Section 3.20 Economic Matters

Transcription

1 Section 3.20 Economic Matters

2 Terminal 0 Environmental Impact Statement Abbot Point Coal Terminal 0 EIS Adani

3 3.20 Economic Matters This section of the EIS describes the economic values of the Project area (which includes Bowen for the purposes of this assessment) and the wider Whitsunday Region in accordance with the published EIS Guidelines for the Project. The economic assessment is based on a technical study describing the economic impacts of the Project and is provided in Appendix E10. Measures are provided to prevent adverse project impacts on existing economic values at Abbot Point and nearby Bowen. Specific objectives of the economic assessment were to identify: The baseline economic values of the Project site and the wider region; The impact and extent of the impact of the Project on local and regional economies; and Develop a regional impact model to assess the projects impacts Assessment Method Study Area The Port of Abbot Point does not support a permanent population and is populated by a working population only. The Project will expand the working population with an anticipated construction workforce of up to 500 workers and a peak operational workforce in the order of workers. Hence, the economic assessment was based on the nearby Bowen community and the wider region. Four study areas were defined within the Queensland state for the purposes of the economic assessment. These include the Bowen statistical local area (SLA), the Whitsunday Regional Council (WRC) area, the Mackay, Isaac and Whitsunday Region (MIW region), and Queensland State (Figure 3-108). The Statistical Area Level 2 boundaries are used for the purposes of enterprise activity assessment only due to grouping of this classification by the Australian Bureau of Statistics (ABS) Existing Economic Environment A desktop assessment of relevant economic statistics and databases was used to describe the existing economic environment within the study areas. Data collected during the desktop assessment was used as inputs into predictive impact models. Material was collected and analysed from the following sources: Australian Bureau of Statistics (ABS); Office of Economic and Statistical Research (OESR); Local and State Government agencies; Property Market data; and Proprietary Economic Associates models. Terminal 0 Environmental Impact Statement 3-609

4 147 0'0"E 148 0'0"E 149 0'0"E 150 0'0"E 151 0'0"E 152 0'0"E 19 0'0"S 19 0'0"S 18 0'0"S 18 0'0"S 146 0'0"E TOWNSVILLE Port of Abbot Point Whitsunday Regional Council 20 0'0"S 20 0'0"S BOWEN G re y gor De al R 21 0'0"S MACKAY ent 21 0'0"S op m ve l Bowen Statistical Local Area wn s hw ay Hi Pe e uc Do g Hi Br ak Moranbah 22 0'0"S 22 0'0"S oa d Mount Rolfe w gh 25 0'0"S 25 0'0"S 24 0'0"S 24 0'0"S 23 0'0"S 23 0'0"S ay 146 0'0"E 147 0'0"E 148 0'0"E 149 0'0"E Abbot Point Coal Terminal 0 (T0) Project Highway Mackay, Isaac, Whitsunday Region Bowen Statistical Local Area Job: B12705_063-R1_Econ Date: 23/10/2012 Whitsunday Regional Council 151 0'0"E 0 Figure Study area for the economic assessment Legend 150 0'0"E APSDA Boundary 25, '0"E 50, , '0"E µ Metres DISCLAIMER CDM Smith has endeavoured to ensure accuracy and completeness of the data. CDM Smith assumes no legal liability or responsibility for any decisions or actions resulting from the information contained within this map. Data source: Roads, rail from Geoscience Australia; SLA, ABS (2011); LGA, DERM (2011); Imagery 2012, Bingmaps; CAIRNS TOWNSVILLE MOUNT ISA ROCKHAMPTON BRISBANE "

5 Economic Impact Assessment The assessment of economic impacts from the Project was completed using a risk based framework approach based on the anticipated interaction of the probability and consequence of impacts occurring. Each featured impact is given a qualitative measure of: The likelihood of the impact occurring; The consequence either beneficial or adverse, of the impact occurring; and The extent of the impact based on the interaction of likelihood and consequence. The descriptor of each measure is given in Table Table Risk Based Assessment Framework 1 Likelihood Descriptor Consequence Descriptor Impact Descriptor Almost certain Negligible Remote Likely Minor Rare Possible Moderate Unlikely Unlikely Major Possible Rare Extraordinary Likely Remote Almost certain Source: Framework derived from Queensland Treasury (2011); 1 : Refer to economic technical report at Appendix E10 for a full description of each descriptor Economic Impact Modelling This section of the report utilises data from the Existing Economic Environment and modelled impacts of project expenditures to analyse and assess the economic impacts of the project. It should be noted for the purpose of this section, that the employment impacts are reported in terms of full time equivalent (FTE) positions. This is discussed further in Section The economic impact assessment utilises a regional input-output approach, which provides indicative results relating to the total demand generated by the project during construction and operational phases in terms of output, household incomes, employment and value added. The total economic impact of a particular stimulus or activity comprises the following effects: Direct or initial effect: being the stimulus for the economic impact, typically described as the change in sales or contribution to final demand by the stimulus or activity; and Flow on effects, comprising production-induced effects and consumption-induced effects, these being: - First-round production effects: being those purchases of inputs required from other industry sectors in the economy to produce the additional output generated by the stimulus or activity - Industrial support production effects: being those second, third and subsequentround industrial flow on effects stimulated by the purchases made in the first round - Consumption induced effects: being those purchases made by households upon receiving additional income from labour payments stemming from the production of additional output generated by the stimulus or activity under assessment Terminal 0 Environmental Impact Statement 3-611

6 The extent of these impacts can be represented by multipliers calculated in aggregate for various regional, state or national economies. As stated above, there are commonly four multipliers used to measure impact - output, household income, employment and value added (refer to Table 2.1 below for additional detail). Two sets of the above multipliers can be generated, namely: Type 1 Multipliers, which estimate the direct and production induced impacts of a stimulus or activity; and Type 2 Multipliers, which estimate the direct, production induced and consumption induced impacts of a stimulus or activity. Type 1 Multipliers would be used in the analysis of this project. Queensland Treasury s preference is for use of only Type 1 Multipliers, given that Type 2 Multipliers typically overstate the extent of consumption-induced impacts of any given stimulus or activity. Table below provides a discussion of the different measures of economic impact. Table Measures of economic impact Impact Measure Output Household Income Employment Value added Description The output impact measures the increase in gross sales throughout the entire economy by aggregating all individual transactions (direct and indirect) resulting from the economic stimulus. The output impact provides an indication of the degree of structural dependence between sectors of the economy. However, output impacts are regarded as overstating the impact on the economy as they count all goods and services used in one stage of production as an input to later stages of production, hence counting their contribution more than once The household income impact measures the additional wages, salaries and supplements paid to households associated with the industry under consideration and with other industries benefiting from the stimulus to the economy The employment impact measures the number of full time equivalent (FTE) positions for one year created directly and indirectly by the stimulus 4. However, the short-term response to increased demand may be that existing employees work overtime. Consequently, actual levels of employment generated (in terms of persons employed) will tend to be lower than those estimated by the input-output analysis. This short-term employment response (of working additional overtime) will be more prevalent where the demand stimulus is likely to be temporary and short lived, or where there is limited spare capacity in the economy (that is, when the economy is at or near full employment) The value added or Gross Regional Product (GRP) impact measures only the net activity at each stage of production resulting from a stimulus. GRP is defined as the addition of consumption, investment and government expenditure, plus net exports (exports minus imports) from a region. The value added (or GRP) impact is the preferred measure for the assessment of contribution to the economy from a stimulus or impact, and as such should be used to describe the net impact of the event. Value added is the measure of economic impact resulting from a stimulus that is preferred by economists The regional input-output approach has a number of limitations, which may result in overestimation of impacts. These limitations include: The absence of capacity constraints such that the supply of each good is perfectly elastic, implying that each industry can supply whatever quantity is demanded of it and there are no budget constraints; 4 Therefore, if impacts are to be spread over a number of years, the FTE estimate (which relates to the annual equivalent) should be divided by the number of years over which the impact will be spread (in the absence of a clearly defined staging program) to provide an indicative ongoing employment estimate over the life of the impact. Terminal 0 Environmental Impact Statement 3-612

7 The assumed linearity and homogeneity of the input function, which implies constant returns to scale and no substitution between inputs. This occurs because the approach assumes inputs purchased by each industry are a function only of the level of output of that industry; Each commodity, or type of commodity, is supplied by a single industry sector, implying there is only one method used to produce each commodity and each sector has only a single primary output; The assumption that the economy is in equilibrium at given prices and that the economy is not subject to other external influences; and The additivity assumption suggests the total effect of carrying on several types of production is the sum of the separate effects, which is not a true reflection of economic systems. Despite these limitations the approach adopted was considered appropriate insofar as the host region and Queensland generally has a mature coal and coal logistics sector. The above limitations typically are most relevant when introducing a wholly new economic driver to a state or regional economy that may then result in significant structural change. In these terms, the Project represents the expansion of coal export operations from one of Queensland s most significant coal ports Existing Economic Environment Population Structure The population structure within the study boundaries was described using a number of measures (Table 3-135). The population structure was analysed in terms of population projection, demographics and existing workforce. A more detailed analysis of the trends of each population measure is included in the economic assessment technical paper (Appendix E10) Population Growth Between 2003 and 2007, all regions within the study area recorded a significant decline in the unemployment rate, consistent with strong economic conditions throughout Queensland during this period. However, between 2007 and 2009, WRC and the MIW region both recorded increases in the unemployment rate. The regional centre of Bowen currently has a population of approximately 15,017 people, 8% of the MIW region (Table 3-135). The population of Bowen is projected to increase to 22,194 people by 2031 at a rate of 2.1% per annum. This population growth is mirrored within the WRC and the MIW region according to population projections to 2031 prepared by the Department of Infrastructure and Planning (2011) Demographic Structure The recorded average age in 2011 ( years) was similar across the WRC and MIW region and is comparable to the Queensland state (38 years) (Table 3-135). Both the WRC area and MIW region have a significantly higher proportion of working aged males than females of any age group in comparison to the Queensland average. Couples and couples with children had a higher incidence within the study areas assessed, however within the WRC area, household structures without children are more prevalent than with children. The average household income in the WRC and MIW region has been increasing since 2001, though the WRC is marginally lower in average household income and growth rate than both the MIW region and the Queensland state. Terminal 0 Environmental Impact Statement 3-613

8 Workforce Profile An increase in the local resident workforce has been steadily intensifying since This growth has been particularly noticeable between 2010 and 2011 in the Bowen, WRC area, and MIW region locality (5.7%) especially in comparison to the Queensland State (1.5%). A decrease in unemployment was experienced in 2003 throughout the region, though a continual decreasing trend in unemployment to 2011 is not observed due to uncertain economic periods since The MIW region consistently has a lower unemployment rate and greater labour force participation increase since 2003 than the Queensland state average (Table 3-135). The net change of workforce participation is not as noticeable in the Bowen SLA (-4.4%) as in the WRC (-21.7%). However, when workforce participation is viewed between different sectors, significant changes between the years are observed. Construction has had the highest change in workforce numbers in Bowen SLA, whereas mining has experienced the greatest change within the WRC area for the period (Table 3-135). Terminal 0 Environmental Impact Statement 3-614

9 Table Population and Demographic Assessment Measure Bowen SLA WRC MIW Region Queensland Current Population 15,017 people 36,722 people 185,754 people 4,705,287 people (2012) Average Population 2.1% 2.2% 2.2% 1.8% growth ( ) 1 Average Age years 37 years 38 years (2011) 2 Family structure 2 Couples and children Couples Single parent family 21.8% 24.5% 7.7% 21.3% 22.5% 26.4% 7.8% 20.4% 31.8% 26.8% 8.4% 18.8% 29.5% 26.6% 10.7% 21.4% Single person household Average household $1,410 (6.7%) $1,407 (5.6%) $1,767 (6.9%) $1,501 (6%) income (% change per annum, ) 3 (AUD) Labour force 7,527 people 20,115 people 100,950 people 2,472,850 people (2011) 4 Average labour 2.3% per year 3.1% per year 3.9% per year 3.0% per year force change ( ) 4 Average labour 5.7% 5.7% 5.6% 1.5% force change ( ) 4 Unemployment rate 7.3% 6.1% 4.3% 5.5% (2011) 4 Unemployment rate - 0.2% per year - 0.2% per year - 0.3% per year - 0.2% per year change ( ) 4 Unemployment rate 0.5% 0.5% 0.2% 0.0% change ( ) 4 Average labour 75.3% 76.5% 76.1% 77.2% force participation rate ( ) 4 Change in working population for certain industry sectors 5 4.4%; Construction (104.7%); Mining (77%) % Mining (71.8%; Construction (65.5%); Arts / recreation (- 55.7%) 1 : Department of Infrastructure and Planning (2011); 2 : ABS (2012a); 3 : ABS (2012b); 4 : Department of Employment and Workplace Relations (various years); 5 : ABS (2008) Key Business Markets The key industry sector that operates within the WRC area, including surrounding the Project area is primarily Agriculture, Forestry and Fisheries (Table 3-136). The MIW region recorded similar findings for key industry sectors as the WRC area and included business servicing the construction and rental, hiring and real estate industries. The majority of registered employing businesses within the WRC and the MIW region primarily employ between 1 19 people. However, the mining sector within the MIW region was a dominant employment area for businesses employing greater than 200 people. The findings of the economic assessment suggest that the flow on effects such as material inputs, industrial and service support, and consumption effects from mining and construction activities within the MIW region are contributing to the principal business types within the MIW region. A Terminal 0 Environmental Impact Statement 3-615

10 lower incidence of professional, scientific and technical services occur within the region which suggests that organisations supplying these skills required for business activities are sourced elsewhere in Queensland. Table Key Business Economies 1 Measure Number of Registered Businesses Dominant Sectors (top 3) Key sectors where a business employs people (top 3) Key sectors where a business employs > 200 people 1 : Australian Bureau of Statistics 2012b Whitsunday Regional Council 5,110 (40% employing; 60% sole operator) Other services; Agriculture, forestry and fishing; Construction. Other services; Agriculture, forestry and fishing; Retail and trade Agriculture, forestry and fishing; Manufacturing. MIW Region 15,823 (39% employing; 61% sole operator) Agriculture, forestry and fishing; Construction; Rental, hiring, retail estate services. Accommodation and food services; Retail trade; Construction. Mining; Manufacturing; Accommodation and food services; Administration and support services. Queensland 430,406 (38% employing; 62% sole operator) Construction; Rental, hiring, retail estate services; Agriculture, forestry and fishing. Accommodation and food services; Retail trade; Manufacturing Administration and support services; Accommodation and food services; Manufacturing Local and Regional Economic Value The MIW region is responsible for contributing 7.3% to Queensland s gross state product. The MIW region s gross regional production is estimated at AU$15,176 million, with the following three business sectors the major contributors mining (52.8%); construction (6.9%); and transport, postal and warehousing (5.9%). The Mackay Fitzroy Central West labour force region (of which the MIW region is a part) has a competitive advantage in primary industries (mining and agriculture, forestry and fishing) in comparison to the overall Queensland state and can be considered base economies of the region. This advantage is due to locational aspects and suitable resources and capabilities existing in the Mackay Fitzroy Central West labour force region Property Market Real estate services are a key business industry within the MIW region. The property market profile assessment is summarised in Table The volume of house sales in the MIW region peaked in 2003 with 4,404 sales, and has fluctuated between 2193 and 4099 sales for other years Residential sales trend within the Bowen SLA has fluctuated similarly. House sales in Bowen contributed between 40 50% of the total residential house sales within the WRC. The increase in house sales were reflected in house values with the average annual growth rate of medium house sale price at 12.6% per annum for the MIW region. Other than residential house sales, the property market in Bowen for commercial, industrial and vacant land has been weak since The real estate sector in Bowen has been fluctuating significantly particularly in regards to industrial sales that peaked at AU$667 /m 2 and AU$883 / m 2 in 2007 and 2009 respectively. The medium industrial property sale price in 2011 sits at AU$20 / m 2. Overall, the entire property market in the MIW region has fluctuated throughout the years The MIW region as a whole consistently achieves higher medium property sales prices than the Bowen SLA and WRC medium sales price, with the exception of residential house prices. Terminal 0 Environmental Impact Statement 3-616

11 Table Existing Property Market at 2011 Measure Bowen SLA WRC MIW Region Number of house sales ,520 Median house sale price (AUD) $260,000 $330,000 $410,000 Number of unit / townhouse sales Median unit / townhouse sale price (AUD) $160,000 $275,000 $293,000 Number of vacant residential land sales ,068 Median vacant residential land sale price $140,000 $142,750 $175,000 (AUD) Number of commercial property sales Median commercial property sale price (AUD) $260 /m 2 $260 / m 2 $522 / m 2 Number of industrial property sales Median industrial property sale price (AUD) $20 / m 2 $20 / m 2 $209 / m 2 Number of house approvals Number of other residential approvals Total value of new houses (AUD) $ million $ million $ million Total value of other residential approvals $5.097 million $7.072 million $ million (AUD) Total value of non residential approvals (AUD) $9.049 million $ million $ million Note: Median industrial sales price should be interpreted with caution due to low sales volumes Source: Property Data Solutions (2012) Construction and Building Approvals Trends in construction and building approvals provide an indicator of economic growth within an area. The trend for the number of residential approvals within the Bowen SLA and Whitsunday LGA rose until approximately and has then steadily declined to under 100 housing approvals and under 30 approvals for other residential types in 2011 (Table 3-137). Elsewhere within the MIW region, residential approvals have followed a similar trend with the exception of where non-residential approvals spiked to 1,124 for the year, three times above the 10 year average. Apart from the aforementioned exception, the WRC area can represent up to 65% of building approvals within the MIW region for residential properties other than houses (ABS various years). The value of new residential houses in the MIW region and Bowen SLA has had an increasing trend since The WRC area had an increasing trend only until , from which a decreasing trend is now observed. The value of other new residential types has experienced an extremely volatile market within the MIW region, preventing any discerning trend from being interpreted over the past 10 years. Bowen, however has not experienced this volatility and the value of other residential approvals has steadily increased since 2001(ABS various years). The approval of non-residential premises has mirrored the residential approvals profile for the past ten years, with one major exception. A peak in within the MIW found the total value of non-residential approvals reach AU$ million (ABS various years) Regional Price Indices An assessment of the retail price index in the Bowen SLA, WRC and the wider MIW region from data compiled by OESR (2011b) found the cost of living in the WRC and wider MIW region significantly higher than the state s capital (Brisbane). This was particularly evident in the MIW region mining centres such as Moranbah, where the cost of housing and rental properties exceeds Brisbane s costs by 65% and 72% respectively. The overall cost of living in Bowen specifically is lower than that of Brisbane by 0.1%, however the cost of food and groceries is marginally higher (0.1%). Terminal 0 Environmental Impact Statement 3-617

12 Commercial Accommodation and Tourism The WRC area experiences good levels of tourism due to its proximity to the Great Barrier Reef World Heritage Area. A total of 576,000 domestic visitors (71% intrastate) and 158,000 international visitors visited the WRC area in the year to March The majority of visitors account for people on holidays as opposed to business purposes or visiting friends/family. The total domestic tourism expenditure in WRC was AU$36 million in the year to March 2012, while international overnight expenditure was AU$93 million. The level of commercial accommodation available for use located near the Project area was evaluated based on an assessment of the amount and availability of accommodation in the Bowen SLA and wider region (Table 3-138). Bowen has a total of 22 establishments classified as commercial accommodation. The average occupancy rates for Bowen accommodation establishments are approximately 55%, with the average number of vacancies per night at 100, 375, and 85 for hotels/motels, caravan parks, and hostels respectively. The available accommodation in Bowen does however fluctuate throughout the September quarter where occupancy rates can exceed 80%. The available accommodation in the wider region maintains occupancy rates around the yearly average. Table Commercial Accommodation Measure Bowen SLA WRC MIW Region Number of Accommodation Establishments Hotels / motels / apartments (room) 12 (268) 51 (3,043) 121 (5,402) Caravan Parks (capacity) 7 (685) 16 (1,554) 28 (3,180) Hostels (bed spaces) 3 (228) 9 (1,332) 9 (1,332) Average Occupancy Rates Hotels / motels / apartments (room) 59.3% 56.3% 62.7% Caravan Parks (capacity) 49.0% 49.0% 55.0% Hostels (bed spaces) 47.8% 62.3% 61.8% Terminal 0 Environmental Impact Statement 3-618

13 Future Economic Markets Proposed large development projects in the WRC area and the wider region are primarily centre on the mining sector. The Byerwen open-cut coal mine is the most significant proposed coal development project in the local government area in regards to capital expenditure (AU$1,500 million) and workforce requirements. The Shute Harbour marina development and a resort redevelopment are other major non-mining projects within the area. Within the MIW region, proposed coal mines and coal related infrastructure clearly dominate future developments. The top three candidates for capital expenditure include the Peak Downs and Caval Ridge mines (AU$4,200 million); Carmichael mine (AU$4,100 million); and Grosvenor mine (AU$1,700 million). Economic growth is likely to be driven by the mining sector in the region, with a continued decline in the agriculture, forestry and fishing sector Opportunity Costs A total economic value framework was used to identify the opportunity costs associated with the construction and operation of the Project. The opportunity costs represent the cost of site values that will be eliminated as a result of the project proceeding. These costs are often associated with indirect use values services provided by ecosystems and non-use values - existence value. The primary indirect use value at the Project site that is considered an opportunity cost includes the least concern Regional Ecosystem Corymbia Melaleuca woodland and high value regrowth vegetation Economic Impact Assessment This section details the potential impact the Project will have within the locality of Bowen and the wider region (state and national context) as a result of the construction and operational phases. The intensity of the proposed impacts will differ depending on the project phases. The construction phase will entail a more acute short term impact to economic values due to the limited timeframe and high workforce requirements, whereas the operational phase will entail more longer term medium impacts. Preliminary estimates of workforce requirements indicates that the construction phase would employ up to 500 workers, whilst peak operational employment would be in the order of full time and contract FTE positions (assuming an annual throughput of 70 Mtpa). Estimates of economic impact in this section refer to output (or consumption), household income, employment and value added for the MIW region, rest of Queensland and rest of Australia. Employment impacts are reported in terms of full time FTE positions, which refer to a quantum of employment (i.e. approximately 2,000 hours) as opposed to number of workers required. It is possible that the number of workers required to service the estimated employment demand may be more or less than the estimated full time equivalents due to shift or rostering arrangements and other workplace agreements Regional, State and National Economic Impacts during Construction Construction Overview Construction of the Project comprises a number of components, including: Preconstruction and approvals; Offshore construction, including: - Dredging (not assessed in this EIS) and navigational aids Terminal 0 Environmental Impact Statement 3-619

14 - Approach jetty/ trestle (MOF) - Wharf - Mooring and berthing dolphin - Conveyor gallery structural works - Ship loader Onshore construction and equipment, including: - Rail loops within a common rail corridor - Dump stations - Stockyard - Bulk earthworks - Stacker reclaimers - Conveyor systems - Surge bin - Sampling plant - Support vehicle fleet - Administration, service and amenity buildings - Warehouse and stores Section 2 Project Details outlines the two phases of construction. It is anticipated that Phase 1 of the construction phase is to occur between 2013 and 2016 to establish a facility with a throughput capacity of 35 Mtpa. The timing of Stage 2 (expansion of facility throughput capacity to 70 Mtpa) of the construction will be determined during detailed design and as production from the Carmichael mine is realised, but is likely to occur concurrently with parts of Phase 1, total construction period is anticipated to occur between Q2-Q and Q Output During Phase 1 of construction of the Project, total output or construction effects are anticipated to peak in 2014 and 2015 at AU$131.7 million in the MIW region, AU$109.7 million in the rest of Queensland and AU29.8 million in the rest of Australia. The construction sector is anticipated to record the most significant output or consumption effect during Phase 1, peaking at AU$89.3 million in the MIW region, AU$51.7 million in the rest of Queensland and AU$14.7 million in the rest of Australia. During Phase 2 of construction of the Project, total output or construction effects are anticipated to peak in Year 2 and Year 3 at AU$197.0 million in the MIW region, AU$134.9 million in the rest of Queensland and AU$34.0 million in the rest of Australia. The construction sector is anticipated to record the most significant output or consumption effect during Phase 2, peaking at AU$15.7 million in the MIW region, AU$65.2 million in the rest of Queensland and AU$16.9 million in the rest of Australia. The distribution of output or consumption effects from the Project during construction for all relevant services sectors can be found in Table 4.1 of Appendix E10. Terminal 0 Environmental Impact Statement 3-620

15 Household Incomes Total household income effects generated during Phase 1 of construction are estimated to peak in 2014 and 2015, at AU$26.4 million in the MIW region, AU$25.3 million in the rest of Queensland and AU$6.7 million in the rest of Australia. The construction sector accounts for over half of all income effects in the MIW region during Phase 1, peaking in 2014 and 2015 at AU$15.1 million. In the rest of Queensland, the construction sector and professional and technical services sector account for over half of all income effects during Phase 1, peaking in 2014 and 2015 at AU$9.0 million and AU$7.1 million respectively. In the rest of Australia, the construction sector and professional and technical services sector also account for over half of all income effects during Phase 1, peaking in 2014 and 2015 at AU$2.6 million and AU$1.5 million respectively. During Phase 2 of construction, total household income effects are anticipated to peak in Year 2 and Year 3 at AU$23.8 million in the MIW region, AU$30.6 million in the rest of Queensland and AU$7.7 million in the rest of Australia. The distribution of income effects from the Project during construction for all relevant services sectors can be found in Table 4.2 of Appendix E Employment Employment generated during Phase 1 of construction of the Project is projected to peak at 313 FTEs 5 in the MIW region, 342 FTEs in the rest of Queensland and 88 FTEs in the rest of Australia. In the MIW region, approximately half of all employment during Phase 1 is anticipated to be within the construction sector, peaking at 152 FTEs. In the rest of Queensland, during Phase 1, employment is anticipated to be highest in the construction and professional and technical services sectors. In the rest of Australia, over half of all employment is anticipated to be within the construction and professional and technical services sectors. During Phase 2 of construction, employment impacts are anticipated to peak in Year 2 and Year 3 at 445 FTEs in the MIW region, 417 FTEs in the rest of Queensland and 100 FTEs in the rest of Australia. Similar to employment impacts during Phase 1 of construction, the most significant employment impacts are within the construction and professional and technical services sectors. Distribution of employment effects from the Project during construction for all relevant services sectors can be found in Table 4.3 of Appendix E Gross Value Added During Phase 1 of construction, total gross value added impacts are anticipated to peak in 2014 and 2015 at AU$40.5 million in the MIW region, AU$38.8 million in the rest of Queensland and AU$10.5 million in the rest of Australia. Over half of all gross value added impacts during Phase 1 of construction are anticipated to be within the construction sector in the MIW region. In the rest of Queensland, gross value added impacts during Phase 1 of construction are concentrated within the construction and professional and technical services sectors. Gross value added impacts within the rest of Australia are concentrated within the construction and professional and technical services sectors. During Phase 2 of construction, total gross value is anticipated to peak in Year 2 and Year 3 at AU$59.4 million in the MIW region, AU$47.8 million in the rest of Queensland and AU$11.9 million in the rest of Australia. Distribution of value added effects from the Project during construction for all relevant services sectors can be found in Table 4.4 of Appendix E10. 5 A full time equivalent position represents approximately 2,000 worker hours. The ultimate number of workers would be determined by shift arrangements. Hence, full time equivalent positions do not necessarily translate into workers. Terminal 0 Environmental Impact Statement 3-621

16 Regional, State and National Economic Impacts during Operations Operating Scenarios Overview The annual costs data in relation to the operation of the Project was modelled for four export throughput scenarios, these being: 20 Mtpa- Operation via one in-loader, one bund, two stacker reclaimers, one outloading system and one ship loader; 30 Mtpa- Operation via one in-loader, two bund, three stacker reclaimers, one outloading system and one ship loader; 50 Mtpa- Operation via two in-loaders, two bunds, four stacker reclaimers, two outloading systems and two ship loaders; and 70 Mtpa- Operation via two in-loaders, three bunds, six stacker reclaimers, two outloading systems and two ship loaders. Annual operating expenses for each of the four scenarios were included for a number of cost items including: Full time and contract labour; Computing; Consumables; Electricity; Contractors; General administration; Plant lease and hire; Telecommunications; Insurance; Consulting and training; Transport; and Loading supervision and trimming Output The operation of the Project is anticipated to generate total output of consumption effects of AU$52.4 million to AU$111.1 million per annum within the MIW region. The industry sector recording the largest output effect is the cost of full time and contract labour, with impacts of AU$29.1 million to AU$57.7 million per annum. Total output or consumption impacts generated by the operation of the Project are anticipated to range between AU$19.4 million and AU$47.5 million per annum in the rest of Queensland. Annual output impacts within the rest of Queensland are most significant within the logistics, financial and Terminal 0 Environmental Impact Statement 3-622

17 insurance services sectors. The distribution of output or consumption effects from the Project during operations for all relevant services sectors can be found in Table 4.5 of Appendix E Household Incomes Household income effects generated as a result of the operation of the Project are estimated to be AU$10.1 million to AU$22.1 million per annum within the MIW region and AU$4.6 million to AU$11.8 million per annum within the rest of Queensland. The industry sector recording the largest household income effect within the MIW region is the full-time and contract labour sector, with impacts of AU$4.4 million to AU$8.8 million per annum. In the rest of Queensland, the largest household income effect is within the financial and insurance services sector, at AU$1.4 million to AU$3.9 million per annum. The distribution of household income effects from the Project during operations for all relevant services sectors can be found in Table 4.6 of Appendix E Employment The operation of the Project is anticipated to generate up to 174 direct FTE positions and up to 120 indirect FTE positions within the MIW region. A significant proportion of total jobs generated within the MIW region are anticipated to be within the administrative, operational and mechanical/electrical trades (up to 127 jobs). In the rest of Queensland, up to 65 direct FTE positions and indirect FTE positions will be generated as a result of the operation of the Project. The distribution of employment effects from the Project during operations for all relevant services sectors can be found in Table 4.7 of Appendix E Gross Value Added The gross value added generated at the operational phase of the Project is anticipated to be AU$23.0 million to AU$50.9 million per annum in the MIW region. The rest of Queensland is anticipated to record gross value added impacts of AU$9.5 million to AU$23.5 million per annum as a result of the operation of the Project. The distribution of value added effects from the Project during operations for all relevant services sectors can be found in Table 4.8 of Appendix E Economic Growth The Project will provide economic growth to the Bowen locality and the wider Whitsunday region from direct inputs and the project s flow on effects. The financial value of the Project is expected to generate between AU$1.4 billion and AU$2.8 billion per annum in gross regional product based on the projected export of thermal coal from Adani and other miners coal projects that will use the multi-user terminal. The Project will provide opportunities for local suppliers to support the construction and operation of the Terminal, rail and jetty components of the project. In addition, the consumption of goods from household incomes of employees will generate growth within the area. The economic growth in the Bowen locality will peak during the construction phase then stabilise during the operational phase. Terminal 0 Environmental Impact Statement 3-623

18 Population Growth The Project will result in an increase in population within the Bowen SLA. Population growth places an increased demand on local government for housing, services, utilities provision, and transport. A short-term peak in demand will occur during the construction phase, with longer-term demand during the operational phase Total Economic Value and Opportunity Costs The Project will directly impact the ecosystem services from the remnant vegetation and high value regrowth at the project site. The financial value of ecosystems are inherently difficult to cost and various measures have been proposed (IDC-EEC 2003). This study uses the benefit transfer technique where valuations from primary research conducted for other projects are applied to the Project. Using this technique, approximately 47 hectares of remnant vegetation will be lost, translating to capitalised value of AU$0.6 million. This figure is based on a total economic value of woodland vegetation at a price of AU$200/ha/annum 6 and a social opportunity cost of capital of 6% (IDC-EEV 2003). As the Project plans to remove the native vegetation, this is a likely event having a medium impact at the Project site Labour Costs The Project is estimated to employ approximately 500 workers during construction and full-time and contract workers during the operational phase. During the peak Phase 1 (i.e and 2015), the Project is anticipated to generate an additional 313 FTE positions throughout the MIW region. Peak employment in the MIW region during Phase 2, is estimated to be approximately 445 FTE positions in Years 2 and 3 of Phase 2. A possible impact is the tightening of the local and regional labour market resulting in increased labour costs throughout the area. When considering only the Project, this is likely to cause only minimal impact as the unemployment rate is high and labour force participation is low in the Bowen and WRC areas in comparison to the states average. An added beneficial impact is the likely reduction in unemployment within the wider MIW region Local and Regional Infrastructure Pressures The Project will impact upon the local and regional infrastructure network, primarily during the construction phase. Once the proposed rail is constructed, impacts will reduce during the operational phase as the new rail will service the increased coal throughput. The Project will initiate costs to government and utility suppliers through additional supply of energy, telecommunications, drinking quality water and other infrastructure Property Market Inflation The Project will possibly result in an increased demand for housing. The impacts will be short term during the construction phase (a temporary construction accommodation camp will be established), however longer term housing demand will possibly exist during the operational phase of the project as workers seek permanent accommodation. The declining trend in the residential property market seen within Bowen and the WRC area may stabilise medium housing prices rather than increase house prices. 6 This represents a weighted value making an allowance for a small proportion (i.e. <5%) of woodland and forest areas to comprise wetland type areas Terminal 0 Environmental Impact Statement 3-624

19 The flow-on effects of the Project will generate business opportunities for suppliers and industry in the wider MIW region. This will possibly create an increased demand for commercial and industrial land. The economic assessment has predicted that this impact will be low due to the existing latent site capacity and depressed commercial and industrial property markets within the Bowen and the WRC area Skills shortages The Project will create a short-term demand for people with vocational skills during the construction phase of the project. Such demand for up to 500 workers will possibly result in a skills shortage in the local area. The impact of this skills shortage on the Project is likely to be medium as the demand is short term and the impact is reduced through the employment of non-resident workers. The impact of skills shortages will be more pronounced if the construction period occurs at the same time as the development of other projects also requiring a high labour force Mitigation and Management Strategies The assessment criteria to minimise adverse impacts on the economic profile of the Project area and wider region include: Provide no net loss of indirect and non-use economic values as a relative component of the Project area s total economic value; Minimise impacts on employment in the Bowen and Whitsunday local area; Minimise inflation in the property market; and Minimise impact on local and regional infrastructure Loss of Total Economic Value The loss of economic value of the Project site through the loss of ecosystem services provided by native woodland vegetation will be mitigated through the Proponent biodiversity offset plan (Section 5.2 Offsets). This offset plan will provide no net loss of woodland ecosystem services within the MIW region Labour Costs and Skills development The Project has the potential to increase labour costs through a labour shortfall within the local area and the wider MIW region. To mitigate these impacts, the following measures will be undertaken: Develop programs with relevant stakeholders for the purpose of identifying employment opportunities for the local latent workforce population. The programs should endeavour to assist local businesses to provide the skills for local people to re-enter the workforce and up skill the unemployed or underemployed. These programs should: - Increase the capacity of local job seekers to develop relevant skills for construction and port operation and maintenance - Identify skills gaps and develop customised training programs, including those undertaken as part of the Work Readiness Program and Resources Industry Training Fund (RITF) Terminal 0 Environmental Impact Statement 3-625

20 - Collaborate with Energy Skills Queensland to identify opportunities for skill development of Study Area residents and develop training programs to address identified gaps Contribute to work experience and training programs that local training providers can access to increase the available pool of skilled labour in the region; Identify if opportunities exist for securing funding for skills development through the Skills Queensland Strategic Investment Fund to support the teaching and administration of training programs; and The use of a non-resident workforce when a demand for workers exceeds supply within the local government area Local and Regional Infrastructure The development of the Project will impact upon local and regional infrastructure through the utilisation of transport corridors, energy networks, telecommunications, water and wastewater supply utilities, and general services. This impact will not necessarily always occur at the Project site, but rather in trips to the site and the increased demand for services from the population growth resulting from the Project. The proposed mitigation measures to address infrastructure include: Transport management (Section 3.17 Road Traffic and Transport); Working with utility providers to identify opportunities for service provision with minimal impacts to existing users; and Water supply (including drinking water) and wastewater treatment at the Project site to alleviate demand on local services. Refer to Section 2 Project Details and Section 3.1 Legislation, Land Use and Planning for proposed water and wastewater approvals Local Economic Growth The Project has the potential to boost the local economy through direct inputs required for the project and the employment of the local population. To encourage local economic growth, Adani will: Seek to employ a local workforce population in the first instance; Seek to utilise local businesses for supplies and industrial processes through: - Collaboration with Council, economic development organisations, Industry Capability Network (ICN), Queensland Government and the existing mining supply chain to inform local business of the goods and services required of the project, service provision opportunities and compliance requirements of business to secure contracts - Develop and implement a Local Content Strategy, including the development of relevant networks and alliances to assist qualified local and regional businesses tender for the provision of goods and services to support the Project Contribute to training and development programs access by local training providers Localised Property Market Inflation Terminal 0 Environmental Impact Statement 3-626

21 The Project has the potential to impact the property market within the region resulting in increased housing costs, particularly in the operation phase. Local inflation in property markets as a result of large infrastructure or mining projects has been observed in other regional centres within the MIW region. To minimise this adverse impact Adani will: Establish a workers accommodation on or near the site (such as at Merinda) so high demands will not be placed on local commercial accommodation as well as preventing a shortage of residential housing properties; Establish an accommodation plan that includes a register of local accommodation providers and rental agents. The accommodation plan will be reviewed every three months for the duration of construction and first two years of operation. Relevant excerpts will be provided to Project employees and contractors upon request; and Develop a workers code of conduct for non-resident workers employed during the construction phase Monitoring Adani will commit to the following monitoring programs throughout the duration of the Project: Ongoing review of accommodation impacts related to the Project in the Bowen SLA and WRC housing market (rental and owner occupied) during the construction phase of the project; Ongoing review of contractor usage of skills development and training programs; and Ongoing review of the uptake of supply contracts by local businesses and provide feedback opportunities for suppliers to identify issues and difficulties in meeting compliance requirements of supply contracts Commitments Adani commit to undertaking the following actions to protect and enhance the economic values in the region: Local employment program development and implemented to identify employment opportunities for local latent workforce population; Contribute to work experience and training programs implemented by local training providers which can access the available pool of skilled labour in the region; Teaching and administration of training programs will be supported; Non-resident workforce will only be used when a demand for skills exceeds supply within the local government area; Transport management plan development and implementation; Ensure water supply (including drinking water) and wastewater treatment at the Project site; Seek to utilise local businesses for supplies and industrial processes - To encourage local economic growth; Establish a workers accommodation camp on or near the site - With the intention that high demands will not be placed on local commercial accommodation as well as preventing a shortage of residential housing properties; Terminal 0 Environmental Impact Statement 3-627