A University of Otago plan to spend more than $600
million on infrastructure will be a ''major shot in the arm''
for the Dunedin construction industry and create hundreds of
Chief operating officer John Patrick revealed the figure at
the university's council meeting yesterday, saying it had
earmarked ''more than $600 million'' in spending as part of
its priority development plan.
Most projects that were part of the plan - which included the
upgrade of the university's dental school - would start in
the next two years, Mr Patrick said.
The latest amount tagged for infrastructure spending
represents a more than $240 million increase on the figure
provided to the Otago Daily Times last year, when the
university said it was budgeting $358 million for
construction projects, from 2012 until 2020.
At that time, there were 22 projects in its priority
development plan, 20 of which were in Dunedin.
Naylor Love chief executive Rick Herd said the university's
building programme would be a ''major shot in the arm'' for
all participants in the construction industry, including main
contractors, subcontractors and suppliers.
''I would expect $600 million worth of work in Dunedin would
represent hundreds of jobs for the region overall,'' he said.
The question would be whether the jobs could be sustained in
''We need to be looking at a sustainable construction
industry ... [so people] aren't going to have come in for
those projects and leave again, because there is nothing else
The revelation from the university came as the construction
industry in New Zealand was ''generally on the up'', but
Dunedin had been ''lagging a little bit''.
''It's very encouraging to see the renewed level of
opportunity in Dunedin,'' Mr Herd said.
Vice-chancellor Prof Harlene Hayne earlier this month said
the university council would soon vote on the order in which
projects on its priority development plan would be
''We are looking at some of the biggest capital development
this university has ever seen ... over the next five to eight
years,'' she said.
''It's an incredibly ambitious series of building projects
and really just signals the fact that the university is in
really good heart.''
News of the planned $600 million spend on new infrastructure
comes as it yesterday reported an ''excellent'' operating
surplus of $36.5 million last year.
Mr Patrick said the surplus was larger than expected mainly
because of ''one-off'' items, including almost $8 million
worth of insurance payouts from the Christchurch earthquakes.
The university reached an agreement in December with its
insurers on the final costs of the repairs to the medical
school buildings in Christchurch.
''These buildings were heavily damaged in the devastating
2011 earthquake, '' he said.
Another one-off item was the ''stunning success'' in the
market of Pacific Edge Ltd, a publicly listed biotechnology
company which originated at the university.
''The university enjoyed unrealised gains of almost $2.5
million from the increase in the value of its shareholding
[in Pacific Edge] at year end.''
A further $1.9 million was also added to the surplus after an
unexpected reduction in the estimated cost of future staff
retiring gratuities, long-service leave and sick leave.
The result was also testament to ''prudent financial
management'' and savings made by university staff and was an
''excellent result'' even after allowing for the one-off
The university finished the year debt free and with $92.3
million in cash on hand, which was tagged to be spent on
Maintaining strong cash flows was ''key'' to funding new
investment in campus infrastructure, especially given the
''major building projects we have got coming up over the next
year or two''.
''The largest of which ... is the dental school, which is
likely to be the single-largest project ever undertaken by
the university,'' he said.