MIT's 2014 report shows that student numbers have been hit as more people find work. Photo / Nick Reed
MIT's 2014 report shows that student numbers have been hit as more people find work. Photo / Nick Reed
Manukau polytechnic hit by $30m building-cost blowout and last year's drop in numbers.
A major Auckland tertiary education provider is under financial strain after a building project blew out by $30 million and a buoyant economy dried up student numbers.
Ambitious building plans by Manukau Institute of Technology that would have transformed its campuses will likely not begin for at least 10 years.
Increasing student numbers will be crucial to the polytechnic's recovery, but its latest annual report shows that full-time numbers fell last year.
There was a $7.5 million shortfall against budgeted revenue from the government and student fees, and the polytechnic slipped into a net deficit.
Tertiary Education Minister Steven Joyce is keeping a close watch on its performance, but is confident it can continue to control costs.
MIT was put in financial strife after the cost of its new 20,000sq m building ballooned by $30 million after the collapse of builders Mainzeal in 2013.
The project ended up costing around $100 million after Hawkins Construction completed the seven-level building, which sits on top of the Manukau Rail Station and next to Westfield Manukau City.
When the building opened last year, its backers spoke of the hope it would not only transform Manukau's central business district but also lift the area's study rates.
However, MIT's 2014 report shows that student numbers have been hit as more people find work, with domestic full-time-equivalent numbers falling to 6561 - down from 7118 in 2013, and below the target of 7026.
A 10 year-plan has been revised and investments including a Pasifika centre, engineering and technology workshops are on hold indefinitely.
Mr Joyce said the new Manukau campus was a great asset, but had caused a decline in MIT's financial position.
He said the level of debt MIT had taken on was unusual, but he believed the right steps were being taken to manage it.
He and the Tertiary Education Commission were monitoring progress, and the Ministry of Education had placed an independent monitor at MIT as part of the institute's consent to borrow up to $30 million.
"Enrolment numbers were down last year, but we understand both domestic and international enrolments are up again significantly this year," Mr Joyce said.
"[MIT's] council and management are doing a good job of controlling costs, and as a result their finances are doing better than forecast." MIT's chief executive, Dr Peter Brothers, said good financial management and fiscal controls delivered an operating surplus of 10 per cent and a lower level of debt than predicted. MIT remained financially stable.
"Due to a refocus on new programme development and marketing strategies we have seen significant growth in student numbers in 2015."
Otara-Papatoetoe Local Board chairman Fa'anana Efeso Collins said there had been huge excitement in the community about MIT's build programme, including the Pasifika centre.
"We recognise what the challenges are that they are going through ... we were envisioning it as a cultural hub. There was huge disappointment by the community [when told it would not go ahead]."
The Tertiary Education Union's organiser for MIT, Chan Dixon, said about 70 positions were disestablished late last year.
"I have been involved with MIT now for about eight years ... and I haven't seen things as bad as they are now in turns of staff feeling, to varying degrees, vulnerable, with ongoing job security. There is a level of anger there."
As well as the Mainzeal collapse, Ms Dixon said, another factor was inadequate Government funding. There was also a "fair degree" of scepticism about the original decision to build the new Manukau building.
She said it was hard to gauge how AUT University's heavy investment in its South Campus at Manukau might affect MIT.
Smaller classes justify long journey
Nitish Walia believes he'll have a closer relationship with his MIT lecturers than he would get at bigger campuses. Photo / Nick Reed
Nitish Walia lives close to Auckland's biggest university campuses, but has chosen to make a longer commute to study because he likes the idea of a smaller class environment.
The Sandringham 25-year-old was yesterday finalising his application papers at the Manukau Institute of Technology, where he will study for a business accounting degree.
Asked why he did not apply to the University of Auckland or AUT University, his answer was simple - as a student, he wanted a closer relationship with his teachers.
"I wanted to go to a place like MIT because the classes would be smaller and the lecturers can get to know you better and help you more closely.
"I think MIT is better for me compared to the other unis. They're too big and have a lot of people. I like that it's smaller here."
Mr Walia did not know about the issues that have stalled development at the Manukau campus and did not think he would be affected. But he did worry for future students and how they might be affected by the slow expansion.
"There are heaps of facilities around that would [cater] to us - including the Otara campus. But it might be a problem to younger students. Some of the courses might not be available because of this."
Cherie Shand, an office worker nearby, said the campus development had been huge news when it was announced and many in the community had been looking forward to it.
"It's such a great loss for Manukau City because it would have helped to revitalise here."
Mrs Shand acknowledged that although MIT's Otara campus remained relatively close, the campus near the Manukau Westfield Mall was attractive to those who lived further out, particularly those from Papatoetoe and Papakura.
High school teacher Amelia Tuitupou said many Pasifika students in South Auckland enjoyed having access to tertiary education near home.
"A lot of the courses these campuses offer also take into account Pacific culture and learning and incorporate that into their courses, which many students are attracted to."
