Wellington Scoop

Mayors agree: “compelling case” to pay $150m for longer runway

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The Wellington region Mayoral Forum has given a significant boost to planning for a 350-metre extension to Wellington Airport’s runway.

The Forum’s Chair, Upper Hutt City Mayor Wayne Guppy, says the proposed extension would unlock the growth potential of central New Zealand through greater air connectivity.

He says the business case for the extension is compelling – with over 700 people per day each way flying long-haul from Wellington’s market catchment, a number that continues to grow.

At its meeting yesterday the Forum yesterday agreed to support in principle a proposal that the region’s councils contribute to the estimated $300 million cost of the extension to the south of the existing runway.

Under the proposal, the region’s nine councils would fund around $150 million of the project cost.

Wellington City Council has included $90 million in its draft 10-year Plan for the project, therefore other councils in the region would have to contribute around $60 million. Wellington City’s share of the funding represents 60% of the total.

According to the discussion paper, the cost to the councils of funding the remaining $60 million equates to an average rate increase across the region of around 1.3% with expected direct and indirect returns on the investment being between $947 million and $1.7 billion as outlined in a strong economic case.

The Forum was updated on progress on the extension proposal – this included confirmation that after public consultation by the airport in the next two or three months, a resource consent application is to be lodged with the Environmental Protection Agency with a decision expected in 2016.

Mayor Guppy says resource consent would provide the certainty required that the extension project is real and can be done. “It will detail the proposed method of extending into Cook Strait and also address any environmental impacts.”

He adds the Forum’s support-in-principle – while not committing any council to agree funding – is an important step forward. “We do need to collectively give our backing and start the process now of getting more certainty on the component parts of the proposal, in particular the regional funding.”

The Forum’s support demonstrates the backing of the region and will help with the consenting process, securing an airline partner and obtaining support for the remaining funding, says Mayor Guppy.

Other details from the discussion paper discussed yesterday:

Economic benefits

There is a strong economic case for the runway extension both from a regional and national perspective. The consulting firm EY estimates the present value of the direct and indirect economic benefits to the Wellington region to be between $974 million and $1.7 billion. On a national basis the direct and indirect benefits are estimated at between $1.78 billion and $4.37 billion. The estimates are based on a period of 40 years up to 2060.

The benefits largely arise from:

· Additional international tourism

· Increase in international students

· Business productivity benefits

· Freight

· Aviation services.

Existing demand

The level of existing demand for long haul international services to/from Wellington is already sufficient to support daily long haul services. Already there are over 700 long-haul passengers per day each way flying long haul from Wellington. The number of passengers required to support a daily long-haul flight is 220 per day each way.

InterVISTAS, a recognised aviation industry consultancy, has assessed the potential long-haul routes and confirmed that commercially viable routes exist for airlines to operate long-haul direct flights between Wellington and Asia daily and services to North America operating initially three to four times a week.

The runway extension should not be viewed solely as a transport project. It is one element of a broader and linked regional growth and a catalyst package. This package includes:

· growth for technology, film, tertiary, tourism and logistics, investment in new events and facilities including a film museum, a museum of conflict, the ocean exploration centre, a convention centre, an indoor arena, and an enhanced New Zealand Festival.

· A comprehensive highway investment programme including Transmission Gully, Kapiti Expressway, Petone to Grenada, Terrace Tunnel, Basin Reserve and the Mount Victoria Tunnel.

· The Wairarapa Water Use Project.

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