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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C<strong>on</strong>tents<br />
1. Background ............................................................................................................. 7<br />
1.1 Compensati<strong>on</strong> ................................................................................................. 7<br />
1.2 Report structure .............................................................................................. 8<br />
1.3 Problem definiti<strong>on</strong> ........................................................................................... 9<br />
2. Easements ............................................................................................................. 10<br />
2.1 Efficient compensati<strong>on</strong> .................................................................................. 10<br />
2.2 Equity – splitting the surplus ......................................................................... 11<br />
2.3 An ec<strong>on</strong>omic framework ............................................................................... 11<br />
2.3.1 Estimated easement costs and efficiency ........................................................................ 13<br />
2.3.2 Splitting the surplus efficiently ......................................................................................... 13<br />
2.3.3 How compulsory purchase changes negotiati<strong>on</strong>s ............................................................ 14<br />
3. Literature review ................................................................................................... 17<br />
3.1 Structure of review ........................................................................................ 17<br />
3.2 Land access and the basis of compensati<strong>on</strong>................................................ 18<br />
3.2.1 Utilities‟ rights to land ...................................................................................................... 18<br />
3.3 Efficiency....................................................................................................... 18<br />
3.3.1 Equivalence of loss ......................................................................................................... 18<br />
3.4 Standard features of compensati<strong>on</strong> .............................................................. 19<br />
3.4.1 Easement area ................................................................................................................ 19<br />
3.4.2 Land market value........................................................................................................... 20<br />
3.4.3 Injurious affecti<strong>on</strong> ............................................................................................................ 21<br />
3.4.4 Operati<strong>on</strong>al costs ............................................................................................................ 21<br />
3.4.5 Externalities .................................................................................................................... 22<br />
3.5 Damages....................................................................................................... 23<br />
3.6 Payment methods ......................................................................................... 23<br />
3.6.1 Payment per structure ..................................................................................................... 25<br />
3.6.2 Splitting the surplus ......................................................................................................... 25<br />
3.7 Negotiati<strong>on</strong>s .................................................................................................. 26<br />
3.8 Summary of literature key points .................................................................. 27<br />
4. Efficiency: Valuing easements ............................................................................ 29<br />
4.1 Calculating the cost of easements ................................................................ 29<br />
4.1.1 Market value of land ........................................................................................................ 30<br />
4.1.2 Easement area ................................................................................................................ 30<br />
4.2 Operati<strong>on</strong>al costs .......................................................................................... 31<br />
4.2.1 Key operati<strong>on</strong>al costs ...................................................................................................... 32<br />
4.2.2 Quantifying operati<strong>on</strong>al costs .......................................................................................... 35<br />
4.3 Disturbance ................................................................................................... 35<br />
4.4 Externalities .................................................................................................. 35<br />
5. Periodic payments ................................................................................................ 37<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> v