Kingscote Airport Business Case Appendices - Kangaroo Island ...

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Kangaroo Island Futures Authority Draft Economic Impact of Agriculture and Tourism7. PATHWAYS TO GROWTH7.1 TourismA number of milestone developments were identified during the desk top study of policyalignment and subsequently supported by consultation with key stakeholders (Appendix 5).These included:1. Upgrade of Kingscote Airport2. Development of tourism experiences and accommodation3. Upgrade to utilities such as power and water supply4. Maintenance and development of road and trail infrastructure5. Development of export infrastructure such as bulk handling facilities6. Development of value adding infrastructure such as processing of agricultureproductsEssentially the growth potential in the tourism and agricultural sectors was seen to span theshort, middle and longer terms. Short-term growth at trend and higher was seen to be possibleutilising spare infrastructure and service capacity in the economy. However, to extend thisgrowth beyond the short-term, significant investment was required in milestonedevelopments.A feature of this development was likely to be a ‘leaking’ of benefits of this direct investmentfrom the Kangaroo Island economy to the broader regional economy. This was a product of thenarrow economy being unable to support major construction and the need for products andservices outside the scope of the existing industry profile on the Island. Therefore a measure ofthe direct investment in conventional terms (i.e. impact on GRP and jobs) was likely to berelatively small. The real benefits to the Kangaroo Island economy however should be seen asthe cumulative effect of the direct investment in the milestone development plus the benefitsthat accrue from the growth in key industry sectors such as tourism and agriculture. In otherwords, it is unlikely that growth in these sectors will occur at significant levels beyond theshort-term without a timely investment in milestone development.The example of investment in the Kingscote Airport upgrade is provided below. A similartreatment could be applied to the other milestone investments listed above. Some of theseinvestments are contingent on one another. For example, significant barriers to growth wouldremain if access to Kangaroo Island was improved at peak times without a facilitating upgradeto the power and water supply.7.1.1 Kingscote Airport upgradeTonkin Consulting prepared a report on the engineering investigations that were undertakento estimate the infrastructure requirements and associated capital costs to upgrade theKingscote Airport for four development scenarios (Tonkin Consulting 2012). The capital costsand on-going operating and maintenance costs for the upgrade options were utilised in thise c o n s e a r c hPage| 25
Kangaroo Island Futures Authority Draft Economic Impact of Agriculture and Tourismreport to estimate the economic impact that will occur to the local economy of KangarooIsland as a result of the expenditure. The four scenarios that are to be considered include:1. Maintain Kingscote Airport on an as-is basis without any deterioration in runway orpavement grade.2. Upgrade Kingscote Airport to accommodate Q400 aircraft operating sectors (at fullpassenger and cargo payload) as far as Melbourne3. Upgrade Kingscote Airport to accommodate regional jet services (F100) operatingsectors as far as Perth4. Upgrade Kingscote Airport to accommodate single-aisle mainline jet services(737/A320) to sectors as far as Perth7.1.1.1 Construction PhaseThe Kingscote Airport upgrade project will involve a total capital investment ranging between$9.8m for Scenario 2 to $37.1m for Scenario 4 (Table 7.1). There will be no capital investmentunder Scenario 1 as this is a business as usual scenario. The economic impact of theconstruction of the airport upgrade options will be determined by the extent of local labourand raw materials, the level of expenditures associated with the specialised contractors andequipment that will occur off Kangaroo Island.It was assumed that Scenarios 2 to 4 were of significant enough size to warrant a major civilcontractor from the main land. Therefore, the majority of the wages would not be retained onthe Island (Tonkin Consulting 2012) although it is likely they would be retained within theState.The direct expenditures that would occur on the Island are outlined in Table 7.1 and consistprincipally of the supply of sand material, pavement material and contractor employeeaccommodation and meals. Clearly, these expenditures comprise only a small proportion oftotal expenditure, ranging from just 5 per cent for Scenario 2 up to 17 per cent for Scenario 4.Table 7.1Kingscote Airport upgrade construction expenditure aExpenditure Categories Scenario 2 Scenario 3 Scenario 4Preliminaries $199,000 $199,000 $341,500Site Preparation and Earthworks $0 $22,822 $0Stormwater $0 $0 $0Pavement $211,562 $1,900,901 $5,663,957Lighting $0 $0 $0Building $135,600 $163,350 $377,200Design Fees $0 $0 $0Total Expenditure on Kangaroo Island b $546,162 $2,286,073 $6,382,657Mainland Expenditure $7,392,166 $11,016,612 $23,876,610Contingencies, GST & Levies $1,909,912 $3,386,632 $6,865,460Total Cost of Construction $9,848,241 $16,689,317 $37,124,727abScenario 1 is not shown as there are no construction costs associated with this scenario.Excludes contingencies, taxes and levies.Source: Tonkin Consulting (2012)e c o n s e a r c hPage| 26
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PRELIMINARY ASSESSMENTKangaroo Isla
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Kangaroo Island Airport Upgrade Bus
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Document History and StatusRev Desc
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6 Terminal Building 166.1 Descripti
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1 Introduction1.1 Scope of ReportTh
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3 Future Development Scenarios3.1 S
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4 Site Investigations4.1 OutlineA s
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Coober PedyKingscoteAccordingly, a
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For aircraft landing to the north a
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Table 5-1New Pavement ThicknessesPa
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In this Study, allowance has been m
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An additional 20% of the gross area
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7 Landside Facilities7.1 Car Parkin
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This situation will require monitor
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8 Capital Costs Estimates8.1 Introd
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Table 8-2Pavement Element Compariso
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8.4.3 Security Screening CostsIn ad
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Kangaroo Island Futures Authority D
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