The New Zealand Treasury has revised its estimate of the total capital cost of the Christchurch rebuild to $NZ40 billion ($33.2 billion), up from $NZ30 billion ($24.9 billion) last December.

“This includes capital costs incurred by entities, such as commercial entities, as well as the [Government],” Prime Minister John Key told a National Party conference.

The estimated net fiscal cost of the earthquakes to the Government has increased to $NZ15 billion ($12.4 billion), from $NZ13 billion ($10.8 billion) in the half-year fiscal update last December.

“The estimate increases are due in many cases to more precise information becoming available about what the actual costs are across a range of areas, from housing and social investment to infrastructure and commercial development,” Mr Key said.

“These estimates will continue to be updated from time to time.”

The Government will fund social assets and core public facilities and services, although the rebuild will be built largely by private sector capital, he said.

Insurance Council of New Zealand CEO Tim Grafton says the Government’s estimate includes around $7-8 billion ($5.8-6.6 billion) in non-insured costs, including capital works, infrastructure and hospitals.

“We understand the figures for total insurance coverage are coming in at around $NZ32.5 billion [$27 billion],” he told insuranceNEWS.com.au.

The component paid by the Government has increased to $NZ15 billion.

“So the balance there… is about $NZ17 billion or so [$14.1 billion],” he said. “There’s no change from our estimates for private insurance.”

Although he is conscious of the risk that a surge in demand could inflate costs, Mr Grafton says this is not currently impacting on estimates.

Meanwhile, the country’s Serious Fraud Office (SFO) has closed an investigation into the rebuild.

The investigation focused on “scopes of work”, which provide insurers with estimates of likely repair or rebuild costs prior to settling claims.

Concerns were raised that these estimates were being inflated and resulting in more lucrative repair contracts once claims were accepted.

The SFO says no evidence was identified to support the suspicion.

But the office says private sector and law enforcement agencies should work collaboratively to prevent losses.