The true impact of the proposed Gold Coast cruise ship terminal

THE Gold Coast City Council’s proposed cruise ship terminal on The Spit will bring in almost $4 billion to the economy over 30 years, according to a feasibility study by PwC.

THE Gold Coast City Council’s proposed cruise ship terminal on The Spit will bring about $4 billion into the economy over 30 years, according to a feasibility study by PwC.

It will generate up to 430,000 extra night stays, 3500 jobs and up to 212 ship stops a year, each bringing in $220,078 in revenue.

But Mayor Tom Tate’s promise that the terminal would be built at no cost to ratepayers faces challenges, with the report saying there is “very little appetite” for the private sector to take risks on large-scale projects.

Gold Coast Mayor Tom Tate. Picture: Jerad Williams.

“A rigorous options development and assessment process has determined that an Oceanside Cruise Ship Terminal (OCST), with an in-line wharf and jetty sheltered by a breakwater, is feasible,” the report reads.

“The OCST will have a significant positive economic impact on the Gold Coast and Queensland through increased visitation, employment, value add and output and is valued in the study at between $3.46 billion and $4.25 billion.”

The proposed offshore Gold Coast cruise ship terminal. Photo: Supplied

The report says cruising is one of the fastest-growing tourism sectors internationally.

“As an example of the opportunity offered to the Gold Coast by the cruise shipping sector, over the past 10 years domestic visitor nights on the Gold Coast declined by almost 20 per cent. During this same period, Australian cruise ship passenger numbers increased by 480 per cent.”

The study, commissioned by the council, was released to the public yesterday in redacted form after being deemed non-confidential last month.

The report noted the cost of building the terminal would be $463 million. It said it would take more than 30 years any the private firm that built the terminal to get their money back from the construction costs.

The Gold Coast City Council’s proposed cruise ship terminal on The Spit will bring in almost $4 billion to the economy over 30 years, according to a feasibility study by PwC.

If approved by the State Government it would take three years to construct and be ready in 2022.

“The business case has highlighted that the ocean-side cruise ship terminal will increase total visitor nights to the city between 109,137 to 431,374 annually,” the report said.

The report shows the terminal, which would be built as a single-berth jetty about 1.2km offshore, would initially berth at least 20 ships a year with a view to grow to a maximum 212.

There is an option to build a second berth at a later date.

PwC said the transit port favoured by the council was not viable, returning only 60 cents for every dollar spent.

A home port, which would allow ships to turn around, fuel up and stay overnight would bring returns of between $3-4 for every dollar spent.

The proposed offshore Gold Coast cruise ship terminal. Photo: Supplied

“The results suggest that direct ocean-side cruise ship terminal revenues are not sufficient to fully recover the capital outlay (principal and interest) required for construction of the ocean-side cruise ship terminal over the 30-year analysis period, with the expectation of the observed growth and with upper bound revenues,” the report reads.

This means the cruising industry would have to continue with its boom growth of almost 15 per cent and the highest level of fees would need to be charged at the terminal.

The report shows the industry’s future is not clear.

“The future demand for cruising is inherently uncertain, particularly considering the proposed CST would not begin operating until 2022,” the report reads.

Cr Tate has said the project would be built at no cost to the city via a private partnership, but the report noted possible problems with this approach.

“Since the high-profile failure of multiple toll roads domestically due to lower-than-expected patronage there is very little appetite for private investors to take patronage risk on large-scale infrastructure,” the report said.

The report goes on to outline that unless cruise companies are willing to sign long-term agreements to use the facility for at least 15 years, it is “unlikely private finance will be available”.

The conclusion of the report says that “while is it possible for a Gold Coast CST to generate a financial return in a limited number of scenarios, it is likely the facility would represent a net cost to the city over the term of the analysis (30 years)”.