The method determines that land is not cost effective to remediate if the cost of remediation would be greater than the value of the land as set out in para 8.1 of the Cabinet Minute. While not the only criteria for deciding whether land is to be zoned Red or Green, the method does tackle the financial part which is the primary reason for the designations.
What follows is extracted from para 8.1 of the Cabinet Minute of the 15th of August. A copy can be downloaded here.
Determining the cost of remediation
This cost is determined by adding the first three items in the list, then subtracting the fourth.
Determining cost effectiveness
- Cost of land reinstatement to pre-September condition plus
- The betterment cost (i.e. perimeter treatment and/or additional raising of land) plus
- Infrastructure replacement (see note 1) minus
- Decommissioning costs (infrastructure decommissioning and greening)
- If the cost of the above exceeds the improvement in the value of the damaged land (see note 2), remediation is not cost effective.
- If the cost of the above is less than the improvement in the value of the damaged land, remediation may be cost effective.
Note 1: Includes the infrastructure within the Orange Zones required to service the sub-zone area of interest (and excludes the cost to repair infrastructure required to service surrounding Green Zones)
Note 2: Despite the recent earthquake events, properties are likely to have some land value left. We assume there is 10% of the land value remaining in the properties, as indicated by the Valuer General.