DoC to seek independent financial view on monorail economics

Friday 20th December 2013

Conservation Minister Nick Smith has ordered an independent financial review of the controversial Fiordland Experience monorail project, ahead of a final decision on whether to allow the project to proceed over DoC land in the Fiordland World Heritage area.

Smith is due to deliver a decision early next year on the application by Riverstone Holdings, backed by Wanaka property developer Bob Robertson, to spend more than $200 million on a three-stage journey between Queenstown and Lake Te Anau, including a 41 kilometre monorail.

Some 29kms of the monorail crosses conservation land in the Snowdon Forest Park and terminates at Te Anau Downs on the edge of the Fiordland National Park. Much of the area is part of the United Nations-designated Fiordland World Heritage Area, but only the national park lands are covered by special legal protections.

"This is the most significant concession ever sought on public conversation land and the longest monorail in the world. I want to ensure my decision is based on the best quality advice," said Smith in a statement.

While he was "satisfied" with DoC's recommendation that the monorail can be built across conservation land, "I also need to decide if the project is financially viable," said Smith.

"This is beyond the expertise of my department which is why I have asked for DoC to commission an independent financial viability report," Smith said. "If (the monorail) fails it could leave the department and taxpayer with a half-built or under-utilised structure through public conservation land.

"A bond can help manage these risks but it would never be possible to completely reverse the effects of such a construction. I need an independent robust assessment of the project's financial viability to enable me to make a good decision."

Smith said he expects to receive the additional advice in February and will make his decision after that.

The monorail faces stiff opposition, particularly from tourism operators and other businesses on existing routes between Queenstown and Milford Sound, including Te Anau township. The monorail bypasses Te Anau and Robertson is planning a new hotel and transport hub at the Te Anau Downs site where the monorail will end, roughly halfway between Te Anau and Milford Sound.

Local businesses fear this will take business away from them. Many also oppose the development because of its environmental impact, although the Snowdon Forest Park is outside the Fiordland National Park and is relatively rolling country by comparison with the more spectacular parts of the area.

The forest park includes some areas of mature native beech and is a habitat for rare native bats, which environmentalists fear would be disturbed by the development.

BusinessDesk.co.nz

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