18 Apr 2018

EQC Minister: Houses not properly assessed could cost millions

10:24 am on 18 April 2018

The government could be on the hook for hundreds of millions of dollars over the Earthquake Commission's failure to assess earthquake damage in Christchurch, Minister Responsible for EQC Megan Woods says.

Megan Woods at the habour reopening in Kaikoura. 14 November 2017.

Photo: RNZ / Claire Eastham-Farrelly

The number of people who bought homes where damage was not properly assessed has now climbed to 664 and Megan Woods said this could be just the tip of the iceberg.

While EQC had paid out the first $100,000 worth of damage on these homes, private insurers were often refusing to pay the remainder of the repair bill which could run into hundreds of thousands of dollars.

Ms Woods wanted to fund a test case to establish whether liability sat with EQC or with the private insurer, Southern Response.

She said it could take as long as 18 months to resolve that matter and how much it might cost.

"It could be $100 million, it could be $200 million and we don't know. And that's why I've asked EQC to start doing some work that if the Crown were found to be liable, what the potential liability could be."

She said it was disappointing the previous government did nothing to tackle the issue, despite knowing about it since 2016.

Former Christchurch earthquake recovery minister Gerry Brownlee rejected Ms Woods assertion. He told Morning Report it was disrespectful to claimants to describe the rise as a 'blow-out' and said problems were dealt with as they arose.

"67,000 repairs were done by EQC. Every house is different, every issue is different. They were never overlooked or ignored."

Mr Brownlee said the only solution to the problem would have been to halt the sales of houses, which would have been impractical.

"We could not ban people from selling houses."

He refused to comment on what might be an acceptable timeframe for repairs to be completed and doubted the final cost of the repairs would be as high as Ms Woods predicted but said it would be unknown.

"The important thing is that we get the work started," he said.

Earthquake Commission chief executive Sid Miller told Morning Report he had known of the problems with repairs for as long as he had been in charge of the commission. He said work on the question of liability had been going on for some months but it was still unclear where it lay.

"This is why we need the declaratory judgement."

Mr Miller was unable to say whether more problems could be found in homes that had not been properly assessed.

"Could there be more? Yes, there could be more."

Mr Miller apologised to claimants for the situation they found themselves in and said EQC "will continue to be there for these people to address their situation".