Cape Town - Knysna's economy is yet to recover from the devastating fire that ravaged the town, causing R3billion in damages. This follows the release of a report
commissioned by short-term insurer Santam on the 2017 blaze that saw nine people killed, hundreds of homes destroyed and thousands of hectares of vegetation affected.
In analysing the cost of damage caused by the fire, the report found that of the R3bn in damage, insurance companies bore the brunt of the costs - with insurance claims standing at R2.2bn - with the timber industry coming in at second, followed by government departments.
“The bulk of the costs (72%) were sustained by the insurance industry, with the event costing insurers approximately R2.2bn in claims. The forestry industry was next, sustaining a little under R636million in timber losses. The remaining losses were incurred by government departments, with the Western Cape’s Department of Transport and Public Works, Department of Environmental Affairs and Development Planning and municipalities bearing the heaviest losses,” read the report.
“The costs incurred by provincial and municipal government amounted to just under R211m. The fires had a profound impact on Knysna’s residents and economy, with an estimated 2000 formal sector jobs lost and an unknown number of jobs affected within the informal sector.
“Over 900 houses were destroyed or
rendered uninhabitable; many believe that Knysna is still feeling the effects of the combined personal and business impact. People have less disposable income to spend on goods and services, and some restaurants and small business report a noticeable reduction in
customers,” the report reads.
The report also highlighted challenges facing Knysna residents in trying to rebuild both their lives and homes - from those who were uninsured or under-insured, to government departments which couldn’t claim for repairs because they had done emergency repairs shortly after the incident.
“Provincial and municipal departments submitting claims for emergency and recovery funding following a disaster must specify whether the damaged infrastructure has already been repaired, in which case it is usually excluded from allocations,” read the report.
Meanwhile, Knysna has yet to bounce back from the devastation of the fires. Knysna mayor Mark Willemse said the town’s economy was still struggling, with some people unable to rebuild their homes, in turn, affecting the municipality’s ability to generate funds from rates.
“We rely on income from our ratepayers, so if houses are destroyed and people are no longer living here because they cannot afford to rebuild, it is a loss of income to the municipality. We need to have an income to ensure that we have money to spend on fixing our infrastructure, because if you are able to invest in your infrastructure, you are able to create more jobs for people.”