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Socioeconomic Consequences

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Socioeconomic Consequences Socioeconomic Consequences Nature Road between Sisimiut and Kangerlussuaq 2 CONTENTS 1 SUMMARY 3 2 INTRODUCTION 4 3 BACKGROUND 4 3. Danish Arctic Contractor’s and Geoplan’s Projects in the 1960s 5 3.2 Impact Assesment of Sisimiut Municipality 5 3.3 Joint Report between Sisimiut Municipality and Greenland Home Rule . 5 3.4 Rambøll’s environmental assessment 6 3.5 Sisimiut Municipality's business plan for A / S Umimmak Traffic 7 3.6 Business potentials from the road between Sisimiut and Kangerlussuaq 8 3. 7 ARTEK's Route Suggestions 8 3.8 Transport Commission's report 9 3.9 New Ideas on the road. 9 4. SOCIOECONOMIC COSTS OF THE NATURE ROAD 11 4.1 Construction Costs 11 4.2 Operating Costs 13 5 SOCIOECONOMIC BENEFIT FROM THE NATURE ROAD 14 5.1 Use by Locals 14 5.2 Development of Tourism 15 5.3 Living Resources 17 5.4 Research 18 5.5 Other Benefits 21 6. SOCIOECONOMIC RESULTS 21 3 1. SUMMARY In connection with the road project between Sisimiut and Kangerlussuaq, a number of feasibility studies have been conducted over the years and various reports have been prepared. There are primarily different roadmaps / routes and related economies, as well as the economic opportunities as a result of the road and to finance the road. A new northern road route through the Nerumaq Valley and north of Tasersuaq appears technically easier and environmentally more attractive than the previously explored routes. The technical challenges with Itinneq are due to the difficult Itinneq area with difficult ground conditions in the valley, steep mountainsides from the valley and lack of road materials on the plateaus on both sides. Environmentally, the Itinneq valley is home to a rich wildlife. The northern route also passes the ancient summer camp Aasivissuit, which is the center of the UNESCO World Heritage Site in Qeqqata Municipality. The northern route has been transposed and surveyed in 2015-2016, where an appropriate location of the route has been found, avoiding significant blasting and stealing passages. Against this background it is estimated that a nature road without a roadbed as in traditional road construction costs 15 million. dkk and has annual operating costs of ½ million dkk. The nature road will be passable for much of the year in the east, while a shorter period of use in the western part may be assumed. A socioeconomic analysis has been prepared which shows that the expected socioeconomic income from the nature road exceeds construction and operating costs. The present value of the socio-economic income can be estimated as 50.4 million dkk from tourism, 13.9 million dkk from living resources, and 2.2 million. dkk from research. Costs / Benefits Constuction Operative costs Tourism living resources research Mio. dkk. -15,0 -6,8 50,4 13,9 2,2 The socio-economic analysis shows that the investment of 15 million.dkk is earned in 7 years, so with construction in 2017, the economy will go to zero (break-even) in 2024. It is the tourism sector that generates the positive result, since over 75% of the measurable gains are attributable to tourists. Tourists are divided into different segments at different seasons, so the positive outcome of the socio-economic analysis seems robust. 4 2 INTRODUCTION Investigations on the possibility of a road between Sisimiut and Kangerlussuaq have been made for approx. 50 years, but it is very remarkable that the plan of the very accessible and cheap route north of Tasersuaq has first been investigated in recent years. In previous times the ideas of building roads were due the vastness fjords etc. focussed on the immediate vicinity of towns like Sisimiut, Kangerlussuaq and others in Greenland. The central authorities - first in the form of the Greenland Ministry and then as the Greenland Home Rule Government - have, since the first thoughts of a road arose, rejected the plans and did not want to finance the road nor even to co-finance it. Meanwhile the transport between the two places has increased - in winter with dog sledges, snowmobiles, cross country skiers and fat bikers - in the summer with hikers on the famous Arctic Circle Trail. Motorized vehicles have also become more robust, stronger and economically viable for the population, hunters, tourist operators, etc., during this period. The Council of Qeqqata Municipality has therefore decided to set up a nature road on existing terrain, where Qeqqata Municipality’s budget allocates 15 million dkk to the nature road / ATV track between Sisimiut and Kangerlussuaq in the years 2016-17. In addition to that 6 million dkk have been allocated to a road between Sisimiut and Solbakken and 1 million dkk for an EIA 1 study. The EIA study is carried out by Rambøll Greenland, while the present report concerns the socio- economic consequences of the nature road. 3 BACKGROUND In the 1960s, the first analyzes of a road between Sisimiut and Kangerlussuaq were carried out when Danish Arctic Contractors prepared a preliminary project. A route with a 4 meter wide roadway from Kangerlussuaq south of Tasersuaq via Maliaq a little north of Sarfannguaq was 1 English: EIA = Environmental Impact Assessment - Danish: VVM = Vurdering af Virkninger på Miljøet. 5 estimated in 1969 to have the lowest annual transport costs. The plan was rejected by the Ministry of Greenland. In the 2000s plans were resumed by the then Sisimiut Municipality (now Qeqqata Municipality) and the Center for Arctic Technology (ARTEK). A route with a 6.5 meter wide roadbed of this route was estimated in 2003 to cost 250-300 million. The plan was rejected by Greenland's Home Rule Government. In the 2010s Qeqqata Kommunia launched plans for a nature road based on both a new route and new technological achievements with motorized vehicles. A 3 meter wide road on the route north of Tasersuaq and via the Nerumaq valley is estimated to cost 15 million. Funds are allocated in Qeqqata Municipality's budget in 2016-2017. 3.1 Danish Arctic Contractor’s og Geoplan’s project in the 1960s In 1964, Danish Arctic Contractors prepared a preliminary project for a road link between Søndre Strømfjord and Holsteinsborg, which was handed to the Ministry of Greenland. It is not known if it was presented to the Americans. In the following years, the ministry wrote, inter alia, that it was "a political question of allowing such an actual US activity outside of the defense areas" and "execution of the road to Holsteinborg would create a disgusting development in this city that was not intended" . Holsteinsborg’s Municipal Council recommended closer investigations, especially on the basis of tourism potential, but the Ministry completed the case. 3.2 Impact Assessment of Sisimiut Municipality In 2003, Sisimiut Municipality published an impact assessment that concluded that… • a road will be economically profitable for the Greenlandic community; • a road will have great benefits for all of Greenland; • a road will increase the flexibility, availability and regularity of Greenlandic traffic and reduce the price; • a road will be the missing link between the internal coastal and external air traffic in Greenland; • a road will allow more tourists to come cheap and flexible around Greenland; • a road will provide stores in Greenland with cheaper without airtransport; • a road will open up a business development in Sisimiut and Maniitsoq municipalities, especially with regard to fresh fish, minerals and hydropower, as well as clean ice and water; • a road will bind the town of Sisimiut and the locations of Kangerlussuaq and Sarfannguaq together; • a road will lead to less polluting transport than the existing transport structure; • a road was already economically profitable in the 1960s. 3.3 Joint Report between Sisimiut Municipality and Grønland Home Rule Sisimiut Municipality and Greenland's Home Rule Committee set up a joint steering committee and working group, investigating road projects based on the impact assessment. The report was completed in 2005 and concluded, among others: Sisimiut Municipality's impact assessment appears as a very reasonable outline and is considered a good and well-implemented product The cost-benefit part of the impact assessment also appears as a well-considered work: • The most important source of income of the project is the relocation of existing traffic from air to road / ship. A large part of the assumptions behind these estimates seem very likely and are a good starting point for further analysis. There are a lot of other consequences and assumptions that should be investigated further. • The present value of the project, based on the current traffic structure, is very positive. 6 • From a commercial perspective, a combination of an Atlantic airport in Kangerlussuaq, Sisimiut open-water port and a road link between Sisimiut and Kangerlussuaq will provide a better infrastructure basis for strengthening business development opportunities in Sisimiut as in other parts of West Greenland. • It seems crucial that the decision on the road project and any possible airport at Nuuk is linked. However, it is not possible, on the basis of the municipality's impact assessment, to present the full consequences for the road project, if an 1199-meter lane or Atlantic airport in Nuuk was established. However, it can be established that a roadmap between Sisimiut and Kangerlussuaq, in isolation, will reduce the socio-economic benefits of extending the landing lanes in Nuuk and Ilulissat - and vice versa. • Mittarfeqarfiit and Rambøll have arrived at estimated construction costs of 490 and 250 million respectively. The difference is thus 240 million. Thus, quite a considerable amount. Based on this, Greenland’s Home Rule members in the steering committee stated that "such essential uncertainties should be clarified at least before it is advisable to allocate additional funding for design", while Sisimiut Municipality representatives stated the "feasability of a road between Sisimiut and Kangerlussuaq".
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