Waikato Business News October/November 2017

WAIKATO BUSINESS NEWS October/November 2017
9
Prison extension would
be massive for Waikato
Waikato is in for an economic tsunami
starting next year if a plan to build a
massive extension to Waikeria Prison south
of Te Awamutu passes its final test in the
Environment Court.
By ANDREA FOX
Construction of a new
facility for 2000 extra
prisoners at the prison
on the border of the Otorohanga
and Waipa districts is expected
to pump $1.6 billion into the
Waikato region over four construction
years, 2018-2021. The
value-added component of this
is estimated to be about $500
million, according to an independent
economic report commissioned
by the Corrections
Department.
This is big. Very big.
All these people are
going to need to shop,
to be fed and housed.
The $1.6 billion is the direct
injection plus flow-on effects
that will be felt within the
region, with the new facility
anticipated to sustain employment
equivalent to around 1960
full time jobs for a year in the
Waikato region.
On average this means 490
full-time job equivalents will be
created each year of the build,
says the report by Market Economics
Limited. Construction
will require the employment
equivalent to 45 percent of the
current regional labour supply.
Peak job creation will be in
2019 and 2020 when the majority
of construction activity
happens.
Corrections expects the $1
billion new facility to employ
595 custodial staff and 335 prison
support workers, creating a
total of 930 fulltime equivalent
- and on-going - jobs.
While the proposal to lift the
capacity at the prison by 1500
prisoners was approved by the
Government last year, business
leaders suggest the economic
effects of the project have yet
to sink in at Waikato Inc. (The
new facility will have room for
a further 500 prisoners if needed
in future.)
With a temporary population
explosion from the construction
work and the prospect of hundreds
of new permanent residents
and their families from
2021, Waikato services and retail
sectors can expect to be in
the money.
As Waikato Means Business
chairman Dallas Fisher has been
heard to say: “This is big. Very
big. All these people are going
to need to shop, to be fed and
housed.”
Put simply, people working
on the build and later within
the prison will need supermarkets
and homes, their cars will
need fuel and service, their
houses will need tradespeople,
their children will need schooling.
They’ll want to buy stuff.
They’ll want coffee. They’ll
want to eat out and socialise.
They’ll be spending.
Operating at full capacity,
the 2000 prisoner facility is
expected to spend on average
$150 million a year, says the
report.
The new build will add 16
percent to Otorohanga job numbers
alone, and about 26 percent
to non-primary sector job numbers,
says the report. Currently
there are around 4440 jobs within
Otorohanga, of which 2750
are in the primary sector. Otorohanga
district’s population at the
2013 Census was nudging 9600
and expected to decline. Waipa
district, which includes the large
towns of Cambridge and Te
Awamutu, had a population of
48,700, and a working age population
of around 27,000.
To give an idea of the scale
of the new facility, it will occupy
up to 78 hectares of the 1278
hectare dairy farm which hosts
the current prison.
It will be built by a public-private
partnership. Construction
hopefuls were shortlisted
by Corrections in April
and the successful contractor
will likely be signed up in the
second quarter of next year.
The report says around 11
Image: Otorohanga Lions Club.
percent of the estimated total $1
billion cost of building the new
prison will be heavy and civil
engineering construction. It expects
the majority of construction
employment to be within
the Waikato region, in line
with most construction project
trends.
It assumes providers of design
services and fit out suppliers
will be Waikato-based.
Construction jobs are likely
to go to a mix of current Waikato
residents and workers who
move into the region for the
build or longer, says the report.
“A build of this scale, potentially
requiring a large proportion
of the current resources is
likely to lead to price rises. Construction
workers will be able to
raise their salary and wage demands
and this will attract more
workers into the region to take
advantage of those increased
wages.
“It will also generate interest
in both currently unemployed
workers and those in other industries
who may choose to
switch – as well as those currently
in training or education to
look to this sector for employment.”
There will be scope for training
organisations in the construction
phase.
Corrections acting national
commissioner Rachel Leota
says the bid to change the existing
designation for the prison in
the Otorohanga district plan to
allow for the expansion is now
before the Environment Court.
She says the department continues
to work closely with the
two district councils to ensure
all opportunities for the local
districts and Waikato region are
maximised.
Consultation with local people
and local iwi on community
aspects of the proposal is ongoing,
she says.
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Waikato Branch – Upcoming events/courses
At the Institute of Directors
we’re on the pulse of governance.
Connecting, equipping and
inspiring directors through thought
leadership and our extensive
network, professional governance
courses, events and resources.
718 November
October CPD: 2 points
CEO/Board The Digital Director relationship with David panel Bell discussion with Margaret Devlin,
Carlos da Silva and Kirsten (KP) Patterson
12.00pm 7.00am - 9.00am, - 2.00pm, FMG The Stadium Grandstand, Waikato Claudelands
7 November CPD: 2 points
24 November
CEO/Board relationship panel discussion with Margaret Devlin, Carlos da Silva and Kirsten
Waikato Branch Christmas Cocktail Function
5.30pm (KP) Patterson – 7.30pm, FMG Stadium Waikato
12.00pm - 2.00pm, The Grandstand, Claudelands
To register, please contact:
Megan Beveridge,
Branch Manager
Waikato.branch@iod.org.nz,
021 358772 or www.iod.org.nz
Waikato branch is kindly sponsored by: