a cost-sharing agreement and allocated more than $3.2 billion to fixing damaged roads and water systems.

A clause in the agreement meant the horizontal infrastructure repair programme would be subject to an independent review. The Government's $1.8b funding cap could be increased, or decreased, depending on the findings of the review.

The council yesterday released the findings from Auckland engineer Elena Trout.

Ms Trout's assessment said the cost of infrastructure repairs would now be $2.9b.

She said about $306m worth of work still had to be allocated within the repair programme.

The review said a new design standard that allowed critical defects to remain in the water networks, providing they did not fail within five years and were not in a critical location, was opposed by council engineers.

Ms Trout said they believed accepting a "greater range of defects" because of funding constraints would leave the city with higher operational costs.

The council said the cost reduction is due to changed design standards, better assessment of damage, and rebuild-related efficiencies.

Lower-than-forecasted inflation of construction costs had also helped reduced costs, it said.

It is expected that the city council and the Crown would split the apparent savings 60-40, in line with the original funding arrangements, but neither was able to confirm this yesterday.

Ms Dalziel said the proposed levy would help cover the shortfall left from the cost sharing agreement.

Ms Dalziel and the Canterbury Earthquake Recovery Minister, Gerry Brownlee, have yet to meet to discuss the implications of the review.

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