Eligibility for essential infrastructure repair or rebuild following an emergency

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Following an emergency and subject to Cabinet approval, the Government funds 60 percent of eligible costs. Eligible costs are costs that are above the local authority’s threshold. The funds are for rebuilding or repairing damaged essential infrastructure, river management systems and community assets. This approach works within Section 33 of the Guide to the National CDEM Plan.

Essential infrastructure assets include:

  • sewerage,
  • water supply,
  • storm water,
  • electrical and gas facilities; and
  • other structures such as retaining walls and tunnels that essential services depend on.

Essential infrastructure eligibility

To be eligible for the 60 percent Government contribution, the asset must:

  • be owned by the local authority,
  • be damaged as the result of an emergency, and
  • meet at least one of the following two criteria.
    • The damage impacts on the ability of the network/asset to perform and function as intended.
    • If the damage has not yet resulted in performance issues, failure of the asset is likely to be imminent.

If the damage does not meet either of the two criteria above, there are still eligibility options. There are four extra considerations if the damage does not meet the two criteria.

  • Is it a critical asset? Including main pipelines, lifelines or life safety assets.
  • Is the asset in a critical location or is it for critical community infrastructure? For example a hospital or school.
  • Are there unacceptably high operating costs for the local authority because of the damage?
  • Are there critical interdependencies? 

 Rebuild and repair projects should be assessed against these criteria before work begins. The National Emergency Management Agency (NEMA) can help with this. This will give certainty to both the local authority and NEMA.

The flowchart and key questions on this page give more guidance on the:

  • eligibility criteria,
  • considerations, and
  • decision-making process.

 Insurance that relates to a damaged asset will be considered when determining funding.

How these criteria were developed

The criteria and considerations were developed from the Christchurch three-waters Horizontal Infrastructure Programme. The criteria focus on a ‘network performance’ approach to determine the work that needs to be done. As opposed to repairing all damage, regardless of whether the damage impacts on the ability of the asset to perform or function as intended. 

The same criteria were applied to the rebuild and repair of essential infrastructure damaged in the 2016 Kaikōura Earthquake. They have been used for all essential infrastructure recovery programmes after this earthquake. They will be used in all future emergencies. 

Betterment

‘Betterment’ is any rebuild and repair work that changes the original infrastructure. These changes must be more than a ‘like-for-like’ repair or replacement. For example, increases in capacity and resilience, or improved or extra components. 

Betterment may be ‘deliberate’ or ‘unintentional’. 

Deliberate betterment happens when repair work intends to:

  • increase capacity,
  • improve resilience, or
  • add better components. 

These changes are more than what is needed to restore network/asset performance.

Deliberate betterment is not usually eligible for the 60 percent Government funding contribution. But local authorities can make an application for special policy financial support.

Using modern materials and construction techniques is not considered deliberate betterment. It can be eligible for government contribution.

Local authorities can fund betterment components of the work carried out. 
Deliberate betterment costs will be separated and will not be eligible for Government funding. Unless they Cabinet approves them.

Temporary repairs

Temporary repairs are interim repair work necessary to keep essential infrastructure networks operational. They provide an acceptable level of service until there is a permanent solution. This type of work can also result in a permanent repair. 

Temporary repairs are usually completed during the response phase of an emergency event. 

To be eligible for government funding, temporary repairs must meet the criteria and/or considerations above. 

A temporary repair will not be eligible for funding if it: 

  • is required on an asset where permanent repair work has already been completed; 
  • relates to addressing land drainage issues where there is/was no infrastructure (for example, flooding, or clean up after flooding);
  • would not qualify for funding under the criteria or considerations for infrastructure repair; or
  • is work that has already been assessed as not eligible.

Key eligibility criteria and considerations for government funding

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Eligibility criteria and considerations

Is the asset owned by the local authority and damaged because of an emergency?

The asset:

  • is a local authority-owned community asset and has been properly maintained.
  • existed before the emergency and was damaged by that emergency*.

*‘Emergency’ is defined in the CDEM Act 2002.

Is there a ‘betterment’ component?

Betterment can be eligible for the 60 percent Government contribution when:

  • improvements to the network/asset were unintentional and the result of required changes to restore the network/asset, or
  • the work used modern materials and construction techniques.

Betterment is not eligible for the 60 percent Government funding contribution when:

  • work intentionally makes improvements above what is needed to restore the network/asset,
  • the local authority can fund the deliberate betterment, or
  • any government funding contribution needs an application for special policy financial support.

Note: any betterment costs will be separated. They will be discussed between the local authority and NEMA separately.

Is the damage impacting on network/asset performance?

  • Is the performance of the network/asset affected by the damage? 
  • Is the asset serviceable and able to function as intended? 

Is failure likely to be imminent?

Has the damage caused performance issues? If not, is it likely to cause imminent failure? Will this stop the network/asset performing and functioning as intended?

Is it a critical asset?

  • Is the damaged asset a significant asset? For example a large diameter water main or sewerage pipeline for a large number of customers.
  • Is the damaged asset critical to network performance and functionality? 
  • Is the damaged asset a life safety feature? For example, a stop bank?

Is it in a critical location?

  • Is the damaged asset servicing critical community infrastructure? For example, schools, hospitals, fire stations.
  • Is the damaged asset servicing commercial or industrial activities? 
  • Would failure of the damaged asset cause damage to other infrastructure or property?

Is damage causing unacceptably high operating expenditure?

  • Are there significant operating cost implications?

Are there critical interdependencies?

  • Is there significant roading work to be carried out?
  • Are there other assets programmed for rebuilding and repair in the same area? Or that have general alignment?

Construction

Project construction progresses.

Handover

  • A project will be signed off as complete when:
    • construction is finished, and 
    • ‘as built plans’ and other documentation is handed over to the local authority.
  • A project will be signed off as complete at the end of the 12 month defects liability period. The 12 month defects liability period may be the responsibility of the local authority.