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$107.5m to Lincoln University science re-build

Hon Steven Joyce
Minister for Tertiary Education, Skills and Employment

17 July 2014 Media Statement
$107.5m to Lincoln University science rebuild

Tertiary Education, Skills and Employment Minister Steven Joyce today announced that the Government has approved in principle to provide up to $107.5 million in capital funding toward the rebuilding of Lincoln University’s science facilities destroyed in the Canterbury earthquakes.

“Lincoln University suffered very significant damage in the Canterbury earthquakes, and this money will assist the university with its rebuild programme and help it get back fully on its feet. Lincoln is focused on growing its undergraduate enrolments and the rebuild of its key facilities is the next stage in returning it to sustainable operations", Mr Joyce says.

Lincoln University lost more than 40 per cent of its academic floor space in the Canterbury earthquakes, including much of its facilities for science teaching and research. The rebuild will involve demolishing the badly damaged Hilgendorf and Burns buildings, and replacing them with modern facilities.

“The Government funding of up to $107.5 million is almost a third of the projected cost of the total campus rebuild of $349 million. It reflects the Government’s focus on the rebuild of Canterbury, our support for Lincoln University as it recovers from the earthquakes, and our commitment to using science and technology to increase export earnings from the agricultural sector,” Mr Joyce says.

The funding is contingent on the university fully integrating its new facilities with the other major partners in the new Lincoln Hub.

"The rebuild of the university, together with the existing campus development plans of the crown research institutes located at Lincoln, means we have a unique, once in a generation opportunity to combine the physical operations of all these entities in one integrated campus serving 900 scientists, students, and industry,” Mr Joyce says.

"I have made it a condition of sign-off for the development plans of all the hub partners that they fully integrate their development plans to the benefit of all parties and New Zealand as a whole, and I look forward to seeing that confirmed before final approvals for construction are given."

The Lincoln Hub is a partnership among Lincoln University, DairyNZ, and Crown Research Institutes. It will be an incubator for research, innovation and wealth creation in the agricultural sector, with one of the highest concentrations of agricultural and environmental scientists in the Southern Hemisphere, working together to bring new ideas to market and develop new export opportunities.

“Every 1 per cent increase in primary sector productivity generates an additional $4 billion in exports for New Zealand. The agricultural sector is a powerhouse of the New Zealand economy, and the Lincoln Hub will bring together some of the best minds working in the sector today to help lift innovation productivity in the sector,” Mr Joyce says.

“As New Zealand’s specialist land-based university, Lincoln University is a major player in tertiary education and research in the agricultural sector in its own right. Modern, safe, fit-for-purpose science facilities will be integral to its future success and to the success of the Lincoln Hub.”

An initial payment of $7.5 million will be made to Lincoln University by the end of July this year, with up to an additional $100 million paid in instalments throughout the project. Construction is expected to start in the second half of 2015, with completion scheduled for 2018/19.
Questions and answers

Why is the Government supporting the rebuild?
The Canterbury earthquake caused significant damage to Lincoln University, particularly its science teaching and research facilities. The university has been using temporary facilities since the earthquakes and has seen a significant drop in student numbers.

New, state-of-the-art science facilities will be a huge asset to Lincoln University and significantly assist its recovery in student numbers. They will also be beneficial for the Lincoln Hub, a key incubator for ideas and innovation in the agricultural sector.

The agricultural sector earns New Zealand $36 billion in exports each year, and Lincoln University is a leading player in the sector’s teaching and research.

The new science facilities and the Lincoln Hub will provide opportunities for those export earnings to increase significantly as researchers and industry work together to bring new products to market.

How much will the rebuild cost overall?
Lincoln University’s business case puts the overall cost of its campus wide capital rebuild at $349 million. The Government has approved in principle to providing capital funding of up to $107.5 million towards the science facility project, and Lincoln University is funding the rest through of mix of insurance payments, cash flow and borrowing.

Why is Government contributing at all?
Universities usually have to fund their building projects from their own balance sheets.
The Canterbury earthquakes were a highly exceptional case that required a response from the Government to support the key public tertiary institutions in the region. The Government has also supported the rebuild of damaged facilities at the University of Canterbury and at CPIT.

The Canterbury earthquakes had a significant detrimental impact on Lincoln University’s enrolment numbers and revenue. Not investing in new facilities would lead to a further decline in student and staff numbers and undermine the financial viability of the University.

How has Lincoln University been managing so far?
Very soon after the earthquakes, Lincoln University established temporary science facilities so it could continue its teaching and research. Nonetheless, it experienced a considerable decline in student numbers. These temporary facilities will remain in use until the new science buildings are completed.

What’s the timeframe?
Lincoln University is working with its Hub partners now to complete its initial design, concept and costing. We’ve asked for a full Implementation Business Case in the first half of next year, with construction proposed to start in mid-year and the intention that new facilities will be completed in 2018/19.

What are the key challenges facing Lincoln?
The key challenge for Lincoln is to increase enrolment numbers, which declined following the earthquakes, and return to a fiscally strong position. The creation of the new science facilities and the Lincoln Hub are integral to this. Lincoln will be aiming to increase its agriculture-related enrolments at degree level and above. The Ministry for Primary Industries’ recent capability report identifies this as an important source of future talent to support the growth of the land based industries.

Will the Government give Lincoln a lump sum payment?
Future payments will be based on Lincoln meeting agreed construction milestones.

How will the Government make sure the investment delivers benefits?
The Crown will put in place a funding agreement with Lincoln that will ensure the successful delivery of the science facilities and the wider benefits associated with the integration of these facilities with the Lincoln Hub partners.

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