University of Limerick lacked “correct and clear” information on the cost of a botched student housing project before pressing ahead with a €11.9 million deal in which it paid “significantly above” market price, according to a damning report that raises new questions about the transaction.
The report by former civil servant Niamh O’Donoghue found the cost structure presented to UL leaders was not “clear and consistent” with the August 2022 contract.
Although UL’s governing authority agreed to pay €10.9 million, the price rose by €1.08 million in the final contract signed only nine days later.
The increase was attributed to a rent arrangement that was not mentioned in the contract. The price was later discounted by €540,000 after a “take it or leave it” proposal from the developer.
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The first decision point was a “special” UL executive meeting in March 2022, which UL’s president, deputy-president and provost did not attend.
“Despite this, the draft minutes record that the executive agreed that the proposal should be forwarded to the [finance, human resources and asset management committee] and [governing authority] for approval.”
The report by Ms O’Donoghue, former chief of the Department of Social Protection, will be discussed when UL leaders go before the Dáil public accounts committee tomorrow.
The Higher Education Authority, UL’s regulator, separately raised concerns about the price.
“It appears there is a discrepancy between the purchase price the governing authority understood they approved (August 3rd, 2022) and the contract price agreed between UL and the vendor (contract signed August 12th, 2022),” HEA chief Dr Alan Wall said in a March letter to UL chancellor Prof Brigid Laffan.
The HEA, which declined to comment on the letter, has initiated a statutory review of UL affairs, including conflict of interest issues.
Ms O’Donoghue said actions taken on foot of planning advice and following a planning notice were not consistent with good governance. The scheme is “unauthorised” for students, Limerick planners said in March.
The deal came about after the developer, Silvergrove, contacted UL in 2021 about the project at Rhebogue, about 3km from the UL campus.
Rhebogue had planning permission for 58 beds in 20 units but Silvergrove proposed 80 beds “and it was asserted” that the development planning compliant.
The developer’s planning adviser said there were “no impediments” but did not reference the increase in bed spaces. However, UL’s planning adviser said “a new planning permission” would be needed.
“The advice provided by the adviser commissioned by the university was sent to the adviser commissioned by the developer. He submitted a second letter of advice, firmly rebutting the points made by the UL adviser.”
A June 2022 warning notice from Limerick planners was not brought to UL’s executive in July or the August 3rd governing authority meeting.
Asked about the findings, UL cited the HEA review. “UL takes these issues seriously and until these reviews are completed, it would not be appropriate to comment.”
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