UCD Confucius centre project runs another €2m over budget

The University College Dublin (UCD) Confucius Centre, a building part-funded by the Chinese Government, has now run €4.8 million over budget, following a recent €2 million increase in costs.

At a meeting of the university's governing authority, it was revealed the project would require an additional €2 million, following a dispute with the construction contractors Glenman Corporation.

UCD president Andrew Deeks previously expressed concerns that delays in the project could cause a "diplomatic incident" with China. The three-storey temple style building was originally planned to be completed by September 2016, but now will not be finished and fitted out until 2018. The building will house the university's Confucius Institute, which teaches Chinese culture and language courses.

Documents from an internal UCD capital projects committee meeting outline that the contractor made 'significant claims' for additional fees after building work began

In April 2016 an appeal for an additional €2.5 million for the project from UCD president Andrew Deeks to the Department of Education was rejected, after the lowest bid for the construction contract came in at €10.2 million, significantly higher than the €7.4 million budget. The recent increase brings the estimated cost to €12.2 million.

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‘Significant claims’

Documents from an internal UCD capital projects committee meeting in September 2016 outline the contractor made “significant claims” for additional fees after building work began. The documents were recently obtained under the Freedom of Information Act.

Following a conciliation process between UCD and the contractor, an additional fee of €1.2 million was agreed. The conciliation process and legal fees cost UCD €450,000, and the university also allocated €350,000 for additional site attendance and inspections, according to a source on the university’s governing authority.

The additional €2 million in funding was approved at the governing authority meeting last month. Documents from the meeting state that "a final account has yet to be agreed with Glenman and the risk of further claims/disputes remains", The Irish Times understands.

Avoided

Several sources in the confidential meeting said members questioned the university management over the second substantial increase in the costs of the project, and discussed how a similar situation could be avoided in the future.

In an agreement signed by Prof Deeks in 2014, the Chinese and the Irish governments agreed to pay €3 million each towards the building’s costs. UCD agreed to pay the remaining €1.4 million, and to cover any additional rise in the project’s cost. The university’s contribution to date has increased to €6.2 million.

In a letter to Department of Education general secretary Seán Ó Foghlú in April 2016, Mr Deeks said the project was "receiving considerable scrutiny at the highest levels of the Chinese government".

The building is being constructed near the centre of the Belfield campus, and is the first purpose-built centre to house a Confucius Institute, and the first to receive direct capital funding from the Chinese government.

When asked what the contractor’s claim for additional fees related to, a spokesman for UCD said: “The university cannot comment on ongoing projects as they are commercially sensitive.”