Asset sales could help pay for rebuild - Key

NICOLE PRYOR
Last updated 09:30 21/05/2013

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Partial asset sales could be a way for Christchurch to get its 'nice-to-haves' in the rebuild, says Prime Minister John Key.

The Government raised the estimates of the rebuild from $30 billion to $40b last month, with the Government's contribution increasing by $2b to $15b.

How the city funded the rest of the build was a "matter for Cantabrians to consider", Key told Firstline this morning.

"It is for the council to say 'do you want the nice-to-haves'," he said.

"Then they'll ask how are you going to pay? That could be through rates or asset sales."

He thought the idea of partially floating assets, so the council remained in control but still raised money, was "incredibly logical".

One reason for the rebuild cost increase was the Government choosing options that were not the cheapest, such as the $600m redevelopment of Christchurch and Burwood hospitals.

In December, Treasury estimated that of the $13b due to be spent by the end of June this year, $7.5b would be paid by the Earthquake Commission.

Another $5.5b would come from the Government's Earthquake Recovery Fund, with $1.6b of that going on local infrastructure, $1b on land zoning, $1.5b yet to be allocated and a contingency fund of $852m set aside "to reflect the significant uncertainty".

In February, Christchurch mayor Bob Parker said the council would not sell assets to fund is 40 per cent share of the city's quake repairs and rebuild.

Parker said the council would not sell its stakes in Port Lyttelton or Christchurch International Airport Ltd.

He instead proposed a rates increase of about 6.6 per cent over three years and a 3.8 per cent rent rise for council housing from July.

After the rebuild cost figures were revised, he said the gap in anchor project cost-sharing was "significant".

The amount earmarked for the projects was "really in the Government's hands", he said.

"Council's made it really clear the quantum of community money we can sustainably afford to put in and the debt levels we can sustainably afford to service and pay off over the next 30 years.

"At the moment there is potentially a gap between that and where Government may be sitting. I hope this will help to close that gap and I guess days ahead will make that clear."

Negotiations must conclude before the council's three-year plan is finalised next month.

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