Finance and Funding Recovery Programme
The cost of earthquake damage in 2010 and 2011 is currently estimated to exceed $25 billion.
EQC, private insurance companies and international reinsurers will cover a significant proportion of the financial cost of the damage and subsequent rebuild. The financial impacts will continue into the future as resources will beare used to rebuild, rather than grow, the capital stock.
The pool of resources available for the recovery is not unlimited, therefore we are currently directing the Funding and Finance Programme towards identifying ways to:
- expand the pool of funding as much and as cost-effectively as possible, and
- use the pool of funding as effectively as possible so that recovery outcomes can be maximised.
This means building an attractive financing environment that signals to the local, national and international financial community that greater Christchurch opportunities represent an attractive risk-return balance. Doing so depends on the government promoting the right framework of policy, institutions, legislation and regulations so that positive engagement with the private sector can be realised.
Good decision making will lead to better funding outcomes. This process involves investment prioritisation and sequencing, robust business case analysis, openness to selecting the best funding options from the full range of financing possibilities and effective procurement and delivery monitoring.
Objectives of the programme
The Finance and Funding Programme seeks to:
- ensure central and local government funding for the recovery is spent effectively, efficiently and demonstrates value for money;
- promote the right framework of policy, institutions, legislation and regulations so that positive engagement with the private sector can be realised;
- build an attractive financing environment, which signals that greater Christchurch opportunities represent an attractive risk-return balance.
The use of Better Business Cases will play a central role in the assessment of projects to maximise benefits arising from these investments. This process considers proposals from strategic, economic, commercial, financial and management perspectives. More information can be found at the Treasury's National Infrastructure Unit website.
See the Economic Recovery Programme for information relating to building economic growth in greater Christchurch.
CERA is developing programmes of work with Treasury and other key government departments to:
- ensure that central and local government funding for the recovery is spent effectively, efficiently and demonstrates value for money. This includes CERF management plans and cost-sharing arrangements.
- identify the overall cost/spend at a programme level to meet the recovery goals;
- develop a risk model and prioritisation framework for proposed expenditure;
- identify of sources of funding from an analysis of capital markets;
- agree governance, funding and monitoring arrangements with the Stronger Christchurch Infrastructure Rebuild Team (SCIRT) to demonstrate value for money;
- identify the risks that the private sector may perceive to be associated with the Christchurch investment environment;
- identify what government interventions will help provide confidence to the private sector to reinvest; and
- develop an investment prospectus that helps to answer the question: "Why Christchurch?"
More information will be provided when planning for this work programme is finalised.