Departure tax may fly to help pay for new terminal

EVAN HARDING
Last updated 05:00 18/07/2013
Invercargill airport

LONG AND LOW: An artist’s impression of the new Invercargill Airport terminal building

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Travellers leaving Invercargill Airport in future may have to pay a departure tax to help fund a new $13.3 million terminal building.

Invercargill Airport chairman Joe O'Connell yesterday announced that Holdco - the Invercargill City Council's holding company - will fund the construction of a new terminal building to replace the current terminal which is 50 years old and has "significant seismic issues".

The city council unanimously decided on Tuesday night to direct Holdco to invest $13m of capital into the airport upgrade.

The new terminal will be a 2900sqm single-level building on the same site as the current building and will be constructed in three stages over about 20 months, with work to start about March next year and finish in late 2015.

Although the new terminal building would be just 300sqm bigger than the current building, its space would be better used and the baggage collection area would be inside the main complex, Mr O'Connell said.

The airport will continue to function while the rebuild is taking place.

An option of refurbishing the current building had been considered but it was deemed impractical given the current building had significant seismic issues and met just 23 per cent of the New Zealand building code standard, he said.

The new building would be suitable for the next 10 years and it was designed in a way that expansion was possible, he said.

Holdco chairman Norman Elder said it would borrow the $13m and repay it in 20-25 years, or earlier, depending on Holdco's income generation from its council-owned companies.

Once Holdco had borrowed the $13m it would either lend the money to the airport company or convert it to capital by issuing shares, which was the preference of the airport company, Mr Elder said.

Mr O'Connell said it was too early to say whether a departure tax would be introduced for travellers leaving the airport but it was an option.

He believed the public understood the new $13m building was a significant investment in infrastructure and someone had to pay for it to ensure the airport remained operational.

Invercargill Mayor Tim Shadbolt said an English teacher had many years ago taught him that first impressions did count, and the airport was Invercargill's gateway. The city council was also conscious that it needed to set a high standard when it came to having buildings that met current building standards.

AT A GLANCE

New Invercargill Airport terminal building.

Size: 2900sqm single floor building.

Existing terminal building is 2600sqm

Estimated cost: $13.385 million

Start date: First quarter of 2014.

Finish date: Late 2015.

Total passenger numbers when airport terminal built in 1964: 44,000

Total passenger numbers in 2012: 273,000

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