Cyclone Gabrielle: Possible $13b repair - Hawke’s Bay infrastructure before housing

A possible $13 billion Cyclone Gabrielle repair will see drastically damaged Hawke’s Bay infrastructure take priority ahead of housing.

Julien Leys, Building Industry Federation chief executive, said fixing roads, bridges, treatment plants, communication services and other systems had to come first.

“Most of the recovery spending will be focused on civil infrastructure and remediation works on critical utilities before housing, especially when it will take time to decide what homes and areas could be part of a managed retreat,” Leys said.

Finance Minister Grant Robertson told TVNZ’s Q+A he expects the total cyclone damage repair cost to be similar to the Canterbury earthquakes, in the $13b region, although some of that will be absorbed by insurance and the existing budgets of government agencies. Transport networks are a real issue, but will take longer to repair than necessities like food, water and shelter, Robertson said.

Cyclone Gabrielle has caused widespread damage to the country’s roading network and the Herald reported 10 state highways closed as of Thursday across the North Island.

Leys said the number of red-stickered Hawke’s Bay homes was yet to be calculated but would be nowhere near the 30,000 red-stickered earthquake-hit Christchurch homes.

So the rebuild was unlikely to have a big impact on reversing the slowdown in residential building, he said.

Linden Estate in Esk Valley. Photo / Greg Miller

“There will be much more work on renovating and repairing existing non-red stickered homes that have been damaged and so we will see more demand for plasterboard, carpets, floorboards, furnishings and chattels. Fortunately, we are in an excellent position with building materials with no shortages of any products and so there should not be any delays getting these to affected areas,” Leys said.

Fletcher Building’s Winstone Wallboards will begin production at its new $400m Tauranga mill and storehouse around May in what could be excellent timing for Hawke’s Bay housing. Fletcher also owned big civil contractor Higgins.

Fulton Hogan, Leighton Contractors and Hawkins owned by ASX-listed Downer are other major businesses in the sector.

Waka Kotahi said on Thursday that more than 100 structures including bridges and big culverts on Hawke’s Bay state highways had been inspected. State Highway 2 was severely damaged between Wairoa and Napier and needed temporary solutions to provide access.

Leys predicted any housing consent delays would be due to getting sign-off from insurers, the Government and territorial authorities.

“The biggest challenge will be finding the professionals to move to Hawke’s Bay and do the work,” he said.

The construction sector suffered a skilled labour shortage for many years.

Devastation at Petane vineyard in Esk Valley. Photo / Supplied

Mikee Santos, Union Network of Migrants co-ordinator, said funding and Government support was available to cyclone victims but many migrant workers faced difficulties getting that.

Migrants would help in the rebuild “but we need to ensure workers are supported as they transition between roles, and that incoming migrants are protected and will not work in a precarious and vulnerable state”.

Westpac economist Michael Gordon said the cyclone would add to medium-term inflation pressures but the scale of the impact was hard to gauge at this early point.

David Kelly, Certified Master Builders chief executive, said his organisation was talking to Hawke’s Bay and Gisborne members about repairs and support.

“Rural communities need the most help from tradespeople right now. They are relatively worse off than the urban areas. As more information emerges, we will have a better understanding of what needs to be done,” Kelly said.

Re-establishing transport links to move products and people was key and he praised work done so far.

“Our experience from previous flooding and extreme wet weather events tells us that from a residential point of view, it is typically the plasterboard that needs to be replaced. If it is assessed to be damaged, it needs to be removed and the framing given time to dry,” he said.

While builders and tradespeople had been busy, this was now starting to soften.

“So there may be more capacity over the coming weeks and months. However, there may still be a need for some specialist skills to be brought in, particularly for larger-scale infrastructure projects,” Kelly said.