Govt breaks silence on UNSW money
$32m in loans and grants came to nought after university's U-turns on enrolment, campus building
Lee U-Wen
THE Government has revealed for the first time that it had dispensed over $32 million in public funds to the failed University of New South Wales (UNSW) Asia project.
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This amount comprises $17.3 million in grants and $15 million in loans, Trade and Industry Minister Lim Hng Kiang said in Parliament yesterday.
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Until now, the Government had kept mum on the amount of money that it had dispensed to UNSW, which in May announced its sudden decision to pull out of Singapore due to poor enrolment numbers.
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Giving the breakdown, Mr Lim explained that the $17.3 million was to help UNSW build its 20-ha campus in Changi.
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The Economic Development Board (EDB) is now trying to recover this amount.
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"As UNSW will not be able to meet the performance indicators it had committed to the EDB, it is required to return the disbursed grant and loans," he said. The $15-million loan, meanwhile, went towards constructing the campus as well, but this was backed by a bank guarantee.
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Mr Lim's speech also painted a distinct picture of how UNSW's plans came undone from June last year, after current vice-chancellor Fred Hilmer replaced his predecessor, Professor Mark Wainwright.
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The first support package was accepted by UNSW under the leadership of Prof Wainwright in February 2005, on the basis that UNSW would begin operations at an interim campus and eventually set up a full university here with a targeted student body of 15,000.
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But once Prof Wainwright left, Mr Lim recounted how UNSW, with Prof Hilmer at the forefront, had approached EDB to "increase the support package".
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Prof Hilmer called the original package "inadequate", which led to the EDB proposing a beefed-up package on three conditions: UNSW had to commit to a 10-year student enrolment of about 5,000 students; accelerate the building of the campus; and introduce more R&D activities.
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Both parties agreed to this arrangement, with Prof Hilmer signing off on an undisclosed revised package last December. But when student numbers did not meet its projections, UNSW proposed a "significantly scaled-down" plan of achieving an enrolment of 2,000 students in 10 years, said Mr Lim.
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"This was half of what UNSW had agreed to in the December 2006 revised package. Moreover, they could not provide assurance that there would be a permanent campus in Singapore, even on a reduced scale. This called into question UNSW's ability to deliver on its original intent of getting 10,000 to 15,000 students at a steady state," Mr Lim said.
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After several counter offers, the Government was prepared to give UNSW a two-year period, until April 2009, to decide on its plans to develop its Changi campus.
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"The EDB offered not to claw back the grants and loans that it had disbursed ... if UNSW agreed to carry on operations and meet a set of interim targets until it made its decision," said Mr Lim. "The EDB offered that if, and when, UNSW submitted its campus proposal, EDB would assess the proposal afresh for a support package."
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Eventually, UNSW still chose to pull the plug three months into its first semester due to an "unacceptable level of financial and operational risk", he said.
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Expressing regret on the failed project, Mr Lim said: "This is their business decision, and we have to respect it. While we, as the Government, can play a role by giving support to investors to set up in Singapore, we cannot issue a blank cheque."
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Ang Mo Kio GRC MP Inderjit Singh asked if the EDB had been realistic in expecting a foreign university to achieve such lofty student enrolment targets. In response, Mr Lim said it was "not the Government's job" to evaluate the business plans of investors.
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"Investors know their businesses better than the Government. In this case, UNSW is in the best position to assess the viability of its business plan. Our role is to facilitate and support these decisions, not to second-guess or guide them," he said.