€427,000 written off by college after planned student accommodation complex abandoned

Atlantic Technological University has put the €18m project on hold amid concerns over cost inflation and supply chain risks

Despite the previous stoppage of the project, ATU has said the future development of the accommodation in Galway remains under "active consideration", with planning permission sought and granted in 2024. File picture

Almost €430,000 worth of capital spending was written off by Atlantic Technological University (ATU), after the college opted not to proceed with the development of a new student accommodation complex.

A total of €427,000 was spent by ATU on design, planning and professional fees during the development phase for new student accommodation on its Galway campus.

There was €42,353 spent on planning, feasibility and technical assessments, while €168,789 was spent on architectural, engineering and quantity surveying services.

The remaining €215,696 spent had been previously capitalised by the university, with it going towards general project development and design costs.

Despite the university receiving planning permission for the student accommodation centre, the project itself was put on hold amid concerns about the overall cost of the development.

"A decision was taken by the Governing Body in December 2022 not to proceed with the project at that time, following a reassessment of increased cost, associated delivery and financial risks and capital prioritisation," the university wrote, in correspondence to the Public Accounts Committee (PAC).

"This did not and does not alter the underlying strategic need for the development, and the project remains under active consideration as part of the University’s capital programme."

Documents provided to the PAC show the projected cost of the project had increased to €18m, which was inclusive of construction, professional fees and other ancillary costs.

"Having considered the financial implications, competing capital priorities and the requirement to progress works within a defined planning permission timeframe, the Governing Body determined that it would not be prudent to proceed at that time and agreed to reassess the project."

They cited cost inflation and supply chain risks stemming from the covid-19 pandemic and the war in Ukraine as reasons the project opted to not go ahead.

Despite the previous stoppage of the project, ATU has said the future development of the accommodation in Galway remains under "active consideration", with planning permission sought and granted in 2024.

The previous planning permission for the development expired in June 2023.

"Further evaluation has been undertaken that included consideration of the brief, location, design and delivery approach, to ensure that the project still meets the strategic needs and objectives for the university and can be progressed in the future on a sustainable basis, provides value for money and aligns with institutional priorities," ATU told the PAC.

"The design and preparatory work undertaken will inform the development of the future project, particularly where alignment exists in terms of the site, scope or configuration, thereby supporting more efficient progression of any revised proposal."

PAC member Aidan Farrelly said there were questions to be asked of ATU over the spending on the student accommodation project.

"It's a huge amount of money. And you're telling me that only when you've finished all that and you've spent all that, that then suddenly it becomes financially unviable to proceed," Mr Farrelly said.

However, Mr Farrelly said from a "prudence perspective", the college may have made the best decision by opting to step away from the project amid concerns of the inflated final cost.

He added the costs outlined by the college on design and feasibility seemed "quite high".

Mr Farrelly said it was also unlikely the project was viable in 2022 and it would be unviable now in 2026, given the ongoing war in Iran and rising costs.