University of Limerick (UL) staff expressed “multiple concerns very early on” regarding the controversial purchase of student housing at Rhebogue, while controls to properly regulate the transaction were “overridden”, the Public Accounts Committee (PAC) has heard.
UL delegates appeared before the committee on Thursday following revelations that the university paid significantly above the market price for a student housing project at Rhebogue, about 3km from the campus.
A report on the housing acquisition by the former chief of the Department of Social Protection found that, although the 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.
Speaking before the committee on Thursday, UL provost and deputy president Prof Shane Kilcommins said the director of management, planning and reporting raised concerns in March 2022, while the director of building and estates and the university solicitor also expressed concern about the purchase of 20 private homes for student housing.
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A question regarding valuation assumptions was also raised on March 23rd, 2022, and two external reports were submitted highlighting issues around the project, he said.
Prof Kilcommins said he expressed his own concerns the following year, in May 2023, following the university’s last PAC appearance, when he became aware of inconsistencies surrounding the project.
The university provost concluded “the real concern” was “controls in place were being overridden”.
Former Labour Party leader Alan Kelly said it was “utter madness” that between four to five people had raised concerns and yet “the project still goes on to the next step”.
“How does that happen without somebody at a very senior level going, ‘all these people have concerns, should we not really look at this?’” asked Mr Kelly.
He said it was “incredible” UL did not have a “checklist” when carrying out the Rhebogue transaction, and described a scenario “whereby there wasn’t checks and balances in place in relation to the original proposal, the valuation, the final purchase price, stamp duty, planning and also agreement to pay rent”.
Asked why UL’s governing authority never questioned the price increase from €10.9 million to €11.9 million, Prof Kilcommins said the costing had been presented in “a very unusual way” in that the rental cost was presented separately from the overall cost. The subsequent price discount of €540,000, as part of an agreement that a “balloon payment” be made “all at once”, was never brought before the governing authority, said Prof Kilcommins.
It also quickly emerged that the chief corporate officer, who had a “central role in negotiating” the Rhebogue housing deal, was not present at Thursday’s PAC hearing. PAC chair Brian Stanley noted that the same individual was not present at the May 2023 hearing because of “long-standing commitment and was unavoidably absent”.
Prof Kilcommins said that in May 2023, the chief corporate officer had requested that he speak about Rhebogue because “as the executive sponsor he didn’t want to come because there was an investigation ongoing into the transaction at that point”.
Prof Kilcommins said he only heard about the long-standing commitment during the PAC hearing and had been “told differently”. He added that his UL colleague attended delegation meetings the night before, the morning of and directly after the PAC meeting.
Asked if the chief corporate officer was in communication with staff during the 2023 PAC hearing, Prof Kilcommins was “of the understanding that he was texting members of the UL delegation during the meeting”.
Prof Kilcommins highlighted that the Rhebogue revelations had “had significant implications for the university” and a “demoralising impact” on staff and students. John Kelly, UL corporate secretary, said a number of “large companies with long associations with UL” had been in touch regarding whether their funds were put towards the Rhebogue acquisition and that the situation had created “a lot of disquiet among organisations that have networked with UL for many years”.
University chancellor and chair of the governing authority Prof Brigid Laffan, said she had requested an update on the controversial 2019 Dunnes Stores acquisition when she was appointed last year, but that she did not ask about Rhebogue “because I didn’t know about it”. Asked again by the Social Democrats’ Catherine Murphy whether she requested information on any other issues that could cause reputational damage to the university and her role as chancellor, Prof Laffan responded that “she genuinely” couldn’t remember.
Prof Laffan said she had “absolutely no doubt” the university would “recover and flourish, but not without change”. Asked if there would be consequences and a review of senior management following the revelations surrounding the Rhebogue acquisition, Prof Laffan said there would “certainly be changes and accountability”, but “as a matter of law” she could not answer the question on staffing changes.
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