Not worth insuring all district bridges

Floods raise question of mitigating asset risk.

Floods raise question of mitigating asset risk.

The fact that many of Gisborne District Council’s bridges are not insured is a big concern, says councillor Graeme Thomson.

But the finance and audit committee was told yesterday that repairs would always be made, even if flooding wiped out all the bridges.

Mr Thomson was speaking of his concern as the committee considered a report assessing the risk to bridges, culverts and other infrastructure.

The report said the main risk to land transport was flooding as a result of poorly-maintained assets, but that did not cause flooding, he said.

The council had just been given a big example in the recent storms of the risk from flooding and what it could do. It was lucky it was in a very small area and catchment and was manageable.

The report also said the risks were mitigated by routine inspections — but these did not stop flooding.

“My concern is, and it always has been, that we have depreciated these assets over the years but that money has been used to loan to other expenditures and we don’t have a kitty of money.”

That was fine so long as the council could manage the programme of replacement against income in future years.

But if there was a major flood and it took out the bridges on the Coast, it would be a different situation.

The council had been told that if that happened it was mitigated by insurance. But recently he read in The Gisborne Herald that the bridges were not insured because it cost too much.

“Therefore, if we had the equivalent of Cyclone Bola or more, where bridges were taken out all the way up the Coast, how many of those bridges are actually insured and is there cash available now in the programme?”

The council had a problem because all that money had been loaned out on other projects, he said.

Committee chairman Brian Wilson said that was the whole point of starting this risk discussion. The first thing they needed to know was the risks and the mitigating circumstance around them.

Lifelines director David Wilson said the risk of flooding around poorly-maintained assets was one of the big findings in the report on the Edgecumbe flooding.

There was a full-time staff team with the role of maintaining flood assets. A lot of this was quite simple, like unblocking culverts and making sure there was not too much growth inside stopbanks.

The council did not insure all of its bridges because it was not worth insuring some of them. The premiums to insure every bridge outweighed any cover it would get.

Strategic bridges were insured.

“But the rationale at the time was that an event that took out all the bridges in the district would be very unlikely and we would look at how we would replace them as we went through.”

“It is hard to imagine an event that would take out enough bridges to warrant the insurance cover that would be needed.”

The council had an asset plan for bridges and a renewals programme for strengthening or upgrading bridges, or raising or completely replacing them.

The last long-term plan that had just been approved included sufficient budget to ensure the council could do bridge work for the next 10 years.

Larry Foster said for totally- insured bridges, the council was totally reliant on the insurance companies paying out as urgently as possible. Going on incidents around the country like Kaikoura, the companies did not have the best record of keeping to their agreement.

It begged the question that if there was an event, would the council be in a position to replace them as soon as possible — and how would they fund it if the insurance was not on time?

“When it comes to repairs or critical things we just do it, then we look at how we are going to make sure the works are paid for,” Mr Wilson said.

For long-term fixes they were confident because of the relationship they had and being part of the BIOPLAS group with local government. They had billions of dollars in cover, which gave an economy of scale to any council cover.

Shannon Dowsing said this was about mitigating risks, not trying to avoid them.

“We can only do as much as we can. Taking a sensible approach on insurance is the right thing to do.”

The council had access to funds at any stage. It could increase its debt cap or do what it needed to.

The council needed to take a pragmatic attitude, based on what was achieveable in the long term.

Pat Seymour said in the last six months of the financial year there had been a pushback as the council tried to get into a more suitable finanial situation.

Tairawhiti Roads and the council team had really responded after the heavy rain but if there had been a slightly better level of water table maintenance, the water would have been diverted to the right place.

The fact that many of Gisborne District Council’s bridges are not insured is a big concern, says councillor Graeme Thomson.

But the finance and audit committee was told yesterday that repairs would always be made, even if flooding wiped out all the bridges.

Mr Thomson was speaking of his concern as the committee considered a report assessing the risk to bridges, culverts and other infrastructure.

The report said the main risk to land transport was flooding as a result of poorly-maintained assets, but that did not cause flooding, he said.

The council had just been given a big example in the recent storms of the risk from flooding and what it could do. It was lucky it was in a very small area and catchment and was manageable.

The report also said the risks were mitigated by routine inspections — but these did not stop flooding.

“My concern is, and it always has been, that we have depreciated these assets over the years but that money has been used to loan to other expenditures and we don’t have a kitty of money.”

That was fine so long as the council could manage the programme of replacement against income in future years.

But if there was a major flood and it took out the bridges on the Coast, it would be a different situation.

The council had been told that if that happened it was mitigated by insurance. But recently he read in The Gisborne Herald that the bridges were not insured because it cost too much.

“Therefore, if we had the equivalent of Cyclone Bola or more, where bridges were taken out all the way up the Coast, how many of those bridges are actually insured and is there cash available now in the programme?”

The council had a problem because all that money had been loaned out on other projects, he said.

Committee chairman Brian Wilson said that was the whole point of starting this risk discussion. The first thing they needed to know was the risks and the mitigating circumstance around them.

Lifelines director David Wilson said the risk of flooding around poorly-maintained assets was one of the big findings in the report on the Edgecumbe flooding.

There was a full-time staff team with the role of maintaining flood assets. A lot of this was quite simple, like unblocking culverts and making sure there was not too much growth inside stopbanks.

The council did not insure all of its bridges because it was not worth insuring some of them. The premiums to insure every bridge outweighed any cover it would get.

Strategic bridges were insured.

“But the rationale at the time was that an event that took out all the bridges in the district would be very unlikely and we would look at how we would replace them as we went through.”

“It is hard to imagine an event that would take out enough bridges to warrant the insurance cover that would be needed.”

The council had an asset plan for bridges and a renewals programme for strengthening or upgrading bridges, or raising or completely replacing them.

The last long-term plan that had just been approved included sufficient budget to ensure the council could do bridge work for the next 10 years.

Larry Foster said for totally- insured bridges, the council was totally reliant on the insurance companies paying out as urgently as possible. Going on incidents around the country like Kaikoura, the companies did not have the best record of keeping to their agreement.

It begged the question that if there was an event, would the council be in a position to replace them as soon as possible — and how would they fund it if the insurance was not on time?

“When it comes to repairs or critical things we just do it, then we look at how we are going to make sure the works are paid for,” Mr Wilson said.

For long-term fixes they were confident because of the relationship they had and being part of the BIOPLAS group with local government. They had billions of dollars in cover, which gave an economy of scale to any council cover.

Shannon Dowsing said this was about mitigating risks, not trying to avoid them.

“We can only do as much as we can. Taking a sensible approach on insurance is the right thing to do.”

The council had access to funds at any stage. It could increase its debt cap or do what it needed to.

The council needed to take a pragmatic attitude, based on what was achieveable in the long term.

Pat Seymour said in the last six months of the financial year there had been a pushback as the council tried to get into a more suitable finanial situation.

Tairawhiti Roads and the council team had really responded after the heavy rain but if there had been a slightly better level of water table maintenance, the water would have been diverted to the right place.

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