The repair bill for KiwiRail’s earthquake-hit railway line between Christchurch and Picton are forecast to reach more than half a billion dollars – leaving insurers on the hook for the potentially increasing claims cost.
The Main North Line tracks were badly damaged from the 7.8 magnitude Kaikoura earthquake in 2016. The repair work on the railway is ongoing until mid-2020, Stuff reported. KiwiRail had reportedly spent $335 million on repairs, and is now expecting another $170 million for further work – bringing the overall repair cost to $515 million.
The publication detailed KiwiRail had received $125 million of its $350 million insurance policy in January. With the repair work ongoing, KiwiRail reportedly told Parliament's Transport and Infrastructure Committee that it could be 18 to 24 months before all of the insurance is finalised. It said KiwiRail favoured negotiated outcomes with insurers, but “is prepared to use litigation against insurers as a tool if required” to get the fair value of its claim.
KiwiRail's expectation for the final value of its insurance claim is commercially sensitive and subject to ongoing, confidential negotiations, KiwiRail investment, planning and risk general manager David Gordon told Stuff.
“We are in the process of finalising joint maintenance arrangements with [the NZ Transport Agency] in locations where we have shared slope stability issues,” Gordon said. “Our priority will be to ensure that this critical transport corridor remains available to road and rail users.”
