April 28 (Bloomberg) -- The rebuilding of Christchurch, New Zealand’s third-largest city that suffered a major earthquake in February 2011, will cost a total of NZ$40 billion ($33.9 billion), an increase of 33 percent from a December estimate, Prime Minister John Key said.
“This is the largest and most complex, single economic project in New Zealand’s history,” Key said in an e-mailed statement today. “The scale of the rebuild is unprecedented. That always meant that it would be difficult to get an exact handle on the total estimated cost straight away.”
The city and the surrounding Canterbury region suffered a magnitude 7 earthquake in September 2010 that damaged homes and roads, with no loss of life. In February 2011, even as the effects of the first shock were being repaired, another temblor hit, killing 185 people and wrecking much of the city center, including its cathedral, sports stadium and tallest hotel.
About 100,000 homes were damaged and 7,000 were condemned. About 70 percent of the shops, hotels and office buildings in the heart of the city have been demolished. People left the city after the disaster and the 7,930 aftershocks that followed. The population fell to 363,100 in June 2012 from 376,700 two years earlier, according to Statistics New Zealand.
Next month’s budget will show that the cost to the government will rise from about NZ$13 billion as estimated in the half-year fiscal update in December to about NZ$15 billion, Key said. The budget will still show the nation is “on track” to deliver a surplus in the 2014-15 fiscal year, he said.
“The estimate increases are due in many cases to more precise information becoming available about what the actual costs are across a range of areas, from housing and social investment to infrastructure and commercial development,” Key said. The government was committed to rebuilding the city, he said.
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