31 August, 2012
State of Canterbury earthquake recovery
We’re now just a few days shy of the second anniversary of the first earthquake, when we were so lucky that no one was killed.
I want to provide you with an overview of the recovery process to date and the significant progress that we are making.
But first, I want to thank the rest of New Zealand for the incredible level of support and assistance that the Canterbury region has received over the last two years. From all ends of the country, New Zealanders came to our aid and continue to support us.
And we can all be proud of what we have achieved to recover from this adversity. Everyone has had to make sacrifices, to do things differently and to cope with the strain that these events have caused.
The shared experience since then has come to define the lives of this generation of Cantabrians.
Our challenge is that, in five years’ time, the event that by then defines the lives of this generation of Cantabrians is not so much the earthquakes, but being part of the recreation of the magnificent new Christchurch.
Out of the tragedy comes the opportunity to create the best small city in the world, and there are extraordinary opportunities for anyone who wants to be part of it.
I’d like to consider for a moment how we have got to this point where we can plan to take Christchurch forward.
More than 10,000 earthquakes and aftershocks have been felt in this region since the 7.1 magnitude earthquake hit early on 4 September 2010.
The 6.3 magnitude earthquake on 22 February 2011 killed 185 people, injured 11,432 and caused widespread building and infrastructure damage. The impact of these earthquakes and further damage caused by events in June and December last year has been internationally unique. Every part of the Canterbury community has been affected.
Following the February 2011 quake it was clear that a timely, focused and expedited recovery process was required. The Government, with broad political support passed legislation – Canterbury Earthquake Recovery Act 2011 - to ensure we could step in when required to remove barriers to reconstruction.
And we established a dedicated government agency in Christchurch, for Christchurch – the Canterbury Earthquake Recovery Authority (CERA) - to provide leadership, quick action on urgent priorities and coordinate the recovery efforts of local authorities, businesses and the wider community.
The key task of CERA has been to restore confidence in our physical environment. For householders with broken or destroyed homes, rebuilding their homes has been their key priority.
It has been a big task, but we have now re-zoned almost 190,000 throughout the city and in the CBD. It is an extraordinary achievement. This process has been difficult, requiring the careful consideration of the capacity of the land to be safely rebuilt on. The zoning has restored confidence that we can rebuild Christchurch and restore our homes and neighbourhoods with some comfort, and know that if we had a similar quake in the future, it would not cause the same level of devastation.
And the latest predictions by GNS can give us comfort that the seismicity is abating. Their long term forecast is that in the coming month the probability of a 5.5 to 5.9 shake has declined to 4%. In the coming year, there is a 32% probability in that category. Considering we have had 58 quakes in excess of 5 on the Richter scale, it is a vast improvement and gives us hope that the land will settle.
Those ongoing shakes have been a barrier to obtaining new insurance cover for rebuild projects. I was heartened to read comments on Wednesday by Vero CEO Gary Dransfield that not only will they continue to insure commercial and domestic properties in Christchurch; they are also planning to widen their appetite for risk, beyond existing customers.
Recently major Australian insurer QBE has said that premiums should begin stabilising in the Australasian market, following the rises imposed after the sequence of natural disasters in our region. Affordable insurance cover will be important as our population begins to expand and the reconstruction gathers pace.
Insurers have a far greater understanding of the land we are building on in Christchurch. In addition to the GNS Science work, we have had a comprehensive assessment of the land led by Tonkin and Taylor. I believe we have a better scientific understanding of land than any other place in the world.
In considering that information, we have come to understand that some of our neighbourhoods and suburbs were built on land which is now unfit for further residential occupation. Bluntly, it wasn’t a smart idea to build on that land. The Government considered that we needed to give back to the people in those worst affected suburbs, the choice to rebuild their lives on safe ground.
This led to the voluntary Crown Offer, which was designed to be fair and recognise the value of those properties prior to the earthquakes. This process has seen 7779 properties zoned Red. The Crown Offer has cost the Crown over $915 million to date.
It has been a tremendous success. Today, 5834, or three quarters, have already signed a sale and purchase agreement. 4545, or nearly 60%, have already settled with the Crown.
We are now working to provide an offer for commercial, vacant and uninsured land owners in the residential red zone. Details of that offer will be advised in coming weeks.
For those in the Green Zone, we have signalled that this land can be rebuilt on and homes can be repaired.
The restoration of damaged homes will be largely funded and completed by the EQC. The appointment of Fletcher Construction to develop a project management office was designed to ensure that Cantabrians would receive high quality repairs. Future generations will be able occupy the housing stock knowing that we didn’t cut corners to get those houses repaired. That programme has repaired over 21,500 homes.
The EQC has received 414,148 building claims and 93,337 land claims. They have paid out in excess of $3.3 billion dollars.
Having the EQC cover has meant that through the multiple seismic events, insurance cover has been maintained for existing homes. Our high level of insurance penetration means that the economic burden of the recovery is well funded, largely by offshore reinsurers.
Insurers have been making progress with claim processing for the worst damaged homes. Southern Response, which the Crown has taken over, assuming the earthquake insurance claims from AMI, has completed detailed assessments for 96% of their “over-cap” claims, and customers have been provided with their options and a decision pack for 72% of these claims. Most of the remainder are subject to joint review with EQC as to “repair methodology” differences. These are progressing well with significant resources from both parties involved in resolution.
Vero said this week they are pushing ahead with the start of rebuilds and all Vero domestic customers will have timeframes for their rebuilds or repairs by the end of September.
My officials, insurers and the EQC are working tirelessly to expedite these claims.
Regardless of when insurance is paid, the green-zone residents in the most difficult position are the TC3 owners, who represent around 14% of all the homeowners in the city. CERA is conducting more than 20 public meetings with the 27,000 homeowners in that category to build understanding and knowledge.
TC3 is a performance standard which will ensure that in the event of a major quake, the house will perform as well as a house on TC1 land. This requires stronger foundations to handle the challenges of the land. This is not new to Christchurch but has become more prominent. As an apprentice carpenter many years ago, we quite often put in 8 metre piles in many Christchurch suburbs, some complained back then. But now as a minister, I have to make sure what we do is fair and safe – not just immediately but for the future. Time taken now will protect equity and encourage confidence.
Like Indonesia, China, Japan, California, Mexico and Chile, our country lies on a fault. In the next 100, 200 or 300 years, there could be another major earthquake in Canterbury, just as there could be in Tokyo, San Francisco and Santiago. When that happens, the new homes this generation of Cantabrians build must perform well for our great-grandchildren and beyond.
The residential rebuild is about restoring our lives and the places we live. How and where we work, has also been changed. In the CBD and suburbs, 1600 buildings needed to be partially or completely demolished. Already, over 80% of that job is done. That process has meant that we are not stuck with a dangerous dead zone at the heart of our city.
An ambitious deadline was set to reduce the CBD red zone cordon. In February 2011 the cordon around the four avenues enclosed an area of 387 hectares. Today, this area has reduced to 49 hectares. You will have noticed the increased access to the CBD. We aim to have the city fully open by the middle of next year. By the end of this year, we will see the New Zealand Defence Force off the cordon, returning to their barracks. They’ve done a fantastic job.
I would like to think that the City Red Zone will no longer be “red” meaning danger – it will be “red” because of the high energy activity and building going on there.
We can plan a better and brighter future. The rebuild is gaining momentum. Nearly $1 billion worth of building consents were approved in Canterbury in the first half of 2012, while the amount of ready mixed concrete produced in the Christchurch metropolitan area has more than doubled since March 2011, to 112 thousand cubic metres. Over the same period, the amount of concrete produced in Auckland actually decreased and in Wellington it stayed roughly the same.
As I said at the outset, the challenge I make to you this morning is to ensure in five years’ time, the event that defines the lives of this generation of Cantabrians is no longer the earthquakes, but being part of the recreation of the magnificent new Christchurch.
We have to make it exceptional – we have to have both public and private sectors – focused on creating only the best of facilities.
To be blunt about it, New Zealand has something of a record of doing things a bit half-arsed.
Auckland opened the Harbour Bridge as a four-lane bridge in 1959, but they forgot that would mean more people would want to live on their North Shore. Just 10 years later, they had to make it an eight-lane bridge with the so-called Nippon clip-ons.
Aucklanders didn’t learn from that. In the 1970s and 80s, they took eight years to build a pretty average bridge across their other harbour, to their airport. When they did finish it in 1983, it was soon obvious it was too small, and in the 2000s its capacity also had to be doubled.
In Wellington, money was saved by scrapping the two, two laned tunnels at the end of the motorway, in favour of the three-lane Terrace Tunnel, which was out of date as soon as it was opened. Every morning, cars queue to get through.
The Parliament Building was never completed and when they came to do that in the 70’s they put up a rather dysfunctional round building, which wins awards for being ugly.
I am determined that this is not how we are going to recreate Christchurch.
The policy has to be that everything we decide to do in Christchurch is going to be the best. What’s more, we need to do it quickly and – to use the jargon – it must be future-proofed. And will benefit New Zealand as a whole. We have the opportunity to now make it happen.
Partly as a result of the shared experience over the last two years, I think that people in Christchurch and Canterbury have a new respect for one another, and an easy-goingness and tolerance that wasn’t always here before. We must hold on to that.
We’ve had our scraps and bitter words, of course. We’ve been under pressure but it’s made us stronger.
Despite misgivings by some, there is now a unity around the future of Christchurch that I doubt any other city, anywhere in New Zealand, has ever had in recent history.
The Recovery Strategy was released on 1 June 2012 to provide a vision, goals and a road map for ensuring the success of greater Christchurch. Hundreds of specific suggestions and feedback helped create the Recovery Strategy. The strategy shifts the emphasis of earthquake recovery from disaster response to implementing a shared vision and goals for the long term.
That strategy was developed with our strategic partners, the Christchurch City Council, Selwyn District Council, Waimakariri District Council, ECan and Ngāi Tahu. All of those organisations share the commitment to make Canterbury anew.
The strategy outlines Government’s strong commitment to recovery and is helping to coordinate the efforts of all the organisations and individuals involved in the recreation of greater Christchurch. Implementation of the strategy is in full swing through 26 recovery programmes ranging from Economic Recovery to Cultural Heritage and Education Renewal.
In coming weeks and months, you can expect some exciting announcements as we outline the more specific plans which underpin our recovery strategy.
The Government is committed to rebuilding and restoring the services that it provides in our city. This will require new schools, health facilities, justice buildings to name a few. We need new roads, sewers and water pipes. The shopping list is long!
The cost of our new city is predicted to be $30 billion dollars, this is roughly predicted to be the size of our region’s entire GDP. But it will leave us a highly productive and exciting place to live. We can’t build all this overnight, but we must not delay.
Our level of investment will create an economic boom. According to the National Bank, Canterbury is already the fastest growing region in New Zealand. We also need to attract private investment and industry.
Money, people and ideas are pouring in. But, we need to develop an economy that is built on a fundamentally strong economic base. A good example is the new Fonterra plant that will open at the epicentre of the September 4 quake – Darfield – at the end of this year. Fonterra is investing $500 million and the plant will process 6.6 million litres of milk a day. This highlights the strength of the agricultural base of the Canterbury region.
That economic base is the primary reason why the Central City will be recreated as the CCDU Blueprint lays out. The business community which drives our economy have embraced that vision of a modern CBD which makes doing business easier. More Canterbury businesses want to be based in the new CBD than were based in the old. The people of Christchurch are equally unified around the Blueprint.
According to research used to inform CCDU’s investment strategy, 74% of Christchurch businesspeople, 56% of Christchurch residents and 52% of New Zealanders support the plan, with most others being neutral.
Nearly 80% of Christchurch businesspeople and 61% of Christchurch residents believe things in Christchurch are now heading in the right direction, higher than the benchmark of the 51% of New Zealanders who believe things in New Zealand are heading in the right direction.
Importantly, to get our plan underway and create jobs, 97% of Christchurch businesspeople plan to keep living in the city, and three-quarters of them believe this is a good time to invest.
But a real city will not feel like a business park. The Blueprint is designed to be a place that people will want to live in. It must have the social and cultural fabric that people enjoy being part of.
The Avon River Precinct is a key anchor project. It will become our waterfront, our green space running through the city. The CCDU anticipate expressions of interest for design of that park will be launched in early October. Construction will begin this summer, and is likely to start in the area of the river to the east of Colombo Street.
Not only will the Avon River Precinct attract local and visitor use, it will support the core commercial, retail and cultural activities and become a destination in its own right with cultural, art and historic references.
I want to make it clear we must all agree that these projects and facilities must be the best to be found in any small city in the world. We should not entertain proposals that fall short of that objective. There are going to be no repeats of the four-lane harbour bridges.
And we need to act quickly to achieve the vision.
Our city’s children who are five today, were barely three in February 2011 and they will not have full access to their central city until they are perhaps 10. One important part of the Frame – in the north-east – will be the new children’s playground. We will build them a playground from where they can view the rebirth of their city, through their childhood years. It will be the best playground in the world. Not a fun park, but a playground.
Later in the month, I will announce with the Minister of Education a competition for the children themselves to help envision what that playground will be like and begin to understand what a great place Christchurch will become.
Our goal should be that within a decade, Christchurch is clearly recognised as the best small city in the world in which to bring up kids, open a business, go to an art gallery, study at university, watch the All Blacks, make money, create jobs, build a home.
My officials, and those in the council, have made strong commitments to make all this happen fast. The longer we take, the more opportunities will be missed.
Last year, Christchurch was unable to host part of the Rugby World Cup 2011 and 2011 Festival. In the home of the Crusaders, we missed out on what will be remembered as the biggest cultural and sporting event that New Zealand has ever held. In 2015, New Zealand will host part of the Cricket World Cup. The people of Christchurch can’t miss out again. We need to all go into bat for Christchurch and ensure that not only do we take part - we take a leading role in that event.
Beyond that, our new Blueprint will give us the facilities to be the leading events destination in New Zealand.
My message to the businesspeople and investors of New Zealand; and to the philanthropists who might want to become involved in our new parks, our new arts centres or our new sports stadia is this: Christchurch is the place to be. Everything we do here will be the best.
We have always been a beautiful city, in the most beautiful part of New Zealand; the best part of New Zealand to bring up a family; and the main support centre for the South Island’s most important industries, past and present, including agriculture, tourism, mining and oil, education, the high-tech industries and logistics.
We have a fabulous new airport, a restored port and are building superior roads, connecting us better than ever before with the rest of the South Island and the world.
If we can’t make something extraordinary about the newly recreated Christchurch off the back of such opportunities and such overwhelming public, political and business support, there is something wrong with us.
And we’ve proven this last two years there is nothing wrong with us. We have proven we are among the best and most resilient people in the world, and we can do things fast.