Costs, cancellations among difficulties ahead

Dougal McGowan
Dougal McGowan.
Otago Chamber of Commerce chief executive Dougal McGowan is warning that tourism operators and businesses in the region are likely to face difficulties in the wake of the Kaikoura earthquake.

Mr McGowan was in Cromwell yesterday talking to members about their immediate problems after the 7.8 magnitude earthquake on Monday morning.

One of his tourism members had received seven cancellations on the first day of the quake, accounting for between $7000 and $8000 of business.

A tourist operator on  Otago Peninsula had been asked by tourism companies  if he was still operating, despite the peninsula being a long way from the quakes, he said.

Free and independent travellers might be put off from arriving in New Zealand, particularly if they looked at websites warning about conditions north of Christchurch.

The chamber had emailed its members asking for feedback on the problems being faced. Results were expected early next week.

However, Mr McGowan had his own warnings to issue.

Transport costs were expected to rise between 7.5% and 10.5% because of the closure of State Highway 1 north and south of Kaikoura. The loss of the rail link between Picton and Christchurch would add significantly to the cost of getting goods south.

The rising costs of transport would eventually flow through to the consumer, he said. It was unlikely transport companies, retailers or other companies could absorb them all. It was unclear how the busy holiday shopping season would be affected.

"We need to make sure we are clearly focused on the future. The road closures come at a busy time for both businesses and roading contractors."

The unknown was how many of the roading contractors would be diverted to  areas hit by the quake. There were only so many diggers and workers to go around and those areas would be the priority,  he said. Mr McGowan was concerned about road safety for truck drivers carrying goods, particularly on back roads not  designed for heavy truck and trailer units.

NZTA reported yesterday crews were continuing to work urgently on the  road between Culverden and Kaikoura, clearing slips and assessing the road and structures for damage.The road was under the control of Civil Defence Canterbury.

Transport agency highways manager Neil Walker said the road was  being used only to deliver supplies to Kaikoura.

The alternative state highway route from Picton to Christchurch, via Murchison and the Lewis Pass, had been open since late on Monday. It would probably be the main state highway route from Christchurch to Picton for several months, given the amount of work required to clear the large slips on SH1.

With the closure of SH1, the Lewis Pass route would be carrying higher volumes of traffic and people were urged to allow extra time for their journeys, Mr Walker said. Average journey times of seven and a-half hours could be expected between Christchurch and Picton on the Lewis Pass route.

A truck driver spoken to by the Otago Daily Times said it would take him about nine hours to drive between Christchurch and Picton on the same route.

Mr McGowan also questioned how prepared  businesses were for another earthquake after the major quakes in Christchurch. His initial impressions were they had not prepared well and he hoped the quakes this week would spark them into action.

 

At a glance

• Transport costs will rise by up to 10.5%

• Consumers will feel brunt of price rises

• Tourism operators already experiencing cancellations

Road safety will become a major problem

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