6 Mar 2015

Crown still out of pocket for red zone buyout

11:42 am on 6 March 2015

The Government has recouped only $80 million of the $1.5 billion it spent buying red zoned properties in Canterbury after the earthquakes.

230414. Photo Diego Opatowski / RNZ. Christchurch. Red Zone houses.

$80 million of the $1.5 billion the Government spent buying red zoned properties has been recouped. Photo: RNZ / Diego Opatowski

Information released under the Official Information Act shows a small fraction of the money from outstanding insurance claims has so far been paid out.

The Canterbury Earthquake Recovery Authority (CERA) bought 7404 properties in areas where land was deemed too damaged to be rebuilt on.

Of the properties it purchased, 7092 were eligible for land damage pay-outs from the Earthquake Commission (EQC).

However, EQC has not settled any of the estimated 14,000 land claims for increased flooding and liquefaction risk across the region, and is still deciding what the method to use.

It wants to settle complex claims by paying out the difference between the value before the earthquakes and the present value.

The commission asked the High Court to rule on the lawfulness of its intended settlement method last year, which has further delayed the timeframe for finalising claims.

CERA acting chief executive John Ombler said proceeds from the Earthquake Commission would offset most of the cost of the red zone purchases.

It is not yet known when the Earthquake Commission will settle with the Crown over the red zoned properties.