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Canterbury university may need govt help on earthquake remediation

Canterbury University has sufficient financial resources to manage its immediate obligations and is talking to the government about how to meet any shortfall in the amount its insurers pay, says vice-chancellor Rod Carr in a letter to holders of the university's $50 million of listed bonds.

Wednesday, 18 May 2011

by Jenny Ruth

The university's balance sheet showed $750 million in equity and $67 million in working capital at March 31, Carr says.

"We are well insured and will rely on our insurers to make good damage to our infrstructure, lost revenue and increased costs to the extent of our policy," he says.

"We are also in discussion with the government about the resources required to meet the difference between what our insurers will pay towards reduced revenue, increased costs and the costs of remediation and meeting new code requirements in Christchurch."

Carr says accounting standards require the university to treat insurance payouts as revenue while repairs are treated as capital costs and there will be timing differences between when cash is received and repair costs paid which will impact on the university's financial statements for a number of years.

About 80% of the university's 240 buildings have been reoccupied following the February 22 earthquake and that should rise to 90% by the end of May, he says.

It currently has about 150 trades people on site working on 17 buildings. The university has also commissioned about 15,000 square metres of temporary covered space costing about $25 million to house its teaching and staff offices while remediation continues.

At May 8, the 15,566 students enrolled were about 90% of the number enrolled a year earlier, Carr says.

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