Tiavea middle of nowhere
Re: Stream of benefits and net present value
The problem with NPV and stream of benefits is that it is quite impossible to foresee into the future the stream of benefits that an airport in the bush will bring.
It is easier to calculate stream of benefits near Mt Druitt because there is actual infrastructure nearby and there would probably be a business study done into the airport at Badgery’s Creek (that proposed airport has been talked about forever). Mt Druitt is not in the middle of nowhere.
On the contrary, Ti’avea is pretty much in the proverbial middle of “nowhere”. Ti’avea and the land is one of the most isolated villages in Samoa. The only piece of infrastructure nearby is Richardson Road.
Not sure if any study was done on Ti’avea. I’ve previously called for a proper plan into the proposed township at Aleipata. It is a district airport like Maota and Asau. The stream of benefits would appear to be relatively low unless there are actual flights to be organised.
There is no indication of any flights organised to use the Ti’avea airport as yet. There is very little information about the viability of the airport. Certainly, most comment in the media seems to be it is a “waste of money”. Therefore, given this, it would appear that even under the “stream of benefits” mechanism you and your mates at the Market are using, the land is still worth very little.
Again, I say leasing is better than selling. If the Ti’avea airport becomes a success in the future and if we eventually get that Aleipata township within 20mins drive of Ti’avea, then Ti’avea’s annual lease payments will go up with the value of the land.
If the airport ends up being a “white elephant” like Asau, then at least Ti’avea is still getting annual payments from the empty airport. Ti’avea gets nothing by selling except a one-off payment which, in my opinion, is still a low value because the “stream of benefits” have not adequately been identified.