Politics

University of Limerick student housing scheme went ahead despite concerns, PAC hears

Dáil committee told that ‘key information’ was not available before deal exceeding €11m was approved in 2022

UL chancellor Prof Brigid Laffan will appear before the Dáil Public Accounts Committee on Thursday along with provost Prof Shane Kilcommins. File photograph: Frank Miller

Arthur Beesley
Wed May 8 2024 - 19:29

The bungled student housing scheme at the centre of a crisis in University of Limerick (UL) went ahead despite “concerns and objections” being expressed to officials who backed the project, UL has told TDs.

In a statement to the Dáil Public Accounts Committee (PAC) for a Thursday hearing with UL, university provost and deputy president Prof Shane Kilcommins said “key information” was not available to its governing authority when it approved the disputed deal in the summer of 2022.

“There was, in effect, an override of management controls, and concerns expressed about this acquisition were not adequately considered,” he said.

At issue for the committee is a succession of serious governance failings that led UL to conclude it overpaid more than €5.2 million for 20 student homes, which were acquired at a cost exceeding €11 million.

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UL president Prof Kerstin Mey, who has been on sick leave since March, has acknowledged that the university paid “significantly above market price” for the properties at Rhebogue, about 3km from the main campus.

The PAC statement by Prof Kilcommins, who will appear before the committee with UL chancellor Prof Brigid Laffan, was circulated to all university staff on Wednesday.

“In late 2021, a representative of a developer approached the chief corporate officer (CCO) with a proposal which purported to help address the accommodation crisis,” he said.

“Rhebogue, which had planning permission for 20 houses, was offered as a potential solution and was considered potentially viable. The proposal involved the adaptation of the houses to maximise the number of bedrooms. The project sponsors were the CCO and the chief financial and performance officer (CFPO).”

[ Confidential report shows University of Limerick paid €1m more than price agreed for accommodation ]

Neither official was named in Prof Kilcommins’s statement. He continued: “Not everyone thought Rhebogue was a good idea, and they conveyed their concerns and objections to the project sponsors. Notwithstanding that, the sponsors progressed the project, ultimately to the governing authority for approval.”

The statement went on to say the project was unanimously approved after a presentation to the governing authority at a meeting on August 2nd, 2022.

“It has since come to light that key information necessary to enable the governing authority to make an informed decision was not provided, including vital particulars on planning risks, valuations and funding models,” he said.

“The governing authority was also given to understand that key individuals were part of the team and were fully supportive, but this was not the case.”

He added: “A planning warning notice has since been received outlining Limerick City and County Council’s views on the use of the houses as student accommodation. A reply was provided, and the matter is with An Bord Pleanála.

“After the deal concluded a stamp duty liability emerged. This increased the net cost of the houses, requiring UL to assess the ‘carrying value’ of the assets.

“The valuation is subject to sign-off by UL’s external auditors, but the indications are that it will result in a significant financial impairment, in the order of €5.225 million.”

Arthur Beesley

Arthur Beesley

Arthur Beesley is Current Affairs Editor of The Irish Times

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