[PRO] Kangaroo Island Bridge - $5b

Developments in Regional South Australia. Including Port Lincoln, Victor Harbor, Wallaroo, Gawler and Mount Barker.
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Nort
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[PRO] Re: Kangaroo Island Bridge - $5b

#31 Post by Nort » Fri Jul 27, 2018 10:18 am

how good is he wrote:
Fri Jul 27, 2018 9:53 am
ml69 I totally agree it may not stack up but that would be the private consortiums problem. Nort (over) development on KI could happen regardless of a bridge so it’s up to Govt/council/planners to put policies/zoning etc in place to protect KI from this.
Yeah, but the bridge would only be financially viable if that type of massive development of the island happens. That being the case there are two options.

1) The company building the bridge would be doing so knowing that they would be able to use the scale of their investment as justification to get those planning rules changed.

2) The company building the bridge is entirely incompetent. In which case they definitely shouldn't be trusted to maintain a piece of infrastructure such as a mega-bridge.

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[PRO] Re: Kangaroo Island Bridge - $5b

#32 Post by Algernon » Sun Aug 05, 2018 6:25 am

Even if such a stupid idea was viable it wouldn't stack up against $5 billion of opportunity cost.

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[PRO] Re: Kangaroo Island Bridge - $5b

#33 Post by how good is he » Sun Aug 05, 2018 12:30 pm

Again it was to just begin the discussion based on it being done 20+ years away [my guess is prob. 50 years]. Say Adelaides population is double/triple and the visitor numbers to KI are double/triple...would it make sense then?

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[PRO] Re: Kangaroo Island Bridge - $5b

#34 Post by Ho Really » Sun Aug 05, 2018 1:26 pm

how good is he wrote:
Sun Aug 05, 2018 12:30 pm
...would it make sense then?
It doesn't make sense now and it won't make sense then for many reasons. As for KI, it should stay isolated. The more pristine it is the better.

Cheers

P.S. Edited...corrected a spelling error.
Last edited by Ho Really on Sun Aug 05, 2018 9:22 pm, edited 1 time in total.
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[PRO] Re: Kangaroo Island Bridge - $5b

#35 Post by Algernon » Sun Aug 05, 2018 6:52 pm

how good is he wrote:
Sun Aug 05, 2018 12:30 pm
Again it was to just begin the discussion based on it being done 20+ years away [my guess is prob. 50 years]. Say Adelaides population is double/triple and the visitor numbers to KI are double/triple...would it make sense then?
No, because of the opportunity cost. 5 billion is a ridiculous amount to spend to allow people to watch penguins. Especially considering right now they can catch a ferry and watch the penguins.

Also, a 14km bridge over sea will not be 5 billion. Not even close.

There will always be a list as long as john holmes for infrastructure projects that will deliver more benefit. Going by the Oaklands underpass project, you could probably sink 30 level crossings in metro Adelaide for that amount.

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[PRO] Re: Kangaroo Island Bridge - $5b

#36 Post by how good is he » Sun Aug 05, 2018 10:42 pm

Yes if Govt was doing it ...but if built/paid by private consortium/s then it’s their decision to make it work, not the taxpayers. I also get that people want to keep KI isolated but even without a bridge the tourists & people living on KI will be growing exponentially regardless. It’s more about how to deal with it.
From the 2016 census - The Fleurieu – Kangaroo Island region was South Australia’s fastest growing region outside of Adelaide in percentage terms, increasing by 17.4 per cent since 2011.

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[PRO] Re: Kangaroo Island Bridge - $5b

#37 Post by Nort » Mon Aug 06, 2018 12:25 pm

how good is he wrote:
Sun Aug 05, 2018 10:42 pm
Yes if Govt was doing it ...but if built/paid by private consortium/s then it’s their decision to make it work, not the taxpayers.
When a critical piece of private infrastructure fails or is abandoned due to being financially nonviable then history shows taxpayers almost always take on responsibility for it.
I also get that people want to keep KI isolated but even without a bridge the tourists & people living on KI will be growing exponentially regardless.
It’s more about how to deal with it.
From the 2016 census - The Fleurieu – Kangaroo Island region was South Australia’s fastest growing region outside of Adelaide in percentage terms, increasing by 17.4 per cent since 2011.
From the census, Kangaroo Island population:

2001: 4,238
2006: 4,260
2011: 4,417
2016: 4,702

For Kangaroo Island that 2016 number is a 6.5% growth from 2011, quoting the combined Fleurieu - KI region number is very misleading.

Let's look at the ABS estimates year on year:

2004: 4,384
2005: 4,440 (+1.3%)
2006: 4,456 (+0.3%)
2007: 4,484 (+0.6%)
2008: 4,536 (+1.2%)
2009: -
2010: -
2011: -
2012: 4:579 (+0.9% since 2008)
2013: 4,636 (+1.2%)
2014: 4,706 (+1.5%)
2015: 4,777 (+1.5%)
2016: 4,890 (+2.4%)

If we generously assume that KI maintains a 1.5% year on year population growth that means the population of KI in 2048 will be a whopping 7,643.

So when it comes to a financial case for the bridge, the local population isn't going to pay it back.

Let's make some viability calculations though:

Let's assume that the bridge has 30 years to break even on initial construction costs, and that the 5 billion estimate is accurate and there are zero ongoing upkeep costs.

Let's also assume that over the next 30 years KI has an average population of 6,000. We'll say that every one of them want to cross the bridge once a year.

There are currently around 150,000 visitors a year to KI. Let's assume the bridge triples that to 450,000 visitors a year.

We'll also add on 50 trucks a day carrying produce from KI farms due to the easier access. (18,250 a year)

So 474,250 return crossings a year in a super optimistic scenario. To make back the initial 5 billion over 30 years that's $351 toll per return crossing, substantially higher than the ferry costs. The numbers simply don't make this financially viable unless you increase development on KI by an entire order of magnitude. Do that however and you will lose what makes KI such an appealing destination for tourists in the first place.
Last edited by Nort on Tue Aug 07, 2018 11:48 am, edited 1 time in total.

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[PRO] Re: Kangaroo Island Bridge - $5b

#38 Post by Listy » Tue Aug 07, 2018 10:50 am

Nort wrote:
Mon Aug 06, 2018 12:25 pm

So 474,250 return crossings a year in a super optimistic scenario. To make back the initial 5 billion over 30 years that's $351 toll per return crossing, substantially higher than the ferry costs. The numbers simply don't make this financially viable unless you increase development on KI by an entire order of magnitude. Do that however and you will lose what makes KI such an appealing destination for tourists in the first place.
475,000 X 350 is about $166 million a year in revenue - that will maybe barely cover the cost of servicing the interest on a $5 billion loan, let alone pay off the principle & pay all the yearly oncosts like maintenance, wages & insurance!
My guess is that a road bridge of 10+km in length probably requires 50,000-100,000 vehicle crossings a day to be both economically sensible & reasonably priced in terms of toll fares.
Meanwhile if you ran 2 x ferries, each fitting 150 vehicles, and each made 4 return trips a day you'd get about 450,000 return trips in the year. Google tells me a ferry of that size costs about $15 million Euros a year to run, so say $50-60 million / year AUD for both. Free ferry trips for everybody would appear to be many times cheaper than the ongoing yearly cost of a bridge.

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[PRO] Re: Kangaroo Island Bridge - $5b

#39 Post by ml69 » Thu Aug 09, 2018 6:11 pm

Listy wrote:
Tue Aug 07, 2018 10:50 am
Nort wrote:
Mon Aug 06, 2018 12:25 pm

So 474,250 return crossings a year in a super optimistic scenario. To make back the initial 5 billion over 30 years that's $351 toll per return crossing, substantially higher than the ferry costs. The numbers simply don't make this financially viable unless you increase development on KI by an entire order of magnitude. Do that however and you will lose what makes KI such an appealing destination for tourists in the first place.
475,000 X 350 is about $166 million a year in revenue - that will maybe barely cover the cost of servicing the interest on a $5 billion loan, let alone pay off the principle & pay all the yearly oncosts like maintenance, wages & insurance!
My guess is that a road bridge of 10+km in length probably requires 50,000-100,000 vehicle crossings a day to be both economically sensible & reasonably priced in terms of toll fares.
Meanwhile if you ran 2 x ferries, each fitting 150 vehicles, and each made 4 return trips a day you'd get about 450,000 return trips in the year. Google tells me a ferry of that size costs about $15 million Euros a year to run, so say $50-60 million / year AUD for both. Free ferry trips for everybody would appear to be many times cheaper than the ongoing yearly cost of a bridge.
Agreed. If you do any financial analysis on this project (and I'm a finance analyst by profession), you quickly find that the project will NEVER, EVER stack up financially.

Subsidised ferry trips is a much more logical way to go to encourage KI development.

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