Council seeks another $10m

The Christchurch City Council's social housing repair and rebuild programme could grind to a halt in three months unless it gets a cash injection from the Earthquake Commission (EQC).

The council has been using $21 million advanced by EQC in April 2011 to pay for the repairs to its damaged social housing stock, but that money has been spent or committed to projects.

It is now asking EQC for another $10m so that it can keep the repair programme going until the two parties reach a global settlement.

Housing committee chairman Cr Glenn Livingstone told The Press that without the money the repair programme could falter. In the worst-case scenario, the council would not have any money to spend on fixing or rebuilding its quake-damaged housing stock beyond August.

"I'm sure no party will want that," said Livingstone, adding he was optimistic that EQC would agree to make another interim payment within the next few weeks.

About 90 per cent of the council's 2649 housing units sustained damage in the quakes and are in need of repairs, or in the worst cases, replacement.

Originally, the council was laboriously trying to reach agreement with EQC over the cost of repairing each individual unit, but since the end of last year it has been trying to negotiate a global settlement with the commission so it can accelerate work on the repair programme.

Livingstone would not comment yesterday on how much the council believed it was entitled to from EQC, but he said there was strong will on both sides to resolve the claim.

The council's Three Year Plan (TYP) assumed that $53m would be spent on fixing the housing stock and that all of that money could be recovered from either EQC or the council's insurers.

Council staff warn that even if the organisation gets the full amount it believes it is entitled to from its insurers, it will not have enough money to fix or replace all of its damaged housing stock. They are now working on a report for councillors that will prioritise the unit repair and rebuild programme to ensure the council gets maximum value for money.

The potential shortfall was identified by KordaMentha partner Michael Stiassny in the independent audit he conducted of the council's finances. In his final report, Stiassny said the council would have to assess what work could be done when it knew how much money it had to spend but it might not be able to undertake all the work.

Stiassny said the council was considering other options to get the damaged units repaired. They might not require the organisation to fund the full cost but he could not go into details because discussions were commercially sensitive.

EQC said it was considering a "without prejudice" interim payment of $10m.

The Press