Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Fiordland monorail project declined

Fiordland monorail project declined

By Pattrick Smellie

May. 29 (BusinessDesk) - Conservation Minister Nick Smith has knocked back controversial plans to build a monorail through native forest as part of a tourism initiative that would have opened up a new route between Queenstown and Lake Te Anau, but which independent economic analysis suggested had "little prospect that the business idea could translate into a viable business."

"This proposal does not stand up either economically or environmentally," said Smith, announcing a decision he had been mulling since before Christmas.

An independent tourism and financial analysis by economic consultant Ian Dickson concluded it was not viable, there would have been significant impacts on the area's flora, fauna and natural heritage, and the route was "not sufficiently defined to properly assess the impacts."

While almost all the project was outside the Fiordland National Park, it fell within the vast area of the West Coast defined by UNESCO World Heritage listing.

The $210 million-plus development, advanced by millionaire Wanaka businessman and property developer Bob Robertson's vehicle, Riverstone Holdings, had attracted fierce local opposition, especially from Te Anau township tourism businesses, which feared the impact of a hotel he proposed to build on the road between Te Anau and Milford Sound, where the monorail would have terminated.

“This monorail had more merit than the Milford Tunnel proposal and has been a more difficult decision to make," said Smith, who last year turned down a competing proposal to dig a tunnel under the Southern Alps near the top of Lake Wakatipu to connect with the existing road to Milford Sound.

"I appreciate my decision will come as a major disappointment to Riverstone Holdings."

The company had spent years and several million dollars consulting with the Department of Conservation on a route through the Snowdon Forest Park, an area with a lower environmental protection status than a national park, to establish a viable six metre wide corridor for the proposed 43.8 kilometres of monorail track.

Among Smith's major concerns was the fate of the monorail infrastructure, in the event that the project failed commercially and was abandoned.

"The monorail infrastructure might well become a 'white elephant' taking up space in the forest to no useful purpose," says Smith in a letter to Robertson declining the proposal, also released today. "I am concerned the that the business might fail either during construction or thereafter."

While a bond might have been posted to cover the cost of the monorail's removal, it was likely to be as high as $275 million and so large that "it is unlikely that any bank stand surety for it", while the funds would not be able to replace vegetation and species displaced by the development, even if the rail was removed.

Dickson's estimates of the enterprise value of the proposal went as low as negative value of $441 million, compared with Riverstone's estimate of a positive value of $118 million. The proposal used five year old costings, unsupported market research, and optimistic views about demand for the journey, which meant the business plan "cannot be relied on," Dickson concluded.

Smith said he remained open to proposals for alternative access options in Fiordland.

"The strategic issue of facilitating better transport options between Queenstown and Milford remains. The door is still open but proposals will need to be both environmentally sustainable and economically viable."

Smith's letter to Robertson also makes clear he accepted the project could have fitted the "public enjoyment" purpose for which the land is held, since new visitors to the Snowdon Forest area would have gained enjoyment, despite a lower quality of enjoyment among existing users, and that tourism ventures inside World Heritage areas are not necessarily ruled out.

"I need to be confident that the particular scale and character of those adverse effects is compatible with heritage obligations and that steps taken to protect heritage values will be sufficient."


(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Fairfax Moves To Create Modern Newsroom

Fairfax Media New Zealand continues its newsroom transformation this week, with a proposal to further organise its editorial operations into focused, local teams and specialist national topic areas. More>>

ALSO:

Dairy: Fonterra Forecast For 2015/16 Season

Fonterra Co-operative Group Limited has today reduced its forecast Farmgate Milk Price for the 2014/15 season to $4.40 per kgMS. Along with its previously announced forecast dividend range of 20-30 cents per share, the change amounts to a forecast ... More>>

ALSO:

BusinessDesk: SkyCity Lifts Minimum Convention Centre Investment To $430M

SkyCity Entertainment Group, the casino operator, has lifted the minimum it will invest in the Auckland International Convention Centre to $430 million and said total costs including land may be $450 million to $470 million. More>>

Statistics: Drop In Dairy Prices Leads Fall In Exports

Total goods exports fell $240 million (5.5 percent) to $4.2 billion in April 2015 compared with April 2014, Statistics New Zealand said today. More>>

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>


BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>

BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news