Debate over costs gap

Last updated 05:00 02/06/2014

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In 2013 the Government put aside $2.3 billion in its budget for rebuilding Christchurch's quake-damaged horizontal infrastructure.

Fast-forward 12 months and that figure has dropped to $1.8b - a $567 million decrease.

Opposition MPs claim the drop is a financial sleight of hand aimed at making the Government's books look healthier but the Government says it is simply a more accurate reflection of the true costs.

The city council is sticking to its long-held position that the costs of repairing the city's horizontal infrastructure will end up being much higher than predicted - a position backed up by its independent auditors KordaMentha, who identified a funding shortfall of $413m.

Earthquake Recovery Minister Gerry Brownlee has called in his own advisers, Morrison Low, to review the council's figures. Their findings are due soon.

In the meantime Labour MPs are leaping on Brownlee, accusing him of taking money out of the Budget at the cost of the rebuild.

Labour's Canterbury rebuild spokeswoman Ruth Dyson says the figure has been revised down solely to make the Government's surplus look possible.

"The numbers in the Budget are flaky, and have been revised without any robust costing to make the surplus look better rather than as an accurate reflection of what our infrastructure is going to cost," she says.

But Christchurch Central Development Unit director Warwick Isaacs says the new figures were arrived at through revised estimates of infrastructure costs and changes to which of the repair projects are subject to the cost-sharing arrangement with the Crown.

He says $239m of the $567m taken out of the budget is due to the Crown lowering how much it expects the infrastructure repairs to cost.

The remaining $328m is due to changes to which horizontal infrastructure projects the Crown is required to contribute funds to, and which ones will be solely funded by the city council.

The Government's overall contribution of $1.8b is in line with the figure outlined in the formal Cost Sharing Agreement signed with the council last year, Isaacs maintains.

Until it becomes clearer whose figures are right - the council's or the Crown's - neither party is prepared to discuss how the Cost Sharing Agreement may need to be altered.

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- The Press


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