Higher education authorities are facing questions over how a proposed student accommodation project at Dublin City University (DCU) reached a point where almost €4.5 million in professional fees were written off without a single student bed being delivered.
DCU wrote off €4.38 million in professional fees for the proposed accommodation project after deciding not to proceed with the development because no funding solution was available to meet the high construction costs.
The issue has now come under scrutiny at the Dáil Public Accounts Committee, where concerns were raised about how the project was handled and the funding arrangements surrounding it.
DCU had planning permission for 1,235 beds
DCU secured planning permission in 2019 for a 1,235-bed student accommodation development on its Glasnevin campus.
The project was subsequently affected by the Covid-19 pandemic and a significant increase in construction costs.
The first phase received Government grant funding for 405 beds under the short-term activation programme in 2023, and the project was approved to proceed to tender.
However, the development ultimately failed to move into construction.
Questions over Government funding
Sinn Féin TD and Public Accounts Committee chairman John Brady told the committee that he understood the Department of Further and Higher Education had asked DCU to scale back the project to make provision for around 400 students.
He said this had contributed to an increase in the cost of the development.
Mr Brady described the €4.38 million write-off as unacceptable given the pressure students face finding accommodation and called for a full explanation from both the department and DCU.
The comments come against a backdrop of continuing pressure on student accommodation, with students facing difficulties finding affordable places to live close to third-level institutions.
Why DCU abandoned the project
DCU said it had to make a decision on the project last October because there was no funding solution that would allow it to proceed to delivery given the level of construction costs returned through the tender process.
The university said proceeding would have resulted in unsustainably high rental rates for students living in the new accommodation.
DCU said the expenditure accumulated during the development process included architectural design fees, planning application costs and the costs of two tender processes.
Additional redesign work was also required to ensure the accommodation complied with updated building regulations.
Planning permission remains in place
The university said planning permission for the development on its Glasnevin campus remains in place until 2029.
DCU also submitted the project to the Higher Education Institutions Student Accommodation Programme last May and said it continues to work with stakeholders to find a viable and affordable model for delivering the accommodation.
This means the site still has planning permission, but the original project has not proceeded to construction.
Department says construction costs raised value-for-money concerns
The Department of Further and Higher Education said DCU had received approval in principle for support for a 405-bed student accommodation project, subject to value-for-money considerations.
According to the department, the procurement and tendering process subsequently resulted in significant construction cost escalation.
The tendered costs raised concerns about value for money and a decision was therefore taken not to progress the project.
The department also said rental charges are a matter for the individual higher education institution and are influenced by factors including development, financing and operating costs.
PAC members seek further answers
Labour TD for Cork North Central and PAC member Eoghan Kenny said he intends to ask committee colleagues to examine the issue further.
He said questions remain about how the project reached this point while students continue to struggle to secure accommodation, with some travelling long distances or facing significant costs for third-level accommodation.
Mr Kenny said the committee should establish who authorised the expenditure, what oversight was in place, why the development did not proceed and whether any of the money can ultimately be recovered.
What happens next?
The project remains under scrutiny by members of the Public Accounts Committee, while DCU continues to work with stakeholders on a possible delivery model.
With planning permission remaining in place until 2029, the university has not ruled out finding another way to deliver student accommodation on the site.
The wider issue is also likely to remain under examination as pressure continues on student accommodation and questions are raised about the public money already spent on projects that do not reach construction.
Source: Irish Examiner
