The fault could move 1-2m vertically and up to 9m horizontally at the southern end of the township. Houses would be shifted off foundations and there would be widespread landslides and rockfalls, some that could fall onto the town. The report also said there could be liquefaction.
GNS Science endorse that the town be moved 5km to 10km north west of the fault line.
"We recommend that the council undertakes a cost-benefit analysis in consideration of relocating the town of Franz Josef."
The Waiho River, which flooded and destroyed the Scenic Hotel earlier this year, is carrying sediment that is increasing the height of the riverbed. At the current rate the riverbed could be 4m higher in 20 years. If a one in 100 year flood then hit it could send 1m deep floodwaters through the township.
GNS Science recommends the north bank of the Waiho must remain protected by a floodwall. It also said the community should consider relaxing the confinement of the stopbanks on the south side, and sacrificing farmland to allow the river to flow freely.
Catastrophic rock avalanches, especially in the range east of the town,could lead to a "considerable portion, if not the entire town, being overrun" stated the report.
GNS Science said more work is needed to understand the landslide risk.
A landslide dam is another risk, whereby a dam could fill and then burst. In 1999 a dam formed in the Poerua River, near Hari Hari, and when it burst it flooded and damaged lowland native forest.
Several catchments around Franz are at risk, including the Callery River, where water from a dam break could hit the State highway bridge, heliport and lower part of the township.
The report concluded the Alpine Fault rupture and a century-scale flood are the biggest risks, and have about the same chance of occurring (0.01 per year).
Council has referred the 70-page report to the Franz Josef natural hazards working party, but has yet to discuss the findings.