Feb. 28 (Bloomberg) -- Chile stepped up efforts to find survivors of an earthquake registering 8.8 magnitude that struck before dawn yesterday, killing more than 700 people, severing the country’s main highway and damaging 1.5 million homes.

The Chilean Air Force began ferrying rescue workers, police and other security forces in hourly flights to the city of Concepcion, close to the epicenter of the quake. Special forces troops and police with sniffer dogs are among the rescue workers entering worst affected areas of southern Chile.

Authorities are setting up field hospitals and deploying additional rescue workers to the most affected areas, President Michelle Bachelet told reporters today. The army is sending 10,000 troops, Defense Minister Francisco Vidal said.

More than 50 aftershocks followed yesterday’s quake, which was stronger than the one in Haiti last month that may have killed 300,000. A temblor measuring 6.2 hit the Libertador O’Higgins region, 90 miles south of Santiago, at 6:25 a.m. New York time, the U.S. Geological Survey said on its Web site.

“It’s much worse than I thought it would be,” Public Works Minister Sergio Bitar told reporters yesterday. “It’s not something we can solve quickly. This will take several months.”

Bachelet held meetings with armed forces personnel, ministers and emergency agency officials in Santiago. President- elect Sebastian Pinera visited the city of Talca by helicopter, calling on private companies to assist the emergency efforts and reconstruction.

Yesterday’s quake was centered 200 miles (317 kilometers) southwest of Santiago near the main winemaking region and close to Concepcion, a metropolitan region of over 500,000 people. Highways and airports were shut by damage and some copper mines closed. The total economic damage may be as much as $30 billion, or about 15 percent of the South American country’s gross domestic product, according to estimates by disaster-scenario modeler Eqecat Inc.

‘State of Catastrophe’

Bachelet declared a “state of catastrophe.” She said in a televised address yesterday about 2 million people have been affected by the earthquake, which the USGS said is the world’s fifth strongest since 1900.

The 90-second temblor severed the Pan-American highway, the country’s main thoroughfare, at several points south of Santiago. Bridges collapsed and embankments have subsided, rendering long sections of asphalt impassable. Bypasses have been set up to reconnect roadways, Abumohor said today.

An estimated 1.5 million homes may have been damaged, a third of them severely, Housing Minister Patricia Poblete said.

“We are talking almost about a cataclysm,” Poblete said in remarks broadcast on TVN.

Santiago Palace Damaged

In Santiago, people slept in cars, their yards and outside apartment buildings, concerned that aftershocks would further damage their homes. The facade of the fine arts museum collapsed and Bitar said there was damage to part of the La Moneda presidential palace.

The worst problems are near the epicenter of the earthquake close to Parral, more than 300 kilometers from Santiago.

The tower of the pink church at Pelequen, a place of pilgrimage 130 kilometers south of Santiago, was gone and the roofs of several colonial-style houses had collapsed.

Pinera, who is to be sworn into office on March 11, vowed to reassign spending to finance reconstruction.

Television images showed collapsed buildings across Concepcion. Rescue workers with specially trained dogs worked through the night to rescue 100 people believed to be trapped inside a 14-story apartment building that toppled onto one side, following the cries of those trapped inside, TVN reported.

Water System Destroyed

Tanker trucks distributed drinking water to the city, whose water system was destroyed by the quake, Mayor Jacqueline Von Rysselberghe told TVN, as rescue workers drilled into the toppled building behind her. Food is running out in the city because it’s impossible for supplies to reach the city, she said. Riot police patrolled the streets in Concepcion, firing teargas on people looting a supermarket, TVN images showed.

“People are running out of food at home and that encourages looting,” the mayor said. “If we don’t solve that problem tonight will be very hard, the social tension will be very high.”

In towns closer to the epicenter, including Curico and Talca, more than 80 percent of buildings were flattened, CHV Television reported.

Offshore Epicenter

The temblor struck at 3:34 a.m. offshore from the province of Maule at a depth of 22 miles (35 kilometers), according to the USGS Web site. It carried a force 500 times stronger than the magnitude 7.0 earthquake that last month devastated Haiti, in terms of the energy released, according to the USGS.

“We literally bounced around the room,” Patricia Bustamante, 61, said from the emergency room at the Salvador hospital in Santiago where her daughter was being treated for multiple concussions. “I’ve been through the earthquakes of 1960, 1971 and 1985 and this one felt different. It was like a galloping horse.”

Stringent building codes and the most highly-engineered building inventory in Latin America helped mitigate damage, Boston-based Air Worldwide, a catastrophe modeling firm that estimates damages for insurers, said in a press release.

Power and phone connections were disrupted. Chilectra, the electric utility for the Chilean capital of Santiago, said electricity has been restored to 80 percent of the city’s homes and businesses.

At least four copper mines responsible for 16 percent of the country’s output halted operations after the quake struck. Chile is the world’s largest copper producer.

Mines to Reopen

Codelco’s El Teniente and Andina mine in central Chile will reopen “shortly” after inspectors failed to find major damage, Mining Minister Santiago Gonzalez said without providing a timetable for them to restart.

Most of Chile’s copper deposits and port facilities are located in the northern half of the country and had no reports of damage. These include Escondida, the world’s largest copper mine, operated by BHP Billiton Ltd. and in which Rio Tinto Group is a shareholder.

Secretary of State Hillary Clinton still plans to visit Chile during her previously planned five-country tour of Latin America this week, department spokeswoman Megan Mattson said in a telephone interview today.

“The secretary is still planning on stopping in Chile to show solidarity with the Chilean people,” Mattson said. “At this time, we have not received a formal request for aid.”

Finance Minister Andres Velasco said it was too early to estimate the economic cost of the quake. He said Chile’s policy of funneling windfall copper profits into a $14.7 billion rainy- day fiscal savings fund would help shoulder the cost of rebuilding.

“Chile has saved for a very long time in order to have the savings to be able to face situations like this,” he told reporters.