Building spree by unis seen as risky
Universities and polytechnics have embarked on a building spree which will raise their debts by more than half and risks creating overcapacity.
The Tertiary Education Commission’s briefing to Education Minister Chris Hipkins, released yesterday, says the collective debts of stateowned tertiary institutes will rise from $452 million at the end of last year to $697m next year.
“Some [institutes] are engaged in significant capital developments to build modern facilities to help them attract additional students,” it said. “A risk exists that multiple developments of this kind across network could result in capacity exceeding demand.”
About 80 per cent of the new building appears to be in Auckland. Latest financial information shows Auckland University, AUT, Unitec and the Manukau Institute of Technology (MIT) had committed credit lines totalling $613m out of a national total of $792m.
Massey accounted for a further $28m, with most of its development likely to be on its Auckland campus at Albany.
Auckland University is creating a new campus for engineering and related facul- the ties in Newmarket, and recently announced a new $116m health sciences building opposite Auckland City Hospital, replacing its Tamaki campus which will be sold off.
Unitec has the most ambitious plans outside the universities, with a $250m campus redevelopment underway that will be partly funded by selling much of its current Mt Albert site for housing.
Universities NZ director Chris Whelan said most of the universities’ capital spending was to replace ageing science and engineering buildings dating from the 1950s and ’60s.
“All the buildings have reached the end of their life, and often for science and engineering facilities refurbish- ment is not an option.”
The commission’s briefing expresses concerns about the long-term viability of some polytechnics, especially in smaller regions.
“These institutions lack the economies of scale of larger organisations, often serve the needs of a geographically dispersed population, and struggle to attract international students outside Auckland,” it said.
However, the independent chairman of NZ Institutes of Technology and Polytechnics, Charles Finny, said he did not believe the new Government would allow any regional polytechnics to close and looked forward to increased demand under the zero-fees policy.