Christchurch earthquake: Repair bill nearer $20b, says Fletcher exec

Mark Binns. Photo / Kenny Rodger

Fletcher Building infrastructure chief Mark Binns has questioned Treasury earthquake damage estimates, saying repairs could cost $20 billion, not the $15 billion forecast.

Speaking on Radio New Zealand yesterday, the head of the country's largest construction firm, which has the Earthquake Commission mandate, said his calculations showed a higher cost.

"I've seen the Treasury forecasts. I don't know what assumptions they made but I think there's going to be a significant margin of error in that number. The $15 billion? I'm saying I don't know and I would suggest that it's very difficult for people to get a handle on that number.

"I sat down on the weekend on the back of a fag packet and just did some numbers on infrastructure, residential and commercial and I came up with $20 billion so it was in the same ballpark and it's going to take some time to really get some accurate numbers."

Analysts upgraded Fletcher's fortunes after the quake, even though the $5 billion NZX listed business downgraded its earnings outlook by $14 million to $24 million for the June 30, 2011 financial year.

Binns called for the Government to establish a new special agency of "high-quality bureaucrats".

That organisation needed expert advice from three or four high-calibre construction bosses and to co-ordinate all the planning of the reconstruction.

"You can't consult this thing to death and end up with paralysis through analysis," he said.

A tour inside the city cordon shortly after the quake left him astonished. "It was a sobering and humbling experience to see the devastation. It's just massive. It's a game changer and needs a rethink, I think," he said.

Work flows had to be prioritised so manpower needs could be assessed and housing for workers gauged.

"When we had the first quake there was a view we might be able to do all the work just with Canterbury people. That has changed. There will be a need for workers from outside Canterbury, it's just a question of how far afield we will have to go," he said.

Fulton Hogan and Hawkins were working on urgent repairs, he said, but the biggest task facing the building firms was the reconstruction of sewers, bridges and water supply, schools and hospitals, he said.

Fletcher was not finished with its emergency response work which would take another two to four weeks.

Some people were still living in houses which needed repairs, which Binns described as "sub-optimal".

The concept of suburbs being abandoned and new subdivisions being built was possible, he said.