Treasury and Resources
Ministerial/Treasurer’s Decision Report
Extreme storm damage to sea defences – ex-gratia payment of an uninsured event
- Purpose of Report
The purpose of this report is to authorise the interim Treasurer of the States to withdraw from the Insurance Fund the sum of £503,546 and make an ex-gratia payment to reimburse the Department of Transport and Technical Services (TTS) in respect of costs incurred as a result of extreme storm damage to sea defences during the first quarter 2014.
- Background
The period January – March 2014 saw three storms of high intensity, which resulted in a significant amount of damage to coastal defences and installations. Although no catastrophic failures occurred, after each storm, TTS Civil Works surveyed the island’s sea defences and identified that the damage caused required urgent remedial works to be undertaken in order to restore the integrity of the costal defences affected.
These extraordinary remedial works resulted in significant changes to the planned maintenance and capital programme of TTS for the year 2014 as the additional works identified were not high on the risk register and not scheduled for maintenance anytime within the next few years.
- Main Content / Subject matter
The total cost of repairing the storm damage was in excess of £1,000,000, of which around £500,000 has already been met by changes to the 2014 coastal protection programme, as well as re-prioritising planned maintenance work.
Additional costs in the sum of £503,546, exclusively relating to external civil engineering works, make up the balance of expenditure incurred. These external costs were specifically identified in respect of two of the larger pieces of remedial work required as follows:
- Le Bourg – remedial works to seawall……………… £438,910
- St Aubin’s - damage to slipway ……………………... £64,636
This extreme storm damage event was beyond the normal weather patterns anticipated and so was also beyond any reasonable budgetary expectation to manage costs within departmental revenue and capital budgets already set.
Also the island’s coastal sea defences are not covered by the current States of Jersey insurance programme, as insurers view such events as inevitable with the passage of time, and the States of Jersey would therefore incur exorbitant annual premiums which could not be justified under the current programme.
Therefore it was deemed that this uninsured event would require funding assistance from the Insurance Fund to meet extraordinary costs which could not be absorbed within existing departmental budgets, on the understanding that such action would also mitigate the risk of a similar event reoccurring in the near future.
- Recommendation
Due to the extreme storm weather experienced early in year 2014, it was recommended that the Minister for Treasury and Resources authorise the interim Treasurer of the States, without the intention of creating a precedent, to release funding in the sum of £503,546 from the Insurance Fund to TTS in order to meet the costs of said external civil engineering works.
- Reason for Decision
The Minister for Treasury and Resources authorises the Interim Treasurer of the States to make available from the Insurance Fund a maximum of £503,546 to reimburse costs incurred by TTS in relation to extreme storm damage to sea defences.
- Resource Implications
The Insurance Fund will make available a maximum of £503,546 to TTS in respect of extraordinary costs resulting from extreme storm damage to sea defences.
Report author : Senior Management Insurance Accountant | Document date : 14/01/2015 |
Quality Assurance / Review : Head of Treasury and Investment Management | File name and path: \\ois.gov.soj\sojdata\TRY\Treasury\Sections\Corporate Finance\Ministerial Decisions\DSs, WRs and SDs\2014-0152 - Extreme storm damage to sea defences - Ex-gratia payment\WR - Funding for storm damage to sea defences.doc |
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