Harney defends role of university governing body in controversial €8 million site deal

Former Tánaiste says governors were ‘horrified’ there was no written valuation

University of Limerick’s (UL) chancellor Mary Harney has defended the role of its governing authority in approving the controversial €8 million purchase of a site for a city centre campus.

The Dáil’s spending watchdog also heard how that two streams of State funding totalling €3.7 million have recently been withheld from UL over concerns about its financial governance.

However, former Tánaiste Ms Harney told the Public Accounts Committee (PAC) that the Higher Education Authority (HEA) has been impressed with reforms that have taken place and she hopes the money will be paid to UL "as quickly as possible because it does impact on our ability to make things happen."

Questions have been raised about the 2019 deal struck by UL to buy a former Dunnes Stores site in Limerick city centre for €8 million. A previous valuation of the site put its worth at €3 million.

Concerns

Concerns were raised by a UL employee and KMPG was hired by the university to do a review of the purchase. Its report was delivered last December.

PAC chairman Brian Stanley asked the UL representatives if the committee would be provided with the report. UL President Prof Kerstin Mey said she would like to share it with the PAC but lawyers have advised she could not do so due to a legal action brought by a former employee in the High Court.

Ms Harney - who has been the university's chancellor since 2018 - confirmed that she had not seen the KPMG review adding "nobody more than me would like to see this report published." But she said: "I can't expose the university to financial risk by ignoring our legal advice."

Mr Stanley said it is “intolerable” that the PAC has not been given the report and that the committee’s work is being impeded.

Enormous cost

Fianna Fáil TD Cormac Devlin raised the "enormous cost" of the site and and asked why it increased from a €3 million valuation previously done by Limerick City and County Council to the €8 million UL paid.

Ms Harney disputed that this is what happened. She said the valuation for the local authority was for the purposes of declaring the site derelict and buying it through compulsory purchase order. It was a “desktop” exercise that did not take into account the planning potential for the site. She later said that as a result the €3 million figure can’t be compared to €8 million cost and “it wouldn’t be fair or right to do so.”

Ms Harney said that in 2013 or 2014 UL decided it should have a city centre campus and it identified the Dunnes location as the “preferred site” She said Dunnes were not interested in selling at the time but in 2019 the retail giant approached UL to see if it still wanted to buy it. Ms Harney said Dunnes looked for €10 million and UL offered €6.5 million and negotiations led to a deal for €8 million. She said there was a unanimous decision by the governing authority to approve the deal and “great enthusiasm” about it.

She added: “We were told that valuation papers were tabled in the negotiations and we made our decision based on the information before us.”

It later transpired after a Freedom of Information request that there was no written valuation report. Ms Harney said “we were horrified as governors” and “that’s why we sought an independent enquiry.”

She said the plan for a city campus is “a really good story” but with the knowledge that there wasn’t a written valuation “it has been dogged in controversy... and I regret that very, very much as do my colleagues.”

She said there may have been what she described as an “oral valuation” of the site but it had been the governing authority’s understanding that a written valuation had been tabled.

Mr Stanley challenged Ms Harney on whether a second or third valuation had been sought by the governing authority.

In her response Ms Harney cited her experience in Cabinet saying ministers bringing proposals for acquiring properties rely on the documentation provided by their staff. She said: “As a Governing body we are not executives, we rely on the professional people that serve us and we based our decision based on what they put before us.” Ms Harney added: “There may be learnings from this deputy.”

Mr Stanley suggested the lesson is to ask to see at least two valuations. Ms Harney replied: “There may have been a number of valuations. The issue remains this is an iconic riverside site. It didn’t go on the open market and if it did I’m advised it might have gone for a lot more.”

Cormac McQuinn

Cormac McQuinn

Cormac McQuinn is a Political Correspondent at The Irish Times

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