13 August 2004

$10+ million bill for flood response and damage to river scheme assets

For immediate release: Friday 13 August 2004 Environment Bay of Plenty will have a $10+ million bill for its flood response and recovery work – and it is asking the Government to help pay for it.

The regional council will put forward a joint application with Whakatane District Council and Opotiki District Council next week. Chief executive Jeff Jones is confident the council has “a very strong case” for reimbursement, both for urgent work during the emergency and for ongoing and extensive repairs to stopbanks, drains and river protection works damaged by last month’s floods. Worst hit are two major river schemes, the Rangitaiki-Tarawera Rivers Scheme and Whakatane-Waimana Rivers Scheme, which both feed into the Rangitaiki Plains.

The Government’s Disaster Relief Fund could fund up to 60% of response and recovery costs. Mr Jones is also hoping for a contribution from a special government assistance fund specifically for communities with a “severely limited” ability to pay. “Remember that this is the third major disaster to hit the Rangitaiki Plains in 17 years. In 1987, the Edgecumbe earthquake caused major damage to the Rangitaiki River stopbanks and river scheme ratepayers had to pay for that to be fixed from rates and borrowings. Then there were the major floods of 1998, again with huge associated costs. Many landowners have still not totally recovered financially from these, with much of the loans still being paid off.”

Even with Government support, a proportion of the cost is likely to fall back on river scheme ratepayers, who directly fund 90% of all scheme costs. The remaining 10% is considered of regional benefit and paid by regional rates.

The region’s river schemes have emergency reserves totalling $1.6 million but that will probably not be enough to cover any remaining costs, Mr Jones says. Environment Bay of Plenty will be looking for funding contributions from other sources. As part of its application, Environment Bay of Plenty will seek reimbursement for response costs, such as filling the breach in the Rangitaiki River stopbank.

The cost of pumping water off the Rangitaiki Plains to reduce ongoing damage is likely to total $700,000 alone. Mr Jones says the regional council will initially pay for the pumping and then seek to recover costs from the Government and other sources. Any remaining costs will have to be picked up by scheme ratepayers.

ENDS

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