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University director of campus development David Perry said completion of its $50million animal testing facility in Great King St had been delayed about two months after asbestos board and roofing shards were found in the ground.
It was now expected to be finished by November 2018.
The find comes after the university’s plan to convert the former Wickliffe Press site into a multimillion-dollar car park was also delayed after asbestos was found buried at that site.
University property services director Barry MacKay said in March the find was expected to add between $300,000 and $400,000 to the car park’s total cost.
Mr Perry said the cost of dealing with the asbestos at the Great King St site was not yet known.
Removal of the material containing asbestos had begun and was expected to continue until midway through next month.
Because the material was "bonded" it was of low risk, as asbestos was only a hazard if it was in a respirable state, which meant it could be breathed in.
Mr Perry said the discovery of asbestos-contaminated sites was not uncommon in Dunedin, or elsewhere in New Zealand.
"Each occurrence is treated and carefully managed through the establishment and implementation of an asbestos control plan."
It was not known when the ground became contaminated, but the material was found under the location of structures and trees put in place about the time State Highway 1 was realigned in the 1970s.
"As the contamination predates this work, it is most likely the asbestos was either from the buildings that were demolished on the site to make way for the road realignment or it was mixed with the building rubble that was used for fill during the construction of the road."