Friday, March 11, 2011

Christchurch earthquake: Rebuild could cost $30b

Christchurch could become the headquarters of New Zealand's construction industry for the next decade, with predictions that rebuilding the city could cost $30 billion.

Fletchers infrastructure chief executive Mark Binns said staff and money from all over New Zealand would be redirected towards Christchurch over the next decade.

Canterbury Employers' Chamber of Commerce chief executive Peter Townsend said estimates of $20b to fix Christchurch were "very light" and could easily reach $30b.

Binns said yesterday that money tagged for Auckland and Wellington projects would probably be diverted to Christchurch, and scores of companies would review their "human capital" and probably relocate many to the rebuild.

"The event of February 22 was a game-changer. There will be massive implications for the industry over the next decade," he said.

It was inevitable workers from outside Canterbury would be needed to repair the "level of devastation" in the city.

He said this meant builders, engineers and others in the industry would relocate to the city for years at a time as the Government looked at reallocating money for major North Island projects further south.

"Firms will have to start looking at their human capital and see where their resources should be concentrated. There could be a lot of staff moving to Christchurch."

Binns said the February 22 earthquake had changed the scale of the problem facing construction companies and others involved in repairing and rebuilding.

"Everyone will have to re-evaluate how work around the country is rolled out and the resources required," he said. "It's a pretty intensive programme over the next decade that will need planning."

Townsend said there was "absolutely no doubt" Christchurch would be the "home of construction" for the next decade.

He said it was emerging that the rebuilding cost would be far greater than first thought.

Early estimates put the price tag at between $15b and $20b, but the scale of the devastation was "on a magnitude well above what happened on September 4".

He said economists and others who originally calculated the bill at about $20b were already revising their figures upwards.

"When you start adding up what has happened, what needs to be done, the scale of this thing is just massive. It's mindboggling. I think $30b is more than possible," Townsend said.

He expected the most "intense" spending of that money would be in "years two to six".

The Green Party has warned of the "real danger" of New Zealand builders disappearing overseas when they were desperately needed for the Christchurch rebuild.

Co-leader Metiria Turei said this week's collapse of Sovereign Homes was further evidence that the country's building industry was in trouble.The impact of Christchurch's rebuild would not fully "kick in" until next year.

"If there is no work in the interim, the tradespeople will disappear overseas and we will have a shortage of workers when we need them the most."

She said the Government urgently needed to invest in fast-tracking repairs, training programmes and building state houses.

- The Press

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