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Bay of Plenty Regional Airport Feasibility Study

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Bay of Plenty Regional Airport Feasibility Study FINAL DRAFT REPORT Bay of Plenty Regional Airport Feasibility Study COMMERCIAL-IN-CONFIDENCE Prepared for Environment Bay of Plenty Whakatane, New Zealand 30 July 2006 43187149 Project Manager: ………………………………….. URS Australia Pty Ltd Brian Carson Level 3, 116 Miller Street Principal – Airports & North Sydney, NSW 2060 Australia Infrastructure Tel: 61 2 8925 5500 Fax: 61 2 8925 5555 Project Director: ………………………………….. Ivo Favotto Principal- Finance & Economics Principal – Airports & Infrastructure Date: 30 July 2006 Reference: 43187149 Status: Draft J:\JOBS\43187149\6000 DELIVERABLES\EBOP AIRPORT FEASIBILITY FINAL.DOC\28-JUL-06 Contents Executive Summary ------------------------------------------------------------------------------------------ES-1 Background 1 Current Situation 1 Benefit – Cost Process 3 Traffic Forecasting & Facility Requirements 3 Site Identification 6 Concept Development & Costing 7 Real Estate Analysis 8 Airport & Airline Operations & Cost Analysis 9 Transport Planning Analysis 10 Financial Feasibility 11 Economic Benefit Cost Analysis 12 Risk Factors 13 Conclusions 13 1 Background---------------------------------------------------------------------------------------------------1 1.1 Introduction 1 1.2 Summary of Stage 1 RASS Outcomes 2 1.3 Objectives of the Stage 2 of the RASS 3 1.4 New Airport Development Process 3 1.5 Study Process 5 2 Current Situation--------------------------------------------------------------------------------------------7 2.1 Introduction - Current Situation 7 2.2 Geography & Political Structure 7 2.3 Population & Trends 9 2.4 Existing Airports System 10 2.4.1 Tauranga 11 2.4.2 Rotorua 12 2.4.3 Whakatane 13 2.5 Transport Task 13 3 Benefit Cost Process ------------------------------------------------------------------------------------ 15 3.1 Benefit-Cost Analysis 15 3.2 Benefit-Cost Analysis Process 15 3.3 Benefit Cost Workstreams 17 4 Traffic Forecasting & Facility Requirement Analysis ----------------------------------------- 22 4.1 Introduction – Traffic Forecasting 22 4.2 Traffic Growth Analysis 24 4.2.1 Historical Trend Analysis 24 4.2.2 Existing Airport Projections 29 4.2.3 Ratio Analysis/Benchmarking 32 4.2.4 Schedule Analysis 36 4.2.5 Econometric Analysis 37 4.3 Regional Airport Traffic Forecasts 42 4.4 Benefits Arising from Regional Airport Traffic Growth 45 J:\JOBS\43187149\6000 DELIVERABLES\EBOP AIRPORT FEASIBILITY FINAL.DOC\Error! Unknown switch argument. i Contents 4.4.1 Regional Economic Impact 45 4.4.2 Regional Economic Impact – Spend Rate Sensitivity 48 4.4.3 Economic Impact Summary Results 49 4.5 Facility Requirements Analysis 50 5 Site Identification ----------------------------------------------------------------------------------------- 51 5.1 Introduction - Site Identification 51 5.2 Site Identification Criteria 51 5.2.1 Physical Criteria 52 5.2.2 Contextual Criteria 54 5.2.3 Manageable Criteria 55 5.3 Application of Site identification Criteria 56 5.3.1 Location Relative to Population Catchments 56 5.4 Physical Criteria 60 5.5 Alternative Site 61 5.6 Contextual Criteria 66 5.7 Manageable Criteria 66 5.8 Summary – Site Identification 67 6 Concept Development & Costings ------------------------------------------------------------------ 68 6.1 Introduction Concept Development & Costing 68 6.2 Global, Operational & Infrastructure Assumptions 68 6.2.1 Global Assumptions 68 6.2.2 Operational Assumptions 69 6.2.3 Infrastructure Assumptions 70 6.3 Regional Airport Concept Capital Costing 75 6.4 Recurrent Capital Expenditure Estimates 78 6.4.1 Historical Cap-Ex profile of Existing Airports 78 6.4.2 Regional Airport Capital Expenditure Profile 79 7 Real Estate Analysis ------------------------------------------------------------------------------------- 80 7.1 Introduction - Real Estate Analysis 80 7.2 Methodology 80 7.3 Data Sources 81 7.4 Value of Existing Bay of Plenty Regional Airports Land 81 7.4.1 Rotorua 81 7.4.2 Tauranga 82 7.4.3 Whakatane 83 7.5 Value Estimates of Highest and Best Use - Existing Bay of Plenty Regional Airports 83 7.5.1 Rotorua 83 7.5.2 Tauranga 84 7.5.3 Whakatane 85 7.6 Estimates of the Value of Regional Airport Land Requirements 87 7.6.1 Regional Airport Land Requirement Value Estimation Methodology 87 7.6.2 Paengaroa 88 7.6.3 Pyes Pa 93 7.7 Real Estate Analysis – Summary Outcomes 99 J:\JOBS\43187149\6000 DELIVERABLES\EBOP AIRPORT FEASIBILITY FINAL.DOC\Error! Unknown switch argument. ii Contents 8 Airport & Airline Operations & Costs Analysis------------------------------------------------ 101 8.1 Introduction Airport & Airline Analysis 101 8.2 Airport & Airline Analysis Methodology and Approach 101 8.2.1 Airport Analysis Methodology and Approach 102 8.2.2 Airline Analysis Methodology and Approach 102 8.2.3 General Methodology and Approach 102 8.3 Airport Operational Revenue and Cost 102 8.3.1 Establishing Current Revenue & Operating Costs of Bay of Plenty Airports 103 8.3.2 Benchmarking Comparable Airports 103 8.4 Airline Analysis – Introduction 105 8.4.1 Regional Flight Schedule Review 105 8.4.2 Assumptions for Airline Revenues Estimates 107 8.4.3 Assumptions for Airline Costs Estimates 107 8.4.4 Airline Operational Costs Estimates 107 8.4.5 Airline Cost Summary Outcomes 108 8.5 Airport and Airline Outcomes - Summary 109 9 Transport Planning Analysis------------------------------------------------------------------------ 110 9.1 Introduction Land Transport Planning Analysis 110 9.2 Land Transport Analysis Costing Approach and Methodology 110 9.3 Land Transport Analysis Parameters 111 9.4 Transport Demand Projections 115 9.4.1 Impacts on Capital Expenditure 117 9.5 Costing Land Transport Movements Bay of Plenty 117 9.5.1 Vehicle Operating Costs 117 9.5.2 Travel Time Costs 117 9.5.3 Accident Costs 118 9.5.4 Vehicle Emissions 118 9.6 Land Transport Cost Summary 119 9.7 Non Airport User Effects 119 10 Financial Feasibility Analysis----------------------------------------------------------------------- 120 10.1 Introduction Financial Feasibility 120 10.2 Financial Feasibility Methodology and Approach 120 10.3 Feasibility Analysis Parameters 120 10.4 Financial Inputs Analysis 121 10.4.1 Capital Expenditure 121 10.4.2 Real Estate Costs 122 10.4.3 Profit and Loss Statement 124 10.5 Financial Feasibility Results 125 10.6 Financial Feasibility Sensitivity Testing 125 10.7 Financial Feasibility Conclusions 126 11 Benefit Cost Analysis --------------------------------------------------------------------------------- 129 11.1 Introduction Benefit Cost Analysis 129 11.2 BCA Key Parameters 129 11.3 Base Case and Options for Analysis 130 J:\JOBS\43187149\6000 DELIVERABLES\EBOP AIRPORT FEASIBILITY FINAL.DOC\Error! Unknown switch argument. iii Contents 11.4 Analysis Methodology 131 11.5 Results of the Benefit-Cost Analysis 133 11.5.1 Sensitivity Analysis 134 11.6 Benefit Cost Analysis Conclusions 142 12 Risk Factors ---------------------------------------------------------------------------------------------- 145 13 Conclusions ---------------------------------------------------------------------------------------------- 147 General 147 Financial Feasibility 149 Economic Benefit Cost Analysis 152 J:\JOBS\43187149\6000 DELIVERABLES\EBOP AIRPORT FEASIBILITY FINAL.DOC\Error! Unknown switch argument. iv List of Tables, Figures, Plates & Appendices Tables Table ES.1 - Annual Incremental Economic Impact Summary ($ millions) ..........................................ES-6 Table ES.2 - Current BOP Airport vs Proposed Sites Ongoing Capex Comparison .............................ES-7 Table ES.3 - Existing Airport Land Value .............................................................................................ES-8 Table ES.4 - Regional Airport Land Costs .............................................................................................ES-8 Table ES.5 - Rental Income Summary ...................................................................................................ES-9 Table ES.6 - Incremental Airport and Airline Cost Outcomes ...............................................................ES-9 Table ES.7 - Land Transport Costs ($’m) ............................................................................................ES-10 Table ES.8 - Financial Feasibility Results ...........................................................................................ES-11 Table ES.9 - Base Benefit Cost Analysis Results ................................................................................ES-11 Table 2.1 - Bay Of Plenty 2001 & 2005 Population By District ..................................................................9 Table 2.2 - Bay Of Plenty 2026 Forecast Population By Sub District .......................................................10 Table 2.3 - Bay Of Plenty Airport Traffic Statistics – 2005 .......................................................................11 Table 4.1 - Bay of Plenty Airport Traffic Growth – 1996 to 2005 ............................................................27 Table 4.2 - Bay of Plenty Airports Passenger Forecasts ............................................................................30 Table 4.3 - Benchmark Analysis – Forecast Growth Rates ........................................................................32 Table 4.4 - Ratio Analysis – Historical Traffic-to-Population Ratio .........................................................34 Table 4.5 - Ratio Analysis – Historical & Forecast Traffic-to-Population Ratio .......................................35 Table 4.6 - Ratio Analysis – BOP Regional
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