A merger of the Bay of Plenty's two polytechnics is expected to cost $8.3 million with any savings made in the long-term invested back into improving services.
The expected cost of the merger, laid out in the business case, was $8.275 million over four years with $2.65 million set aside for "human resources and change", $2.5 million for "systems integration", and $1 million for "branding and marketing" among the largest expenses.
The business case explained the expenditure would be met "from cash reserves and a modest amount of borrowing".
Bay of Plenty Polytechnic council chairman Ian Turner said the cost estimates were based on similar mergers.
"We'd like to think that was excessive but we need to put a realistic figure into the business case to allow our council to make a decision. If we get the go-ahead we will refine that figure."
He said the cost of the merger should be seen as an investment and the aim was to attract more students to come through the polytechnic which would also generate more revenue, he said.
"We are hopeful that we will be able to demonstrate to the funding body that there are students out there that would like to take up some tertiary training but at present they are limited by lack of access from remote regions or by lack of funds."
The new entity would also be focused on attracting more international students and drawing students from outside the region.
"The scale creates opportunities to create opportunities of scale to free up funds to reinvest in other options throughout the region."
Bay of Plenty Polytechnic Windermere Campus in Tauranga
The business case explained that while the cost would outweigh net gains initially, by 2019 net profit was expected to be $1.4 million to $1.5 million per annum.
Mr Turner said the merger was necessary to expand the options for tertiary education throughout the region.
"That's the role of polytechs, to help those who might not otherwise get an education when they leave school," he said. "We know that there are a lot of people out there that are not getting much training and are not able to improve their standard of living." Graeme Nahkies, of the Waiariki Institute of Technology council, confirmed there were no plans for large numbers of redundancies.
"If the merger is approved, all existing staff, other than the two chief executives, will be offered positions with the new institution under existing terms and conditions. The HR costs identified in the business case are mostly the costs of setting up a new institution."
He said some of the HR costs in the business case were a contingency for the possibility that a "very small" number of staff on contracts not covered by technical redundancy chose to leave.
Keep Waiariki Local spokesman Tamati Coffey said the cost was a concern. "Waiariki's in a good financial state at the moment and by merging it the costs over the next little while won't put either entity in the black for the next 10 years," he said.
Haydn Marriner, also of Keep Waiariki Local, said he believed there would have to be redundancies to create the efficiencies the business case talked about in removing duplication of courses and admin staff. "There is not enough detailed information and the business case is 166 pages of vague," he said.
The section of the business case which stated the cost of the merger could increase to $9.8 million if the predicted student growth was 50 per cent less than forecast was also a concern, he added.
