More than $1 billion of infrastructure assets NOT insured

Existing insurance arrangements expired on July 1, leaving all underground infrastructure assets – such as water and wastewater pipes – without cover. Some above-ground infrastructure assets – such as pumps and treatment plants, but not buildings – were also without cover.

### ODT Online Thu, 7 Jul 2011
No insurance cover for $1 billion of assets
By Chris Morris
More than $1 billion in underground infrastructure across Dunedin is without insurance against natural disasters, after international reinsurers baulked at the risk after the Christchurch earthquakes. Dunedin City Council acting chief executive Athol Stephens yesterday confirmed brokers acting for the council had been unable to secure cover against earthquakes, landslips and other disasters.
Read more

More Recent:
16.7.11 Major Dunedin City Council infrastructure assets NOT INSURED
The Dunedin City Council now faces a $2.4 billion hole in its insurance cover.

LET’S BUILD A NEW STADIUM IN DUNEDIN – IT’S OUR FUTURE

Posted by Elizabeth Kerr

10 Comments

Filed under Economics, Geography, Politics, Project management

10 responses to “More than $1 billion of infrastructure assets NOT insured

  1. Anonymous

    Presumably the next time we get a major event, it will have to be a United Nations rescue effort.

  2. Russell Garbutt

    Just something that puzzles me a bit. The story says that the Council brokers couldn’t find international re-insurers, but I would have thought that while the Council may have a broker to find the best deal for Dunedin, it would be up to that insurance provider to obtain re-insurance. Fair enough if the normal provider came back and said that they couldn’t proceed with the policy renewal, but that’s not the way the story reads,

    In the end it doesn’t make a difference to the non-result, but I wonder when the lack of re-insurance was first communicated to the Council.

  3. Amanda kennedy

    Interesting that the Julian Smith’s ODT does not analyse why there is no money in the DCC coffers for insurance. Perhaps this would be getting too close to That Which Must Never Be Uttered ?

    The stadium councillors Bezett, Brown and mates are responsible for the city not having enough money for infrastructure insurance. They spent the money on a stadium that will actually be a conference centre.

    The ODT can point the finger at the link between gambling and horse racing so why are they blind to the link between Big Rugby and the same councillors?

    • Elizabeth

      Amanda – it is VERY odd that no major news media have picked up on the ODT page 1 story (the subject of this thread), and that Dunedin’s mayor and senior councillors have gone to ground. Oh wait, that last bit is FRIGGING TYPICAL.

      Then that PATHETIC letter to the ODT editor this week by Teresa Stevenson. Dunedin is for simpering was the message.

      • Elizabeth

        Are beggars (DCC) choosers???

        ### ODT Online Fri, 8 Jul 2011
        Merits of collective insurance touted
        By Chris Morris
        Dunedin’s inability to secure insurance for $1 billion worth of underground infrastructure is a “good reason” to join the local government collective insurance scheme, the Local Government New Zealand chief executive says. LGNZ chief executive Eugene Bowen was commenting after learning the Dunedin City Council had found itself without cover to protect its underground infrastructure assets from natural disasters. The Otago Daily Times yesterday reported the council’s existing cover had expired on July 1, and international reinsurers had baulked at offering new cover following the Christchurch earthquakes. However, Mr Bowen said the suggestion reinsurance was no longer available because of the Christchurch earthquakes was “not true”, as shown by the Local Authority Protection Programme (Lapp) fund.
        Read more

  4. Hype O'Thermia

    Despite the parlous state of prosaic infrastructure, which has long been known about by DCC elected and unelected personnel (and even stakeholders – ratepayers – since it has been reported by the ODT every now and then) spending on fancy stuff was SO much more alluring: Fubar stadium, tile do-dahs in the streets which seem to need far more maintenance than plain seal, Chinese garden, staff and consultant time investigating and promoting pet projects like the Otago Settlers Museum tower and the Harrop Street glass lean-to. Had the money been invested in the gradual upgrading of worn out un-glamourous stuff steadily, prudently, we would have safer underground systems. And these would (a) be more insurable and (b) less likely to need it for an urgent pay-out. Instead, now we are donkey-deep in debt for shiny things, and stuck with elderly essential services that much closer to carking it. When that happens we will be like Christchurch Mk II, porta-potties, rainwater collection, trekking and queuing for the portaloo and all. I SO don’t want that as a lifestyle until eventually, fingers crossed, the Patron Saint of Stupid stumps up the cash to bail us out.

  5. Anonymous

    Simply put, an additional $1 million had been budgeted for increased premiums. The actual increase was significantly more than that. It wasn’t affordable. That gives a pretty good indication of how tight things are.

    It is one thing to budget for repayment on the debt, operational expenditure etc. But if things are that tight, it would take only one sizeable adverse legal outcome to tip the whole applecart upside down. There’s a couple of possibilities there – let’s pray that leaky home saga up in Glenleith doesn’t mushroom…

  6. Amanda kennedy

    The writer of the article does not seem to give any consideration as to why there is no funds available to insure our infrastructure, a basic necessity for a well run city.

    Whose incompetence is responsible for this vulnerable situation the city is in? We need to know so that we can remove these individuals from decision making positions. Otherwise we are looking to the people who put the city in the dire situation to get us out. It is in the best interests of those responsible to not be named but in the absolute best interests of Dunedin people to know who these people are. The ODT has left out the most important information in this article. Why is there not funds for basic necessities? Come on ODT. You know why. I dare you to say it.

  7. Amanda kennedy

    I’m going to leave the praying and crocodile tears to the stadium councillors and the DCC staff who supported them in their incompetence. This is their responsibility and the very thing I and many others, in vain, tried to explain to councillors who wanted the stadium at any cost. Well, now those costs are starting to be apparent.

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