Uni building programme faces delays

Much of the University of Otago’s building programme could be put off for three or four years, after the Government rejected all five of its "shovel-ready projects" applications.

The university is nearing the end of a significant first wave of capital spending, but a rethink will be needed about the multimillion-dollar second wave that was to get going next year.

Fallout from Covid-19 put a dent in the affordability of the university’s programme, and senior leadership had hoped the Government would pitch in with support for any or all of its shovel-ready projects.

"Given we were confident that we have put forward the strongest case possible as to why these projects should be funded, we are very disappointed," university chief operating officer Stephen Willis said.

All the projects had demonstrable benefits and would have directly supported more than 500 jobs when under way, Mr Willis said.

They would have sustained the university’s economic and social contribution into the future, he said.

Dunedin projects included a 450-bed residential college and refurbishment and seismic strengthening of the consumer and applied sciences and Gregory Buildings. The university also planned to refurbish and extend the physical education complex.

The Dunedin projects were worth about $180million and the university planned to reconfigure the Wellington School of Medicine and develop the health sciences block in Christchurch at a cost of about $170million more.

Mr Willis said university leadership would have to develop a new long-range capital plan, taking into account operational budgets and forecasts.

The university’s 2020-32 capital plan was prepared before Covid-19 struck and it included $1billion of direct capital expenditure.

It would have generated about $2.1billion for the national economy.

The university will have to re-evaluate how much of the programme it can realistically get through and the timeframes for it.

Mr Willis wrote to Dunedin Mayor Aaron Hawkins a month ago, warning him about the university’s predicament if the Government did not approve the shovel-ready projects.

The university had projects worth $180million in the pipeline for Dunedin in 2021, he said in the letter. All were at risk of being paused and deferred without government support, Mr Willis wrote.

The most recent financial update from the university, at the September meeting of its council, included comment that Covid-19 was putting pressure on operating cash flows and ongoing savings would be needed.

Borrowing is expected to be required from the end of the year.

Comments

Get back to being educators rather than property developers! You have lost your way Otago Uni..and while you're there start paying rates and doing youre part for the City

 

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