Managed isolation and quarantine costs top $1.2 billion as operation prepares to downsize
Wednesday, 9 March 2022
The bill for running managed isolation and quarantine during the Covid-19 outbreak has topped $1.2 billion, as the system scales back to just four hotels.
An Official Information Act response from the Ministry of Business, Innovation and Employment (MBIE) revealed that since it took over MIQ management in July 2020, it has spent $1.26b on hotel accommodation, transport, security, MIQ unit staff, and invoicing guests.
This does not include the cost of paying frontline government workers employed by district health boards, the Defence Force, Police and the Aviation Security Service.
As of February 21 there were 5511 MIQ workers, of whom 3179 were employed by hotels or third party contractors.
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Security to keep staff and guests safe, and prevent the latter from absconding, accounted for just over 40 per cent of the MIQ workforce, and the bill for private security personnel alone was $68m.
CCTV cameras and associated costs came to $6.7m, with a further $913,000 spent annually on leasing security fencing, plus $763,000 on radios and $201,000 on security assessments.
Just what would happen to the CCTV gear installed in MIQ facilities would be negotiated with each hotel individually, and MBIE said this could include removal and any “make good costs.”
The same will apply to remedial ventilation work done to prevent spread of Covid-19 via air conditioning systems.
With vaccinated New Zealanders and other eligible international arrivals able to enter New Zealand without self-isolating, and international travel restarting, Covid-19 Response Minister Chris Hipkins on Thursday said by the end of June, 28 facilities would leave the MIQ network and return to being hotels.
“With New Zealand now reopening to the world without the requirement to isolate for most, there is a significantly reduced demand for MIQ. This of course means that we no longer need the number of facilities we currently have,” he said in a statement.
Remaining hotel contracts are due to run until June 30, and MBIE can terminate them earlier with 90 days notice. Rydges Auckland has already publicly announced it will quit MIQ at the end of April.
“A small number of hotels will remain part of the system while the Government works through what might be needed in terms of a national quarantine capacity in the future. This could include retaining hotels or purpose-built facilities,” Hipkins said.
If use is reduced within that notice period, MBIE is still required to pay for the full period, and it has set aside $136.2m to cover those non-cancellable leases.
Prime Minister Jacinda Ardern has indicated the Government wants to establish a National Quarantine Service with a dedicated workforce and purpose-designed facilities to cope with future pandemics, and MBIE has spent $500,000 on an investment case for building a custom facility or adapting existing hotels for the ongoing Covid-19 response and high-risk travellers.
The ministry refused to release an initial business case that went to Cabinet late last year.
This was on the grounds that the documents were closely connected to work currently underway, and right now it needed to protect the confidentiality of advice tendered by ministers and officials.
“However, these documents will be released in due course.”