Major Dunedin City Council infrastructure assets NOT INSURED

THE CRACKS ARE SHOWING

### ODT Online Sat, 16 Jul 2011
Assets of $2.4b not insured
By Chris Morris
The Dunedin City Council now faces a $2.4 billion hole in its insurance cover, after rejecting “huge” premium increases and dramatically reduced cover for above-ground infrastructure. The decision means roads, bridges, tunnels, viaducts and other pieces of critical infrastructure across Dunedin have also been left without insurance cover in the event of a natural disaster.

That was on top of the $1 billion in pipes and other underground infrastructure assets already left without cover on July 1, after council insurance brokers were unable to renew existing policies.

The latest loss of cover meant the city now had $2.4 billion worth of infrastructure assets without any form of insurance, council financial controller Maree Clarke confirmed late yesterday.
Read more

Related Post:
7.7.11 More than $1 billion of infrastructure assets NOT insured

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

Posted by Elizabeth Kerr

13 Comments

Filed under Economics, Geography, Politics, Project management

13 responses to “Major Dunedin City Council infrastructure assets NOT INSURED

  1. Elizabeth

    Senior staff have been left to make the announcement.
    Where are the Mayor and Councillors, and their (joke) united front ?

    Latest news at the DCC website includes ‘Art From Waste’ (15 Jul) and ‘Poetry Evening Highlights Literary Stars’ (15 Jul).

    No official media release on the Council’s insurance fiasco. Oh dear.

    This is getting interesting – although, we’re not surprised.

  2. Peter

    Is the stadium fully insured?

  3. Hype O'Thermia

    Gollyeee. Insurance. Electrics.
    Friend SRT (semi-retired tradesman) has a son whose company was working on the stadium recently. STR told me the kitchen had a real problem, no, it wasn’t just that Big Rugger wasn’t happy with the colour of the sink benches. Evidently the whole thing was inoperable on account of the electricity going into it being enough for, oh, a nice dinner for self and friends accompanied by some choice CDs and the lava lamp. Just a little slender weightwatching wire, that’s all – to cope with HUGE demand in relatively brief periods.
    It’s like the accessibility issue, looks like all of a sudden someone was reminded that the cheapskate meets nanny state attitude – walk, it’s good for you – is at odds with goodness knows how many pious statements and a law or 2 if I’m not mistaken, regarding inclusion of disabled people to businesses and workplaces as very important. Now I have seen in today’s response to a letter to the ODT, disabled people should contact them ahead of time. So anyone who’s got tickets – don’t sprain your ankle the night before.
    Didn’t anyone PLAN anything? Didn’t anyone have any idea of … oh sorry, the answer to that one was obvious early on. Who needs planning when you get away with cunning plans for gullible spendthrifts?

    • Elizabeth

      In reply to Hype O’Thermia:

      See my earlier comment on DCC’s Disability Strategy… the more people who know about it and the Ministry of Health’s New Zealand Disability Strategy (2001), the better.

      I got onto the council about its Disability Strategy not being ‘dated’ on their website (no date of approval). Sandy Graham kindly replied saying the council’s policies will be dated as website upgrades continue. Sandy provided a sample screen shot of how data will be loaded in the next month. There will be an A-Z listing of council policies, with full search functionality – more detailed information is available as you click through from results.

      That is good news. I’m impressed.

      • Elizabeth

        Insurance industry sources in Dunedin – who would not be named – said the change in excess calculations was being faced by all building owners across the city, and was not restricted to heritage buildings

        A major post-quake driver was that New Zealand insurance companies were often seeking reinsurance from the same international reinsurers, who shared a new perception of risk in New Zealand.

        ### ODT Online Mon, 18 Jul 2011
        Insurance renewals huge shock
        By Chris Morris
        Dunedin building owners face hikes of up to 300% in natural disaster insurance premiums, together with new excesses and even complete loss of cover, following the Christchurch earthquakes.
        Read more

        • Elizabeth

          Damage to just 5% of the council’s infrastructure assets would require $120 million to fix, with the council’s 40% share amounting to $48 million.

          ### ODT Online Mon, 25 Jul 2011
          $50m city quake repair bill warning
          By Chris Morris
          The Dunedin City Council should plan for a nearly $50 million repair bill for damaged pipes, roads and other infrastructure after a major earthquake, a new council report warns. However, the report by council financial controller Maree Clarke also warned “significantly more work” was needed to assess the magnitude of the risk faced by the council. It was also possible rates or debt levels might have to be considered to cover the cost of self-insurance or a repair bill should disaster strike, her report said.
          Read more

          Mrs Clarke’s report, detailing the options and the council’s likely risk, would be considered by councillors at today’s finance, strategy and development committee meeting.

          Report – FSD – 25/07/2011 (PDF, 49.7 KB, new window)
          Infrastructure Insurance Renewal 2011/12
          Report – FSD – 25/07/2011 (PDF, 206.9 KB, new window)
          Strategic Risk Fund For Insurance

        • Elizabeth

          ### ODT Online Thu, 4 Aug 2011
          DCC plans self-cover
          By David Loughrey
          International reinsurers, worried about their own exposure, refused to offer new cover for underground assets, while council staff refused to pay inflated premiums for reduced cover for above-ground assets. The council is instead considering self-insurance to cover 40% of any repair bill, a requirement for obtaining 60% support from the Government.

          The council voted [at last week’s finance, strategy and development committee meeting] to set aside up to $100,000 for a consultant to evaluate the city’s risk and work out the maximum possible loss the city could face.

          Read more

        • Elizabeth

          ### ODT Online Mon, 28 Nov 2011
          Insurance cover offered – quakes excluded
          By David Loughrey
          Dunedin has been offered insurance cover for the city’s infrastructure assets – providing earthquakes are not included in the possible risks. As long as the city completes risk-profiling and gathers information on “values, perils to be considered and level of excess”, its brokers have said an insurer would consider whether it would provide cover. But council finance, strategy and development committee meeting chairman Cr Syd Brown yesterday said he was not impressed with the offer.
          Read more

        • Elizabeth

          Council staff have delegated authority to take insurance cover, but at the committee meeting, Cr Richard Thomson pushed for more involvement in decision-making on the issue from elected members.

          ### ODT Online Wed, 30 Nov 2011
          Insurance offer before DCC staff
          By David Loughrey
          The future of the Dunedin City Council’s infrastructure insurance is back in the hands of council staff, who will decide whether high prices and strict criteria are worth the cover offered. In the meantime, the city’s $2.4 billion network of above- and below-ground infrastructure assets will remain uninsured.
          Read more

  4. Anonymous

    Never mind major disaster, as witnessed today, Dunedin is paralysed by <3 inches of snow.

  5. Elizabeth

    If council keeps spending “untold millions” (debt funded) on professional rugby and the frigging stadium – plus Carisbrook – is this any wonder, having rooked both DCC and DCHL in the process? The councillors should be SACKED IMMEDIATELY. Central government won’t act to install a commissioner. Why?

    ### ODT Online Thu, 6 Sep 2012
    Premium headache for city
    By Chris Morris and Eileen Goodwin
    Two of Dunedin’s biggest employers, the Dunedin City Council and the Southern District Health Board, face big hikes in insurance premiums as the ripple effects of the Canterbury earthquakes continue to spread. […] The council faced a 21% hike in premiums from $1.74 million to $2.1 million in the same period, just to maintain existing cover, it was confirmed yesterday. That still left $2.4 billion of infrastructure assets uninsured and the council facing a $362,000 shortfall in its insurance budget, council financial controller Maree Clarke said.

    The council’s bad news was presented to yesterday’s finance, strategy and development committee meeting by Mrs Clarke and council insurance broker Peter Cromb. Mr Cromb’s company, Crombie Lockwood Risk Partners, had renegotiated insurance cover for the council in 2012-13 that was similar to the previous year’s. That meant buildings, plant and equipment were covered, but other infrastructure assets, including water pipes and bridges, remained uninsured.

    Read more

    The report to FSD is not available online.

  6. ### ODT Online Thu, 10 Apr 2014
    DCC seeking better deal on insurance
    By Chris Morris
    A Dunedin City Council senior manager has flown to London for meetings aimed at securing better insurance cover for $3.4 billion worth of ratepayers’ assets. Grant McKenzie, the council’s group chief financial manager, flew to England on Saturday for a ”pretty intense” series of meetings spread over three days, council chief executive Dr Sue Bidrose said yesterday. The trip aimed to improve existing insurance arrangements for the council and its companies, which together had assets worth $3.4 billion.
    Read more

  7. ### ODT Online Sat, 3 May 2014
    Uninsured DCC asset value work
    By Chris Morris
    The Dunedin City Council is working to clarify exactly how exposed it is to a repair bill for uninsured infrastructure assets in any future disaster. The council had previously said it had $2.4 billion of uninsured above and below-ground infrastructure assets, but last month gave a lower figure of $1.6 billion.
    Read more

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