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UCD Left To Pay €3 Million Overrun of Confucius Centre to “Avoid a Diplomatic Incident” with China

The cost of building the new Confucius Centre in UCD has risen from the initial estimated cost of €7.4 million up to €10.2 million. The college’s bill for the construction costs has now increased from €1.4 million to €4.1 million.

It can be revealed UCD President Andrew Deeks on the 8th of April this year, sent a letter to the Department of Education, seeking an urgent extra €2.5 million for the project. Writing to the Department secretary general Sean Ó’Foghlú, President Deeks claimed that UCD had already committed to the Confucius Institute Headquarters that the building would be finished by September 2016, and so the college “had no option but to proceed in order to avoid a diplomatic incident.”

UCD had already committed to the Confucius Institute Headquarters that the building would be finished by September 2016, and so the college “had no option but to proceed in order to avoid a diplomatic incident”.

UCD agreed to build the Confucius Centre on campus back in 2013 as a purpose-built ‘temple style’ building to house the UCD Confucius Institute, which was set up back in 2006. The deal negotiated was that the Chinese government would pay €3 million towards the Centre’s construction. The Irish Higher Education Authority and Department of Education also agreed to match China’s contribution at €3 million.

In a supplementary Agreement signed in 2014 by college President Andrew Deeks, UCD agreed to put in the final €1.4 million towards the then estimated €7.4 million building project. At the time UCD claimed they would raise the €1.4 million from a combination of “fundraising activities and its own resources.”

However, in January this year when the college received bids from six construction companies for the the contract to build the Centre, the estimated cost of the lowest one from construction corporation Glenman Ltd. was €10.2 million.

President Deeks stated that although the “significantly increased project cost was unexpected” the college had no option but to proceed to construction.

According to confidential documentation from UCD’s Governing Authority (obtained under the Freedom of Information Act) the college requested an urgent increase in authorised expenditure for the Centre from €6.9 million to €10.2 million “to allow the project proceed to construction”.

The Confucius Centre is being built beside the current Engineering building in Belfield, to house the UCD Confucius Institute. The Institute is one of hundreds promoted by China in universities around the world, to teach and spread awareness of Chinese culture and practices, and run Chinese language courses. The Confucius Institute is currently in a small building beside student Merville residencies.

It is believed UCD approached the Confucius Institute HQ, Hanban in January 2016 when they learnt of the significant increase in construction costs, but it was reiterated that the Chinese government’s “financial contribution was capped.” In one of the original agreements between UCD and Hanban signed in October 2014, article II states that “UCD will be liable to pay any additional sums over and above the Total Estimated Cost should the actual costs of the development exceed the Total Estimated Cost.”

In President Deeks’ letter to the Department of Education he stated recent meetings with the CI Headquarters “have generated disappointment” due to the complications and delays. The Centre in UCD is to be the first in the world to receive direct funding from the Chinese government for a purpose built Confucius ‘Centre’. As such President Deeks outlined that Hanban “have repeatedly emphasised that the project is receiving considerable scrutiny at the highest levels of the Chinese Government.”

“They have repeatedly emphasised that the project is receiving considerable scrutiny at the highest levels of the Chinese Government”

President Deeks asked the Department of Education in his letter this April if they “would consider increasing the Irish Government’s contribution to the project by €2.5 million”. But this plea was rejected by the Department. On April 14th Sean Ó’Foghlú, Department secretary general replied to say “we are not favourably disposed towards funding a project” in which “the costs were significantly above the initial budget agreed with the Department and the HEA.”

Ó’Foghlú also outlined to the university President that in the Higher Education Authority’s approval letter for the project in 2014 it was made clear “that no additional exchequer funding will be made available to fund the cost of this project” above the initial €3 million, and “nothing in your letter changes our perspective on this.”

The fruitless results of the UCD President’s urgent negotiations with both Hanban in China, and the Irish Department of Education will mean UCD are left to cover the entire overrun of the project, bringing their total bill to €4.1 million.

UCD are left to cover the entire overrun of the project, bringing their total bill to €4.1 million

The funding problems of the constructing works for UCD have been compounded by the failure to leverage any significant fundraising or philanthropic contributions towards the Confucius Centre. It can be revealed out of the €1.4 million the university had planned to fund mainly from philanthropic donations, to date they only have €110,000 committed. President Deeks claimed despite “significant effort put into philanthropic fundraising, changes in the Chinese regulatory and economic situation over the last year or so has led to a certain disillusionment amongst potential donors.”

“Out of the €1.4 million the university had planned to fund mainly from philanthropic donations, to date they only have €110,000 committed”

UCD appeared to have anticipated some moderate inflation in the construction costs of building the Confucius Centre. Documentation from the university’s Capital Projects Group meeting on December 14th 2015, show they had revised the expected total cost of the project from €7.6 to €8.2 million.

Further documentation from a meeting of the UCD Governing Authority on the 22nd of March 2016 illuminate the apparent reasons behind the hike in construction costs. The head of UCD’s finances, Busar Gerry O’Brien stated at the meeting that the “increased cost was due to inflation in the construction in sector; a prolonged wait for the issuing [of a] fire-safety certificate; and the integration of some design changes.” The minutes reveal that “members [of the Governing Authority] expressed concern at the increased expenditure” but ultimately approved the funding.

It can be confirmed there was a six-month delay in obtaining a fire safety certificate from Dun Laoghaire-Rathdown county council for the Centre, and to obtain the certificate certain design changes were required, which resulted in an increased construction cost. There was also a more extensive service diversion of underground gas, power, and water supply lines     required to clear the site for construction than previously expected.

Controversially the Director General of Hanban, Madam Xu Lin did not attend the 10-year anniversary of the UCD Confucius Institute this September in Belfield. But sent a letter of congratulations to be read out instead. The unveiling ceremony of the new Confucius Centre was supposed to be made alongside the UCD Institute’s 10 year celebrations, but it is still not completed.

“Controversially the Director General of Hanban, Madam Xu Lin did not attend the 10-year anniversary of the UCD Confucius Institute this September”.

In UCD’s negotiations regarding the ownership of the new building it was agreed with Hanban Headquarters in 2014 that “UCD will own the building … and guarantees its free use as the [Confucius] Institute for 50 years.” The document continues to stipulate that “if UCD ceased the operation of the Institute then it would return the balance of the [€3 million] contribution made by the Confucius Institute headquarters … at a rate of €60,000 per annum” for each year remaining on the lease.

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Jack Power  |   Editor

 

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