Early estimates put cost of Christchurch quake at $6 billion - PM
UPDATED: Prime Minister John Key says early estimates of the cost of yesterday's devastating Christchurch earthquake are $6 billion.
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Prime Minister John Key says early estimates of the cost of yesterday's devastating Christchurch earthquake are $6-$8 billion.
Speaking to media after an emergency cabinet meeting at which a national state of emergency was declared, Mr Key said the disaster would put "a significant dent in the resources of EQC".
The Government can absorb the cost of Canterbury's devastating earthquake, Finance Minister Bill English says.
"It is a setback but we can handle it. These are bigger costs, but we are in a sound enough position to handle it," Mr English said.
The Government may have to borrow more money to cover the costs, but did not expect the country's credit rating to be downgraded, Mr English said.
"Our economy is fundamentally sound. This is another knock, but we can take it," he said.
The Government would not give details on how much the damage from yesterday's 6.3 magnitude earthquake could cost, but Prime Minister John Key would not rule out estimates as high as $16 billion -- more than twice as much as the September quake.
No one was in a position to assess the cost, Mr Key warned.He said the Earthquake Commission (EQC) would treat yesterday's quake as a separate event to the September 4 one, and he expected the commission to receive another 100,000 claims.
EQC would pay out the first $1.5b to cover the cost of claims for damage to residential properties.
The next $2.5b would be covered by "reinsurance" overseas and the outstanding balance would be covered by private insurance companies or the Government.
"Obviously that is a significant dent in both the resources of EQC, and a significant impact on the reinsurers to the tune of $5b," Mr Key said.
NBR staff
Wed, 23 Feb 2011
Wed, 23 Feb 2011
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Early estimates put cost of Christchurch quake at $6 billion - PM
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