MercoPress. South Atlantic News Agency

Cost of rebuilding Chile estimated in 30 billion US dollars

The aftermath of one of the worst quakes to pound Chile

Chile’s plans to repair the damaged caused by last Saturday’s earthquake are likely to cost the nation an estimated 30 billion US dollars and three to four years work, according to EQECAT, a firm that evaluates catastrophe risk for insurers.

In the wake of the devastating quake that hit Chile, the country’s priority will be in investing in the repair and rebuilding of homes that were irreparably damaged or reduced to rubble.

Also the new government of President-elect Sebastian Piñera, which is due to take office March 11 is faced with the responsibility of repairing toppled bridges, overpasses and cracked roads that have made it difficult to reach south central cities such as Talca, Chillán and Concepción by vehicle.

Research group Capital Economics estimates that despite the catastrophe, Chile’s economy is likely to grow 5% this year. Chile already has one of the fastest growing and best run economies in Latin America.

Curtis Mewbourne, of investment group Pimco told the BBC that “the strong state of government finances, mostly reserves generated from the Chilean copper industry will aid these efforts.”

Chile has experienced various natural disasters in recent years and Bachelet’s government has funded similar repairing and re-housing projects, although not without criticism.

A clean-up and rebuilding project occurred in 2007 in the northern Chile town of Tocopilla, two weeks after an earthquake registering 7.7 on the Richter Scale struck the region. The quake damaged 43% of the community's homes, which were later deemed uninhabitable. Nearly 3,000 homes were damaged and subsequently demolished.

In 2008, the government chose Santa Barbara as the new site for the town of Chaitén (Region X), which was devastated by a nearby volcano of the same name. The estimated price tag for the relocation effort was approximately 120 million USD, most of which was spent on new housing. The government also granted a 962 USD per month subsidy for displaced Chaiten families, who were moved mostly to Llanquihue, Puerto Montt and Chiloe.

By Paul Herber - Santiago Times