As The Dust Settles
Rebuilding competitiveness after a major natural disaster
Gerard Quinn, TCI Conference, San Sebastian, October 2012
3
Contents
1. Christchurch as it was2. The Events3. The impact4. The Rebuild – conditions, issues and actions5. Future Christchurch
Christchurch
Palmerston North
Napier
TaurangaAuckland
Dunedin
Wellington
Christchurch
5
6
An attractive and vibrant city
7
Supported by and supporting a rural hinterland
8
Two of the major events
• Mag 7.1• 40 km west of Christchurch• Depth 10 km• 40 seconds• PGA 1.26g• 0 fatalities, 2 serious injuries, 100
injuries• Insurance Claims $3Bn
• Mag 6.3• 10 km southeast of Christchurch
• Depth 5 km• 12seconds• PGA 2.2g
• 185 fatalities, many injuries• Repair cost $30Bn
Feb
11
12
13
Why was this disaster unusual ?
18
19
The entire heart and central business district (CBD) of Christchurch was decimated, with 1 800 commercial buildings being demolished.
20
Red Zone Cordon
23 Feb 201104 Oct 2012
21
Issues – Insurance
• 80% economic losses covered, but ….– The Cordon - Definition of “untenantable” – for
asset replacement and B.I.– Insurance won’t progress claims until geotechnical
stability and rebuild decisions are made– Work in progress insurance for builders and
developers– Local government infrastructure reinsurance– Increased premiums and excesses
22
Activity Hot and Cold spots
Affected 7000 businesses, 60 000 employees
23
500 000t of liquefaction
24
Residential land zones – “uneconomic to rebuild”
25
Rebuild Issue - Land Stability
Category
Red Land is uneconomic to repair – no dwellings allowed
White Further work required to categorise
Green / Grey Future land damage from liquefaction is unlikely. You can usestandard foundations for concrete slabs or timber floors
Green / Yellow Minor to moderate land damage from liquefaction is possible infuture significant earthquakes.You can use standard timber piled foundations for houses withlightweight cladding and roofing and suspended timber floorsOr enhanced concrete foundations – i.e. more robust floor slabsthat better tie the structure together
Green / Blue Moderate to significant land damage from liquefaction ispossible in future significant earthquakes. Site-specificgeotechnical investigation and specific engineering foundationdesign is required.
These categories describe how the land is expected to perform in future earthquakes
26
Impact on people
• Psychological impact – Affects managers, staff, customers– Loss of confidence and identity– Uncertainty, lack of control
• Health impact – Anxiety, respiratory, PND, stress-related
• Economic impact– Loss of employment in some sectors– Loss of homes in red zone– Risk of flight of capital and talent
• Community spirit increased
27
Population - Migration of registered individual taxpayers into Canterbury
Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12
-1,500
-1,000
-500
0
500
1,000
Arrivals Departures Net Migration
Population decline 2.5%, to be more than replaced by rebuild workforce
28
Why reinvest in Christchurch
• Greater Christchurch provides • 12 %of NZ’s GDP• 70 % of the economic output in Canterbury• 250 000 jobs • 400 000 residents
• South Island hub• the main entry point for tourists coming to the South Island• Major import/export infrastructure• Canterbury still has economic strengths and vibrant
communities
29
Why rebuild the city CBD ?
• The centre of a city contains a higher density of people and businesses– more connected, can share ideas and communicate more
easily, and provide easier access to the labour market– lower transaction costs and access to common services– doubling in employment density = 2-4% increase in
productivity• Without a central city, greater Christchurch is losing up to $395
million a year in productivity.
• A vibrant centre helps attract people and finance• A city needs a heart, a memorable identity
30
The opportunity
• The new CBD will address issues such as :– Too much land in fragmented titles– Variable building quality– Inefficient spatial planning– Infrastructure to support key business sectors– Opportunity for a smart, sustainable, eco-friendly
heart– Move beyond lifestyle to attract talent in a
competitive global talent market
31
Favourable factors for a rebuild
EQC covers damage caused by earthquakes, landslips, volcanic eruptions, hydrothermal activity and tsunami.
The total cost to insurers of rebuilding has been estimated at NZ$30 billion, making it by far New Zealand's costliest natural disaster, and the third-costliest earthquake worldwide. EQC Reserves $11Bn.
Evidence-based Economic Development strategy was in development
Important relationships already existed
33
Local organisations – first responders
Canterbury Business
Recovery Trust
Custodian of the long-term economic development strategy
Immediate business Survival
Received and allocated private sector and public donations to businesses
• Post rebuild growth path• Water• Long term • Redistribution of economic
hotspots• Long term outcomes not
constraints
• Access to premises and information, relocation
• Loss of customers• Forced suspension of
trading due damage and DEE
• Loss of key staff
• Assessment• Equity
34
Recover Canterbury
WHAT – Single point of contact.– Christchurch Earthquake Support Package $260M
• Employer subsidy• Employee grant
– Recovery planning , Referrals, Mentoring, Training, Funding
WHO– CDC, CECC, 6 Govt Ministries, sharing information and resources !!!
HOW – Surveyed businesses– Call centre– www.recovercanterbury.co.nz– Business Recovery Coordinators
35
Love Christchurch campaign
36
Putting the City on Your Side
• Cluster Managers know businesses and sectors and are trusted by them
• Nature of businesses affects their recovery – compare the mobility of professional services firms = dislocation, vs engineering with 50t machines = relocation.– Business choices to relocate are off-shore– Fighting for Council information and decisions,
quick consents, development contribution waivers
Re:START
38
Central city Plans – aspirational, inspirational, citizen-driven
Kia Kaha(Be Strong)
39
Recovery Strategy required Focused Organisations
• CERA• Scale of disaster and need for public money requires
integrated and timely decision making across a range of organisations• Own Minister with special powers – e.g. land
acquisition
• SCIRT• Horizontal infrastructure ($2.2Bn)
• CCDU• The central city rebuild
40
Recovery Strategy
Factors ObjectivesLeadership • Recovery
• Integration• Partnership
People • Workforce Dynamics• Quality of Life• Renewing regional brand
Business Environment • Capital availability (confidence)• Business friendly • Worst affected sector support
(tourism, hospitality, education)• Encouraging and investing in
innovation• Leveraged infrastructure investment
41
Local Industry Participation Project
• Primary actions– Get local and NZ companies into supply chain– Change Government procurement policies to include Value
for Money (overall economic impact) and Whole of life (not just cheapest purchase price) principles
– Collaborate Canterbury to encourage JVs to achieve scale– Work with clusters in other regions to mitigate impact and
maximise economic advantage• Secondary consequences
– Local sector capability profile and capability increased– Inbound procurement visits from Australia (ICN)– Export sales to Australian transport industry
42
Demand for labour – scenario planning
Level of Damage
TimeLevel of Damage
TimeLevel of Damage
TimeLevel of Damage
TimeLevel of Damage
TimeLevel of Damage
Time
Infrastructure $3 billion 6 years $3 billion 3 years $3 billion 7 years $3 billion 10 years $3 billion 6 years $3 billion 6 years10,000 houses
10,000 houses
10,000 houses
10,000 houses
10,000 houses
10,000 houses
$4.3 billion $4.3 billion $4.3 billion $4.3 billion $4.3 billion $4.3 billion105,606 houses
105,606 houses
105,606 houses
105,606 houses
105,606 houses
105,606 houses
$3.7 billion $3.7 billion $3.7 billion $3.7 billion $3.7 billion $3.7 billionCommercial $4 billion 15 years $4 billion 10 years $4 billion 20 years $4 billion 25 years $6 billion 15 years $10 billion 15 years
7 years
10 years
10 years
4 years
4 years
4 years
4 years
Scenario 2 Scenario 3 Scenario 4 Scenario 5
2 years 7 yearsResidential New 4 years
Residential Repair
4 years
Base Scenario Scenario 1
2 years
•Scenario driven•Not just at Trades level•An additional 23,871 construction workers will be required with a peak demand for labour being somewhere around quarter 4 2013.
Scenario 3 – Reduced BAU and slower pace, 10,000 additional workers
2010 Q2
2010 Q4
2011 Q2
2011 Q4
2012 Q2
2012 Q4
2013 Q2
2013 Q4
2014 Q2
2014 Q4
2015 Q2
2015 Q4
2016 Q2
2016 Q4
2017 Q2
2017 Q4
2018 Q2
2018 Q4
2019 Q2
2019 Q4
2020 Q2
2020 Q4
0
5000
10000
15000
20000
25000
30000
35000
BAU with Reduction Infrastructure Residential New BuildsResidential Repair Commercial
2010 Q2
2010 Q4
2011 Q2
2011 Q4
2012 Q2
2012 Q4
2013 Q2
2013 Q4
2014 Q2
2014 Q4
2015 Q2
2015 Q4
2016 Q2
2016 Q4
2017 Q2
2017 Q4
2018 Q2
2018 Q4
2019 Q2
2019 Q4
2020 Q2
2020 Q4
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
BAU with Reduction Infrastructure Residential New BuildsResidential Repair Commercial
Scenario 1 – No BAU Adjustment30,000 additional workers
required
44
Building Resilience
Resilience
Survive in a Crisis
Thrive in an uncertain world
Resilient firms have to exist in a resilient community or else staff and customers leave
45
Building Resilience – www.resorgs.org.nz
Resilience = Self-reliance + Interdependence
Leadership & Culture
Networks Change Ready
Not static - Can be eroded and rebuilt
46
Embrace Innovative thinking – smaller scale
• Openness and collaboration between firms increased.– HP , IBM donated IT equipment to SMEs
• Late shopping in CBD Re:Start to combat malls• Cloud computing• A cardboard cathedral ?• A combined cathedral ?• Vibration reduced piling system
47
Innovative thinking – large scale, longer term
• UC Futures– Student Employability Hub– Student Innovation Centre
• Innovation precinct– 40+ ICT companies collaborative campus
• City and environmental redesign to reduce crime
• Schools rationalisation
48
Case study Tourism
Jan-
10
Feb-
10
Mar
-10
Apr-
10
May
-10
Jun-
10
Jul-1
0
Aug-
10
Sep-
10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
Apr-
11
May
-11
Jun-
11
Jul-1
1
Aug-
11
Sep-
11
Oct
-11
Nov
-11
Dec
-11
Jan-
12
Feb-
12
Mar
-12
Apr-
12
May
-12
Jun-
12
Jul-1
2
-50%-45%-40%-35%-30%-25%-20%-15%-10%
-5%0%5%
10%15%20%25%30%35%40%
8%6%
3%
0%1%
3%
3%
3%
0%-4% -3%-5%
-1%1%
-5%
-2% 0%
2%
-2%
6%
34%
16%
6%
3%-2%
-8%-10%
-4%-3%
3%
-5%
9%
5%1%
4%
-6%
-1%-1%
-8% -8%
-15%
-2%
-9%-7%
-24%
-46%
-42%-38%
-38%-39%
-30%
-32%
-28%
-34%-29%
-32%
-43%-42%-40%-42%-43%-45%
International Guest Nights All NZ vs Canterbury
International Guest Nights ... Note: this data compares growth perform-ance vs same month of previous year up to June 2012, from February 2012 onwards compares growth to prequake results of 2010
• Tourism sector in Canterbury is worth $2.3 billion pa• South Island tourism is dependent on Christchurch working• Major “physical” problems with Christchurch visitor infrastructure
especially accommodation
Stage 1 – Survive2012 - 2016
Existing business retention
Planning for “New” Christchurch
Development and implementation of transition plan
High priority project rebuild commences
Stage 2 – Recover
2017 - 2025 Major rebuild
construction (75%) completed
Marketing of “New” Christchurch
Communicate milestones achieved
Stage3 – Grow 2026 - 2032
Complete remaining rebuild projects
Market Christchurch as Australasia’s best visitor destination
Tourism phases of recovery
Gateway to South Island
High Priority Projects – Phase 1 & 2
1. Accommodation re-instatement and new builds
2. New convention centre
3. Ensuring “transitional city” works for visitors
4. Air Services : Re-instatement of Tasman capacity and development of new long-haul direct routes
5. Creation of new visitor attractions
6. Developing a new metro sports facility & improved marketing of sports events
51
Enrolment of international fee paying students
2007 2008 2009 2010 2011
55,000
60,000
65,000
70,000
75,000
80,000
85,000
90,000
95,000
100,000
105,000
110,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
16,000
17,000
18,000
Rest of New Zealand (LHS) Canterbury (RHS)
52
Intl Education – recovery strategy
STRATEGIC OBJECTIVES IMPACTINTERVENTIONS
Expanding capacity and capability
Aligning and Engaging industry
Retaining student value
Promoting the Value Proposition
Raise capacity
Utilise Alumni
Develop products
Market Development
Market Penetration
Remove impediments
Efficient Sector Support
Articulate to study or work
Active advocacy on national issues
Change relnship with Study CHC
Leverage IERNZ and CCC relationships
Nett Income
Number of
students
Increase value add segment numbersMaximise return per student
Return per
Student
Investment in Infra.
Soft Infra . & Sector Support
Sector Contbn
Boost Safe Student Programme
Tertiary Expos
Industry Internship programme
Encourage stays
Korea, India market campaigns
Destination Mktg campaign
Contestable mktg Fund
Inbound agent programme
Develop offshore delivery products
Attract new providers
Alumni Kit & Events
Alumni database
Support Student Village project
Motivate secondary segment providers
53
Politics of the rebuild
• Business Leaders’ Group want influence on G and LG actions– Significant investors in people and assets– Committee for Christchurch– Publicly opposed CCC actions and decisions
• Central Government calling the shots and expecting local Government to foot much of the cost – sell CCC assets ?
• Competing rebuild sectors – issues of economics vs equity– Housing (EQC, Insurers, PS) – Amenities (LG)– Infrastructure (G, LG) – Commercial (PS)
• Suspension of elections for regional council• Changes to individual property and appeal rights
54
Indelendent
Finding : A set of forced marriages caused a degree of confusion, inefficiency and duplication of controlRecommendation : clear authority and closer links with businesses and community organisations
56
A new heart
57
A new essence
• Changed skyline• Innovation centres• A modern, safe,
smart city which attracts global talent
• Increased productivity
• A new breed of leaders and entrepreneurs
58
LEARNINGS
1. Uncertainty is a major problem. Communication is key.2. Have networks already established which provides resilience
generally3. Direction and pace is important.
• There is a window of opportunity within which to set the direction of recovery and growth to retain people and capital.
• Rebuilding as fast as you can may not be the optimum pace in economic terms.
4. The presence and effectiveness of development agencies and strong clusters is vital to coming out of the disaster better than when you went in.
5. Opportunities to increase competitiveness have come not from a single asset or an investment, but from the combinations of people, place, investment and attitude. • Bring in new people who aren't scarred, scared and tired.
Christchurch
Palmerston North
Napier
TaurangaAuckland
Dunedin
Wellington
Thanks to Fairfax Media
60
Mar-07 Jul-07 Nov-07 Mar-08 Jul-08 Nov-08 Mar-09 Jul-09 Nov-09 Mar-10 Jul-10 Nov-10 Mar-11 Jul-11 Nov-11 Mar-12
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Hotels Motels Backpackers Holiday Parks
Capacity of accommodation establishments in Christchurch City(stay unit nights)
61
Immediate Response
• 2010 - Responsibility shared between Civil Defence and Christchurch City Council
• 2011 Scale of event required reallocation of responsibilities
Magnitude vs Time
63
Everything takes on a different perspective
64
Estimate of real gross regional domestic product - levels($ millions, seasonally adjusted in 1995/96 prices, measured quarterly)
Jun-
07
Sep-
07
Dec-0
7
Mar
-08
Jun-
08
Sep-
08
Dec-0
8
Mar
-09
Jun-
09
Sep-
09
Dec-0
9
Mar
-10
Jun-
10
Sep-
10
Dec-1
0
Mar
-11
Jun-
11
Sep-
11
Dec-1
1
Mar
-12
$30,000
$30,200
$30,400
$30,600
$30,800
$31,000
$31,200
$31,400
$3,500
$3,550
$3,600
$3,650
$3,700
$3,750
$3,800
$3,850
$3,900
$3,950
$4,000
Rest of New Zealand (LHS) Canterbury (RHS)
65
International Education – Change of Marketing to “New”
66
Being real about it …… involve cluster members
Top Related