NZIER report on compensation for transmission infrastructure
NZIER report on compensation for transmission infrastructure
NZIER report on compensation for transmission infrastructure
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Annual payments indexed and adjusted every five years will require the design of a<br />
method <strong>for</strong> paying landowners. There will be a labour cost <strong>for</strong> deciding when<br />
payments will be made and how to index compensati<strong>on</strong> amounts. There will be a<br />
cost associated with getting landowner agreement. Time per task is estimated based<br />
<strong>on</strong> our experiences per<strong>for</strong>ming similar tasks. We assume that Transpower would<br />
manage the process in-house with the following key costs:<br />
determining payment parameters:<br />
three m<strong>on</strong>ths labour at $7,300 per m<strong>on</strong>th<br />
establishing system <strong>for</strong> making payments:<br />
three m<strong>on</strong>ths labour at $7,300 per m<strong>on</strong>th<br />
legal drafting of methodology:<br />
three m<strong>on</strong>ths labour at $9,600 per m<strong>on</strong>th<br />
presentati<strong>on</strong> of methodology and discussi<strong>on</strong> with landowner representatives:<br />
presented by a Transpower employee and attended by 10 landowner<br />
representatives<br />
1 week of Transpower employee labour per meeting, including preparati<strong>on</strong> and<br />
travel time $1,700<br />
labour cost of $1,000 per landowner representative participant per meeting<br />
based <strong>on</strong> a full day participating in the meeting and two days labour preparing<br />
<strong>for</strong> the meeting<br />
travel cost of $600 per participant <strong>for</strong> 6 of the 10 participants, to cover return<br />
flights from regi<strong>on</strong>al centres to Wellingt<strong>on</strong>, taxi and other travel costs<br />
We assume that c<strong>on</strong>sensus will be reached with three meetings.<br />
5.1.2 Management costs<br />
Once new compensati<strong>on</strong> payments are developed and established, their<br />
management and oversight would incur additi<strong>on</strong>al <strong>on</strong>going costs to Transpower. A<br />
key expense will be every five years when the amount of compensati<strong>on</strong> payment is<br />
reviewed.<br />
For modelling purposes we assume that annual payments will be indexed to land<br />
price inflati<strong>on</strong> with compensati<strong>on</strong> amounts reviewed every five years based <strong>on</strong><br />
changes in land value and operati<strong>on</strong>al costs. For each five year review land will need<br />
to be valued <strong>for</strong> a range of uses and in a number of locati<strong>on</strong>s. Time per task is<br />
estimated based <strong>on</strong> our experiences per<strong>for</strong>ming similar tasks.<br />
Annual management of accounts:<br />
<strong>on</strong>e m<strong>on</strong>th labour per year at $7,300 per m<strong>on</strong>th<br />
Annual indexing of payments to inflati<strong>on</strong>:<br />
<strong>on</strong>e m<strong>on</strong>th labour per year at $7,300 per m<strong>on</strong>th<br />
Land value reappraisals every fifth year:<br />
<str<strong>on</strong>g>NZIER</str<strong>on</strong>g> – Compensati<strong>on</strong> <strong>for</strong> transmissi<strong>on</strong> <strong>infrastructure</strong> 39