MTU set to begin repaying €5m emergency loan

IT Tralee was granted the emergency loan in 2019 to assist with serious cash flow difficulties and, from next May, MTU will start repaying €250,000 per annum over 20 years 

The 2019 loan was granted to IT Tralee which has since merged with Cork Institute of Technology to form Munster Technological University. File picture: Domnick Walsh

Munster Technological University (MTU) is to start repaying the €5m emergency loan it received from Government from next May.

The technological university is to pay back the loan, granted to the Institute of Technology, Tralee in 2019 to assist with its serious cash flow difficulties, over a 20-year period at €250,000 per annum.

Details of the repayment terms agreed with the Department of Further and Higher Education are included in the latest financial statements published by the Higher Education Authority (HEA).

MTU was officially granted Technological University status in 2020 after the project spent years in planning and experienced several setbacks along the way.

The project saw the former Cork Institute of Technology (CIT) and the Institute of Technology, Tralee (IT Tralee) merge and become MTU as of January 1, 2021.

Plans to combine the two institutions were initially met with resistance, with the Teachers' Union of Ireland (TUI), representing staff at both institutions, fearing the merger could lead to job losses and rationalisation.

Prior to the merger, IT Tralee had been experiencing significant cashflow issues. In 2019, an international panel of experts expressed concerns over the viability of the project due to the reported financial concerns at IT Tralee. 

Figures provided to the public accounts committee showed that the institute was €1.8m overdrawn at the end of 2016. Fears were raised that this could have risen to €10m to €21m in a worst-case scenario.

Speaking in the Dáil earlier this year, Further and Higher Education Minister Simon Harris said serious cash-flow difficulties had emerged in IT Tralee, and it needed additional funding and a series of cost-saving measures to ensure its sustainable future. 

"The once-off and repayable funding was provided in 2019 to ensure immediate stability of the college and predicated on the completion of the financial sustainability plan for the college." 

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"The provision of emergency funding was essential to maintain current services at the institute." 

The HEA approved its sustainability plan, prepared with assistance from Deloitte, he added. 

This plan included actions to reduce the cost base and increase income including from additional apprenticeship blocks, increasing student numbers, and lifelong learning course uptake.