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Feasibility Study Table of Contents Public Domain 1 St Helena Government, Department for International Development St Helena Access Feasibility Study Final Report January 2005 Atkins Management Consultants Woodcote Grove Ashley Road Epsom Surrey KT18 5BW UK Tel: +44 (0)1372 726140 Fax: +44 (0)1372 740055 DISCLAIMER This Report was produced by Atkins Management Consultants (“the Consultant”) solely for use by the Department for International Development, DFID, and the St Helena Government, SHG (collectively, “the Client”) for the specific purpose of determining the most economic form of access to the island of St Helena. Permission to disclose this report to third parties, should DFID/SHG wish to do so, has been granted on the specific understanding that: · This report has been prepared on an agreed basis to meet the specific purposes of DFID/SHG and not for use by any third party. · This report is not intended by the Consultant to form the basis of any decision by any third party to do or omit to do anything. · Third parties are not entitled to rely upon this report or the Consultant’s skill and advice generally, but should carry their own investigations and obtain independent professional advice on all matters covered (or which ought to have been covered) by this report. · This report is disclosed without responsibility on the part of the Consultant and no representation, warranty, promise or undertaking, express or implied, is or will be made or given in relation to the truth, accuracy or completeness of the report. No responsibility, liability, duty of care whatsoever (other than for fraudulent misrepresentation) is or will be accepted by the Consultant or any of our staff, officers, employees, affiliates, agents or advisers in relation thereto. The Consultant has relied upon information given by representatives of public and private organisations including Governmental and other authorities without detailed verification. The Consultant has, on his best effort basis and to the best of his knowledge, assembled, analysed, interpreted and presented, according to the Projects’ Terms of Reference, all pertinent information, facts and other data available from DFID/SHG and other relevant sources. CONTENTS 1 Executive Summary 1 Preface 1 Key Findings 1 The Investment Summary 2 Principal Conclusions and Recommendations of the Study 7 Additional Aspects of the Feasibility Study 9 2 Introduction 17 The Setting 17 Improving Access to St Helena 17 Structure of this Document 18 3 The Current Situation 22 Background to the Feasibility Study 22 Current Economic Position 23 Demographic Trends 24 Constraints on Development 29 Referendum on Air Access 2002 31 4 Key Challenges facing St Helena 32 Transforming the Economy 32 Promoting Economic Development 32 Reversing Population Decline 33 Reducing Budgetary Support 34 Price Impacts 35 Preconditions 37 Potential for improved access and tourism development to address these challenges 39 Implications of maintaining the status quo 39 5 Purpose and conduct of the Feasibility Study 40 Principal Aim 40 Principal steps by which these objectives are satisfied 41 Development of the Access options 45 6 Demands assessment and implications for demography 49 Introduction 49 Assessment of Tourism development patterns on proxy islands 49 The Tourism market 53 Tourist demand projections 72 Comparison of the demand estimates derived by other sources 81 Demand for travel by Saints 83 Potential for investment in Tourism 84 Demographic Assessment 88 Methodology for combining demand inputs 98 7 Technical considerations and cost estimates 100 Instrument Approaches and Runway Alignment 100 Open Skies Policy 101 Medium Runway – Description 101 Long Runway – Description 106 Concept 106 One-Way Runway Concept 111 Medium Runway Sub-Option: Compromise solution of operating B737NG And Airbus aircraft from a 1400m Landing / 1657m take-off Runway 111 Market sources for the provision of the Air Service 114 Construction and Design 116 Flight Testing 117 Aerodrome Cost Estimates 117 Provision of Sea Cargo Under Air Access 121 Sea Access – RMS Replacement - description 122 Summary 124 8 Contextual Issues 126 Introduction 126 Environmental Issues 126 Social Issues 130 Actions to Maximise Social Benefits 152 Institutional and Governance Issues 155 Immigration and Work Permits 159 Institutional Issues – Landholding 162 Institutional Issues – Land use Planning 165 Institutional Issues – Tourism Function 168 Institutional Issues – St Helena Development Authority (SHDA) 172 Institutional Issues – Vocational Training 176 Institutional Issues – Environmental Management 178 Institutional Issues – Contract Management 180 Regulation 181 Legal Drafting Capability 181 Operational Staff 181 The Police Force 183 Institutional Costs Under Air Access 185 RMS Replacement – Institutional Costs 189 Summary of Institutional Costs 190 Legal and Constitutional Issues 191 Opportunities for Private Sector involvement / support 203 9 Economic and Financial Analysis 205 Introduction 205 Development of the Model 205 Fiscal Assumptions 206 Supply Side Issues 208 Ticket Prices 210 Use of the Model 210 Sensitivity Analyses 213 Scenario Modelling 214 Public Finance Options and Impacts 215 General methodology statement on procurement approaches and value for money 216 Overall Approach to Option Appraisal 218 10 Comparison of Options 223 Introduction 223 Results of Financial / Economic Modelling 224 Sensitivity Analyses and Scenario Modelling 250 Analysis of Sub Options 258 Summarised advantages and disadvantages of the options 267 Overall Value for Money 269 11 Risk Assessment 270 The role of formal non-deterministic risk modelling 270 Application of the Monte Carlo Simulation Approach 280 Results of Risk Modelling 283 Risk Outputs Long Runway Option 288 12 Procurement Strategy for Preferred Option 294 RMS Replacement 294 Long Runway Option – Project Scope and Services 294 Aerodrome Design and Construction 294 Air Services 297 Possible Procurement Options – Aerodrome 298 Quantitative Analysis and Procurement Options 301 Cost of Procurement Options – Summary of Cost and Time Implications 302 Review of the Procurement Routes 306 Design Build Operate Contract 306 General Conclusion on Procurement Route 309 Cash flows – Early Years, Long Runway Aerodrome, DBOT Procurement 310 13 Conclusions and Recommendations 312 Detailed Conclusions 312 Section 3 – The Current Situation 312 Section 4 – Key Challenges 313 Section 6 – Demand Assessment and Implications for Demography 314 Section 7 – Technical Considerations and Cost Estimates 317 Section 8 – Contextual Issues 329 Sections 9, 10, 11 – Financial / Economic and Risk Modelling 320 Section 12 - Procurement 322 Detailed Recommendations 323 14 Implementation Plan 231 Appendices Volume 1 Appendix A: Terms of Reference for Feasibility Study Appendix B: Demographic Developments Appendix C: Assumptions – General Appendix D: Options Paper Appendix E: Proxy Islands Study Appendix F: Survey of St Helenians Appendix G: Survey of St Helenians (Aspirations) Appendices Volume 2 Appendix H: Specification for gathering Meteorological Data Appendix I: (Redacted – Commercial in Confidence) Appendix J: Fuel Storage Requirements Appendix K: Ticket Price Estimates Appendix L: Air Cargo Supply Arrangements Appendix M: Technical Feasibility – Air Access Appendix N: Reduction of Long Runway Sub Option Appendix O: Long Runway Appendix P: 1400m LDA / 1650m TORA Runway Appendix Q: Air Traffic Systems Specification Appendix R: Provision of Sea Cargo under Air Access Appendix S: Environmental Impact Report Appendix T: TOR for ESIA Appendix U: Island visit and other meetings Appendix V: Comments on SHG LDC (Environmental) Appendix W: Description of Economic Model Appendix X: (Redacted – Commercial in Confidence) Appendix Y: Procurement Approach RMS Replacement Appendix Z: (Redacted – Commercial in Confidence) Appendix AA: Review of Procurement Routes Appendix AB: DFID / SHG / Contactor Funding Structure Appendix AC: (Redacted – Commercial in Confidence) Appendix AD: Review of Telecomms Infrastructure Appendix AE: Portfolio Management of Projects Appendix AF: Commentary on Implementation Plan St Helena Access Feasibility Study Final Report ABBREVIATIONS AFTN - Aeronautical Fixed Telecommunications Network ASDA - Accelerate Stop Distance Available ASSI - Air Safety Support International (Regulator, Overseas Territories) DFID - Department for International Development DfT - Department for Transport (UK) DoD - Department of Defence of US Government EA - Environmental Assessment EIA - Environmental Impact Assessment EMP - Environmental Management Plan ESIA - Environmental & Social Impact Assessment ETOPS - Extended Twin-Engine Operations FIT - Fully Independent Travellers HMG - Her Majesty’s Government gals - imperial gallons k - thousands LDA - Landing Distance Available LLPD - Legal, Lands and Planning Department of SHG m - metres M - millions MOD - Ministry of Defence (UK) NAVAIDS - Ground based navigation aids PBP - Prosperous Bay Plain PFC - porous friction course on runways PWSD - Public Works & Services Department of SHG RESA - Runway End Safety Area RFFS - Rescue & Fire Fighting Service RMS - Royal Mail Ship “St Helena” Saints - St Helenians SHG - St Helena Government STPR - Social Time Preference Rate TFR - Total Fertility Rate TODA - Take-off Distance available ToR - Terms of Reference TORA - Take-off Run Available St Helena Access Feasibility Study Final Report 1 EXECUTIVE SUMMARY PREFACE 1.1 St Helena, an Overseas Territory of the United Kingdom, lies in the tropics in the South Atlantic
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