The socio-economic impact assessment for the Head of Lake Wakatipu Adaptation Strategy, by engineering consultancy Beca Group Ltd, will be presented to Otago regional councillors tomorrow.
Otago Regional Council natural hazards manager Dr Jean-Luc Payan said the report was a key piece of work in the council’s natural hazards adaptation programme.
The assessment was built on technical studies and community engagement done thus far, Dr Payan said.
It highlighted several vulnerable sectors of the community, including tourists, seniors, people with low incomes, and young families new to the area, he said.
It also showed access to and from Queenstown and within the local area was important for social and economic wellbeing, he said.
The Glenorchy Community Association called for the assessment as the council began work on the project, saying the true extent of what was at stake if flooding or an earthquake struck Glenorchy must be understood before a plan was put in place.
The report spelled out the damage, repair costs and economic impact of three scenarios: a major Alpine Fault earthquake, a major flood and repeated moderate floods.
It said about 50% of the Glenorchy township fell within a high liquefaction hazard zone, and another 30% fell within major or severe lateral-spreading damage zones.
In a major earthquake, an estimated 50% of buildings in the high liquefaction hazard zone would suffer "severe damage", it said.
Between 75% and 90% of homes in the major or severe lateral-spreading damage zones would be damaged past the point of repair.
Depending on the intensity of the shaking, some buildings would collapse.
With the median house price in the area at $900,000, "the total damage to households in Glenorchy would be at least $100 million", it said.
With 1km to 3km of roads at risk in the same area, the cost to repair or replace roading infrastructure could cost between $700,000 and $2.1m, the report said.
Clean-up could cost $200,000 and the effect of one to two weeks of no tourism activity would cost the area between $250,000 and $500,000.
"Assuming average daily tourism spending in the area reduces by 50% for three months following a major Alpine Fault earthquake, this would be equivalent to a $1.5m to $3m loss in income", the report said.
"Due to the extent of damage and economic hardship experienced under this scenario, some businesses may be forced to close or struggle to return to usual operations."
In a major flood, 40 homes would be flooded, 20 homes would be in an area where floodwaters would be greater than 50cm, and 10 homes would be unlivable, the report said.
It could take up to three months for tourists to return, costing the area up to $1.5m.
"Long-term economic losses would likely be less direct, such as increases in insurance premiums and less investment in the Head of the Lake."
Repeated moderate flooding would affect 10 homes in the area and although there would be a short-term loss of income in that scenario, most businesses were likely to recover in the long term, the report said.
A key issue for the community both socially and economically was the "resilience" of access to and from the area.
However, the community was changing as it grew, it said, and the "awareness of the environmental risks and corresponding preparedness may not be as front of mind for newcomers".
This would need to be factored into planning for the future.
