UOW paid A$442.6m to exit student housing deal, Mercury reports

Why it matters

The Mercury reports that the full payment came to light through a council document tendered to the Independent Commission Against Corruption’s Operation Scandi investigation. The Mercury quotes Macquarie University accounting professor James Guthrie calling it the first public exposure of the whole figure.

Professor Guthrie told the paper that reporting smaller segments of the payment was allowed under accrual accounting methods. The university says its approach follows accounting standards.

The numbers

According to the Mercury, the termination ended a 2014 public-private partnership with the Living & Learning Partners consortium. The newspaper reports that UOW borrowed A$350 million to fund the payment.

The Mercury also reports that occupancy guarantees in the arrangement left the university facing penalties of about A$8 million a year after COVID-19 border closures cut student numbers.

The university’s position, as reported, is that the A$169 million figure came from subtracting the value of assets returned to university ownership from the full payment. The Mercury says the full A$442.6 million did not appear in the 2020 annual report or any since. We have not reconciled the two figures.

What’s next

The Mercury reports that UOW disputes that the deal was the largest contributor to its financial troubles, and says the termination was the better financial option than continuing the partnership.

Dr Sarah Kaine, a state Upper House MP who led a parliamentary review of universities, is reported as telling parliament on 13 October that the fallout from the partnership has contributed to the university’s ongoing financial instability. The two positions are directly at odds, and the Mercury article does not resolve them.

What the Operation Scandi inquiry makes of the arrangement is not stated in the report we have read, and we do not speculate on it here. Readers should treat the figures as the Mercury’s reporting until the university or the commission publishes them in full.

Our earlier Wollongong coverage includes a CBD apartment tower report. Until the university or the commission publishes the figures in full, the A$442.6 million total rests on the Mercury’s report.