The Star: July 07, 2016

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Thursday July 7 2016 7
News
In Brief
• By Shelley Robinson
Underground insurance woes
MAN ARRESTED AFTER
SCIRT: The Wairakei Diversion has been repaired as part of the
major upgrade to the city’s wastewater network. ​
THE CITY council is facing a
multi-billion dollar problem as it
tries to find an insurer and
options to cover the network of
underground pipes.
It has been crunching the
numbers over the past few
months on how much insurance
to get and how to get it.
Currently, there is $6 billion
of underground infrastructure
with $100 million cover
through the Local Authority
Protection Programme Disaster
Fund.
Above ground, buildings and
other assets are well-covered,
with $1.8 billion coverage
for $2.2 billion of assets, but
underground is another story,
said city councillor and the
insurance committee deputy
chairman, Raf Manji.
“Certainly it is a risk that
we’ve had to carry for a long
time. We do have a huge amount
of underground infrastructure
that is not insured,” he said.
It’s a risk mitigated by the “resilience”
built into the networks
– plastic pipes instead of ceramic
that could take “a lot of shaking”,
Cr Manji said.
The problem is to go to market
insurers need enough information
to base a price on, said city
council financial officer Peter
Gudsell.
But the city is still undergoing
extensive repairs, meaning there
is “insufficient information to
seek a response from the market”,
he said.
The city had $200 million
of cover with LAPP after the
September 2010 and February
2011 earthquakes, which was
paid out.
Cr Manji favours getting
“catastrophe insurance” or
parametric insurance for the underground
infrastructure. This
insures for a particular event.
In a disaster, the Government
covers 60 per cent of the
cost, with councils paying the
remainder.
But that is under review by the
Local Government Risk Agency,
forcing councils to look at other
insurance options.
“I think the gut feeling is
councils will be taking on more
of their own risk,” said Cr Manji.
Auckland City Council director
legal and risk Katherine
Anderson said it was looking
to purchase cover for its underground
stormwater assets, with a
replacement value of $2.9 billion.
The normally candid deputy
mayor, Vicki Buck, who is on the
committee, said she preferred
not to comment on the “minefield”
that was the city council’s
insurance.
But she did say that after the
issues with Civic Assurance,
the city council has been more
cautious.
It took a year of mediation
with Civic Assurance’s reinsurers
before it received its
global settlement in December
of $635 million.
“Our approach to insurance is
once burnt [be] incredibly careful.
Insurance is a regular subject
and there are regular updates,”
she said.
INDECENT EXPOSURE
Police arrested a man on Tuesday
after he exposed himself to a
young child in Riccarton. The
man is his 40s is known to police.
The incident happened about
3.30pm in Kmart. He was taken
into custody and investigations
are continuing.
HUNTER SHOT IN LEG
A man is recovering after being
accidentally shot in the leg by his
hunting partner at Glenthorne
Station, near Lake Coleridge on
Sunday. The pair and a third
man, all from Selwyn, were on a
hunting trip when the accident
happened. Senior Sergeant Tony
Beaumont said one of the men
had been unloading his rifle when
it discharged. Police were likely to
lay charges, he said.
CORRECTION
In The Star last week, it was
reported that the city council
made the decision to put $70,000
toward the SingularityU summit
behind closed doors. The grant
was discussed behind closed
doors in a public excluded
committee meeting, but the
final decision was made in a
meeting which was open to the
public. The Star apologises for the
error.
SOCIAL
CLIMBERS
Take four school teachers
Add one school counsellor
Mix in one teacher’s daughter
Stir until all well versed in tramping
and river crossings
Roger Hall’s comedy comes to
Heaton Performing Arts Centre
on 14 July.
Debut director Ali Robb has had many a humorous
time watching this cast come together, hearing all
their ‘stuck in the hut’ tales.
“YOU CAN’T BEAT
KIWI CREATIVE
TALENT.”
- Craig Hutchison,
Director and Producer
CAS’n’OVA PRODUCTIONS
on their latest production.
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