Headaches for Uclan over foreign campuses

Thailand, Cyprus and Sri Lanka initiatives bring fiscal losses and criticism

January 2, 2014

Source: Getty

Global game: in considering its campuses overseas, Uclan’s board was ‘fully aware of the risks and was satisfied any monies invested would not put the university at risk’

Last year was not a vintage year for the University of Central Lancashire’s attempts to gain a foothold in overseas markets.

In November it emerged that it will lose up to £3.2 million in the collapse of its planned Thailand campus. The university set up a joint venture company with the president of a Thai duty-free storage company that would own and run the campus, which was to open later this year. But the joint venture failed to complete the purchase of all the land needed after its partner’s “circumstances changed”.

In the same month, Uclan won praise from UK foreign secretary William Hague over its plans for expansion into Sri Lanka, where the government has given the go-ahead for it to be the first overseas university to open a campus in South Asia.

Accusations of war crimes have been levelled against the Sri Lankan government after up to 40,000 people were killed during the brutal conclusion of the country’s civil war in 2009. Uclan praises the government’s “commitment to engage” with the United Nations Human Rights Council “in a spirit of openness and constructive dialogue”. But Amnesty International UK told Times Higher Education that Uclan should “take note of the country’s appalling human rights record”.

Both these episodes came just months after it emerged that Uclan’s Cyprus campus was criticised as a security risk by the UN secretary general, Ban Ki-Moon, who was concerned by the campus’ location in the buffer zone separating the island’s Greek and Turkish communities.

Uclan, which opened the campus in October 2012, has also been under pressure to prove that Cyprus is a fertile ground for student recruitment; the University of East London was forced to close its Cyprus campus in 2013 after recruiting just 17 students.

Reputational risk warning

With UK universities increasingly looking to expand overseas, some believe that Uclan’s dealings raise important questions for higher education as a whole.

Sally Hunt, the University and College Union general secretary, said: “Uclan’s sorry episode in Thailand should be a wake-up call to everyone in the sector. UK universities’ overseas adventures are placing their funds, asset bases and reputations at risk. To avoid this, universities need to come clean about their overseas projects and open them up to proper public scrutiny and regulation.”

On Thailand, Uclan’s 2011-12 accounts, published a year ago, explain that some of the land for the campus had been bought outright and the rest secured with a 30 per cent deposit. It appears from the accounts that the project – a joint venture with Thai businessman Sittichai Charoenkajonkul in which Uclan holds a 49 per cent stake – ran into trouble trying to secure the portion of the land secured by deposit.

“The partner’s circumstances have now changed and restructuring negotiations are currently underway,” the accounts state in an enigmatic passage on the Thai dealings that came before the final collapse of the project.

In general, Uclan said in a statement, in considering its overseas campuses, its board was “fully aware of the risks and was satisfied any monies invested would not put the university at risk. It was also satisfied that any monies invested would not be from UK public sources.”

In Uclan’s complex corporate structure, the overseas ventures – Uclan Cyprus Limited, Uclan Lanka (Private) Limited and Uclan (Thailand) Company Limited – are all subsidiaries of Uclan (Overseas) Limited. The 2011 Uclan (Overseas) accounts show a sudden £9.3 million increase in cash deposits compared with the previous year.

Asked what the source of this funding was, and whether it was public funding in some form, a Uclan spokesman said: “The money came direct from Uclan and was built up from other overseas activities (in China) over several years.”

Uclan’s corporate plan, updated for 2013-14, explains the broader thinking behind the overseas ventures.

“Over the next five years, we expect to see some decrease in full-time undergraduate numbers on UK campuses,” says the plan.

As part of its aim of balancing out the fall in UK students, Uclan forecasts: “The number of overseas students studying on Uclan or partner institution campuses abroad will rise, assisted by the development of Uclan joint venture campuses in Cyprus, Thailand and Sri Lanka, moving to greater levels of in-country teaching.”

Last year, Uclan also signalled the importance of its overseas campuses by moving to a “group structure”, in which the international offshoots are managed separately from the UK campus – with all campuses under the overall leadership of Malcolm McVicar, formerly vice-chancellor and now group chief executive.

But one obvious question is why Uclan chose overseas campus locations that are all, in different ways, problematic.

In the case of Sri Lanka, there are potential advantages in working with a government that is eager for foreign investment. According to Sri Lankan press reports, the Uclan campus, to open in 2015 in a “free investment zone” for education, will enjoy a 15-year corporate income tax holiday.

Uclan said in its statement that although Sri Lanka “has had a turbulent recent history, the country has stabilised and is making significant progress…While much has been done in terms of domestic reconciliation, peace consolidation and economic development, it is the growth of the country’s higher education infrastructure which can play a pivotal role in the future.”

However, Allan Hogarth, head of policy and government affairs at Amnesty International UK, said Uclan “should look beyond the Sri Lankan government’s spin and take note of the country’s appalling human rights record”.

“Amnesty disputes the depiction of Sri Lanka as a country where ‘reconciliation, peace and progress’ abound,” he said.

Mr Hogarth added of the government’s record: “There has been a consistent failure to address the atrocities that took place at the end of the war where civilians were deliberately targeted, and hospitals shelled…Today in Sri Lanka, far from the progress the government attempts to portray, there is a continued move to silence critics and consolidate power.”

UN questions Cyprus undertaking

In Cyprus, the UN is still concerned about the positioning of Uclan’s campus in the buffer zone. “Talks are ongoing but the construction remains unauthorised,” said a spokesman for the UN’s peacekeeping force in Cyprus.

The campus is owned by a joint venture company in which Uclan holds a 51 per cent stake; the rest is owned by a group connected with a Cypriot developer, Hassapis Group.

Sources have raised questions about who runs the campus on a day-to-day basis and how much influence the developer has in the management of the site.

Lee Chatfield, rector of Uclan’s Cyprus campus, left in October. Uclan said his two-year secondment had come to an end and he was now retiring. His replacement, Melinda Tan, was previously head of the School of Languages and International Studies at Uclan in the UK. Sources suggested to THE that Dr Tan is the only UK academic permanently based at the Cyprus campus. However, Uclan rejected this claim.

Uclan said its original plan “projected that the campus would break even in year three, and losses were anticipated in the early years of its development”, and that 338 students are now enrolled.

john.morgan@tsleducation.com

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