Dublin City University (DCU) has planning permission until March 2029 to build accommodation housing 1,235 beds, but a “viability gap” is preventing the construction from proceeding, an Oireachtas committee has heard.
The university faced questions on Wednesday on its writing off expenditure amounting to €4.38 million (including VAT) incurred on professional fees for the proposed project, as reported in its financial statement for 2024/2025.
Dr Declan Raftery, DCU’s chief operations officer, said in 2017, the university commenced a capital project to construct 1,235 new student beds on its Glasnevin campus. The project was due to go to tender in September 2020 but “the Covid-19 pandemic changed everything for all of us”.
He noted that by March 2020, the DCU student accommodation project had incurred 69 per cent of the €4.38 million, as the project was “proceeding according to plan”.
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He said another €700,000 was spent in 2020.
“We re-scoped the original project from 1,235 beds into a first phase consisting of 405 beds and completed two procurement competitions to try and seek best value for money.
“However, we have not been able to bridge the viability gap between the cost of construction, capital grant support from Government and the resulting rental levels that we believe by any reasonable measure students could afford to pay.”
He told the committee that DCU is “disappointed and frustrated”.
After coming out of Covid, “we hit unprecedented inflation and supply chain issues that none of us expected or could understand”, he said. “We were chasing inflation.”
Raftery was addressing the Joint Committee on Further and Higher Education, Research, Innovation and Science. On Wednesday, it heard from representatives from DCU, University of Limerick, University of Galway, Munster Technological University and Technological University Dublin on the National Student Accommodation Strategy.
People Before Profit-Solidarity TD Richard Boyd Barrett asked Raftery if there was a viable financial model that would allow DCU to progress the 1,235 beds, but it could not be done unless the Government stepped in to help the university bridge the viability gap and deliver genuinely affordable accommodation.
Raftery responded: “Exactly ... can’t put it any better myself.”
When asked if the €4.38 million that DCU had written off could be salvaged to deliver the student accommodation, Raftery said “a large portion of it” could be.
He said the €4.38 million included costs such as integrated design team fees, a project manager, some surveys and “a tiny amount” of legal fees.
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“The capital grant aid available from the department, as far as they thought they could go at that time and the gap between what we thought we needed was €6.7 million. That was the gap we couldn’t bridge.
“What can students afford to pay versus the cost? The gap then is either tax incentives, capital grants ... there is still a viability gap.”
He added that the “pressures are everywhere in terms of cost of living”, citing students who choose to commute as they can’t get accommodation and have part-time jobs “to try and make ends meet”.
