Repair plan hoped to satisfy insurers

Posted 04 Jul 2012 by MediaStuff
Posted in Business , Insurance , Rebuild , Media
This item was posted on the Stuff.co.nz website - click here to view the original

 

Lyttelton Port of Christchurch is to submit a working repair plan for more than 500 quake-damaged port assets in the hope it will provide a breakthrough in a long-running wrangle with insurers.

The plan is to report "reinstatement" work for damaged assets to insurers and separate these from longer-term development plans the port is planning.

By submitting that plan it is looking for a breakthrough with Vero, NZI and QBE.

By the end of March these insurers had paid $35.7 million towards repairs, but the payout stalled due to arguments about whether a temporary repair plan was pushing into permanent repair territory.

At that point the port started winding back its repairs programme which had run to $10m-$20m, putting a new cruise ship facility on hold.

The total cost of insurance damage has been put in the order of $500m.

Yesterday, LPC chairman Rodger Fisher said under the port's "pay as you go" insurance policy the company was not due any further money until it finalised its asset reinstatement plan.

The working relationship between the port company and the insurers had improved although tensions between the insurers and insured were normal. He added there was always debate about "betterment" and whether assets were fully destroyed or not.

"It's just a process we're working through. Our people are working with them and their assessors. It's just a long drawn out game and we're working through that."

A Vero spokesman said engineers from LPC and the insurers including Vero continue to discuss what items covered by insurance policies were damaged by the earthquakes.

LPC has a board meeting planned over two days this week to discuss the port's preferred way forward on its redevelopment plans.

Chief executive Peter Davie said in terms of the dual components of reinstatement and development, the port had put the concept to the board, with further discussion to take place at board level this week before the plan was then put to insurers.

He did not want to discuss the claim amounts surrounding the different assets or the total amount being claimed from insurers.

Reinstatement work over five to seven years would be separate from a staged development plan that could take up to 30 years to complete.

"It's partially around reinstatement, it's partially around development for future capacity as well." The port has in recent months experienced good growth in export volumes, tracking at about 15 per cent better year on year.

Part of the reason for separating reinstatement and future development was to address an insurance policy that specified that insurers would "pay as you go" as the repairs were carried out by contractors, Davie said.

"It's all of our damaged facilities. We've got buildings, breakwalls, seawalls, paving. You've got conveyors, wharves."More than 500 assets were to be repaired or rebuilt under the reinstatement plan, Davie said.

Particular wharves included Cashin Quay, Z Berth, the oil berth and inner harbour jetties numbered 2, 3 and 7.

While the port had started working with its insurers on the idea, it had yet to formally present the insurers with a working plan.

"We need board approval (in the next couple of days) that we're heading in the right direction, then we've got to put it in a form for the insurers as well."

The 30-year development plan would draw on previous research done by the port.

This article was sourced from another website - view the original article.

Discussion

Related Items

CTV News   Wednesday 16 April

CTV News Wednesday 16 April

Wednesday, 16 April 2014 7:08 p.m. by MediaCTV