Sept. 5 (Bloomberg) -- New Zealand’s Cabinet meets in Christchurch today, marking the one-year anniversary of the first of a series of earthquakes that hit the southern city and may cost the nation as much as NZ$25 billion ($21 billion).
“We haven’t seen a natural disaster have a bigger impact on a developed economy in economic terms than this one,” Prime Minister John Key told Television New Zealand today. “We don’t really know the total cost of this thing. Is it NZ$20 billion? Is it NZ$25 billon? Nobody’s entirely sure.”
The magnitude-7 quake on Sept. 4, 2010, began a year of seismic upheaval that included 29 temblors of magnitude 5 or more, according to the government. A quake measuring 6.3 on Feb. 22 was the deadliest in 80 years, killing more than 180 people and closing the heart of the nation’s second-largest city, home to a population of 350,000.
New Zealand’s recovery from a 2009 recession was set back as resources were diverted to Christchurch, and the government forecasts a record budget deficit in the year ended June 30 as it pays for rebuilding. The nation will get an economic boost from the Rugby World Cup that starts in four days time, attracting an expected 95,000 fans from overseas and generating an estimated NZ$700 million in spending.
The government last week signaled that the NZ$15 billion damage bill assumed in May’s budget, already about 8 percent of gross domestic product, is likely to rise because of the extent of property and land destruction. It more than doubled the state’s estimated insurance liability to NZ$7.1 billion.
It is the first time in 16 years that New Zealand’s Cabinet has assembled outside the capital city, Wellington, and ministers will be briefed today by earthquake officials, local mayors and specialists.
“The government remains totally committed to rebuilding greater Christchurch and providing a sound future for those who choose to call the region home,” Earthquake Recovery Minister Gerry Brownlee said in an e-mailed statement yesterday.
The September earthquake “kicked off a series of seismic events the likes of which hasn’t been seen anywhere else in the world,” he said. “We’ve come a long way since that day, through some dark and very trying times.”
Six thousand homes in Christchurch and smaller towns in surrounding districts are on land so damaged they can’t be rebuilt, while about 10,000 properties are still being assessed and may be condemned.
Almost 388,000 claims have been lodged with the state-owned Earthquake Commission. About 30,000 homes have damage exceeding NZ$100,000.
September’s quake, centered about 55 kilometers (34 miles) west of the city, wrecked homes, roads and historical brick buildings when it struck at 4:35 a.m. on a Saturday morning a year ago. No-one was killed as the central city was largely deserted. The Feb. 22 temblor was shallower, centered 10 kilometers away and struck during the lunch hour.
About 900 buildings in the city are being totally or partly demolished, including some of the tallest towers, hotels and many heritage properties that made Christchurch a favorite venue of visiting tourists.
Christchurch Mayor Bob Parker and his counterparts from the neighboring Selwyn and Waimakariri districts placed full-page advertisements in national newspapers at the weekend, thanking New Zealanders for their support since the disasters.
The region “is indebted to the generosity and bravery of everyone who has helped our community,” the mayors said.
The Rugby World Cup involves teams from 20 nations. Organizers had to transfer games away from Christchurch after the Feb. 22 temblor wrecked the city’s stadium. The England and New Zealand squads have pledged to spend time training in the South Island city during the competition.
“There were some great people down there who were getting Rugby World Cup into great shape,” Martin Snedden, chief executive officer of Rugby New Zealand 2011 Ltd., told Television New Zealand’s Q+A yesterday. Having to shift those matches was “by far the saddest thing that has happened in this project,” he said.
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