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CentrePort needs to spend $340 million to repair earthquake damage

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The Wellington Regional Council’s holding company has reported that earthquake repair costs at Centreport will be $170 million spread over three years to June 2020, with further earthquake repair expenditure of $170 million extending beyond this period.

The news is provided in the Statement of Intent of the WRC Holdings Group for the three years to June 2020.

It reports that CentrePort’s business interruption and loss of rents insurance covers are only for 3 years and tail off in 2019/20.

Centreport does not expect to fully recover its lost revenues from the earthquake by 2019/20.

The Regional Council will not be receiving its usual annual dividend because “WRC Holdings has costs with no offsetting revenue to cover them.”

Insurance recovery monies for material damage received over the course of the forecast period are an estimate only (subject to the completion of detailed engineering assessments and insurance claims assessments which have notyet been completed).

The statement says that

“CentrePort has commenced a repair programme, which is funded out of insurance proceeds. The immediate priority is on remediation and pragmatic steps to further restore operational capability, with a focus on restoring the container operations, which were most impacted by the earthquake.

“The Harbour Quays investment properties were also damaged in the earthquake and CentrePort continues to work with its engineers and insurance assessors to determine the extent of the damage.

“The longer term plan to repair or reinstate the Port infrastructure, damage to the
land, and investment properties will commence once damage assessment reports are completed. The long term recovery plan and strategy will be widely consulted on with stakeholders.”

4 comments:

  1. Punt- Gun, 31. August 2017, 7:04

    A perfect example of why councils, regional or local, should never be involved in commercial enterprises. Stand by rate payers!

     
  2. CC, 31. August 2017, 9:00

    What a strange comment Punt-Gun. Centreport is operated as a commercial entity at arms length from regional and local councils. Like the commercial sector, its governance is overseen by a board of supposedly competent and no doubt highly paid persons from the private sector. The day to day functions are carried out under a CEO who didn’t come up through the ranks as a council employee. So – acts of God like a couple of earthquakes excluded – the ratepayers have been duped by ‘captains of industry’ types who expect others to pay for their stuff-ups. One might surmise that had a council works department under the control of a town clerk and elected councillors been responsible, they wouldn’t have done as badly as has occurred under the private sector model.

     
  3. Punt-Gun, 31. August 2017, 17:56

    CentrePort is owned 77% by Greater Wellington Regional Council and the rest is owned by Horizons Manawatu Regional Council. The attraction was the $9 million annual divvy. Ratepayer funded entities should stay with core business and avoid involvement in commercial enterprises. When things happen or go wrong it costs ratepayers dearly. No divvy, a monstrous repair bill and we haven’t started on the two earthquake damaged ‘investment properties’ owned by CentrePort.

     
  4. Keith Flinders, 3. September 2017, 17:31

    Running a multi million dollar a year business by committee, as the GWRC is, is bound to end up with the results we have now witnessed. The GWRC and its holding companies work in an unrealistic non competitive commercial environment, where no matter what happens they hit the pockets of the rate payers to make up financial short falls.

    A prominent Wellington building developer warned against the construction of office buildings at the CentrePort site and how right he was, albeit his negative attitude was perhaps more to do with commercial entities being undercut by ratepayer funded flights of fancy.

    I would have expected to read by now, 9 months after the 2016 earthquake, the commencement of ligation against the structural consultants who designed the now stricken buildings. It wasn’t as if the issues associated with building foundations in this area of reclaimed land were not known. In the 1990s the Central Telephone Exchange building in Whitmore Street had substantial additional mass added to its foundations and a sheer wall, after its structural shortcomings were detected. In more recent times the Railway Station had substantial extra mass added to its foundations. As a result both buildings came through the 2013 and 2016 earthquakes with only superficial damage.

    I was astounded to observe the amount of damage in Statistics House after the 2013 earthquake, In my opinion the lack of mass in the foundations of that building will make its future somewhat expensive to remedy.

    What was alarming, and as reported by the Government Statistician, 500 people continued to work in Statistics House after the 2013 earthquake because the tenant had not been advised of the structural deficiencies detected. Any private landlord would have been taken to the cleaners for being so negligent, I suspect.

     

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