Question No 252 of Notice Paper No. 153 of 2007

Question No 253 of Notice Paper No. 153 of 2007

Question:
To ask the Minister for Trade and Industry (a) how does the pullout of the University of New South Wales Asia affect Singapore as an education hub;(b) what were the considerations that led to this pullout; and (c) how much of this can be attributed to the expectations of the Economic Development Board in terms of student enrolment.

Question No 256 of Notice Paper No. 154 of 2007

Question No 264 of Notice Paper No. 158 of 2007

Question No. 291 of Notice Paper No. 177 of 2007

Question No 292 of Notice Paper No. 177 of 2007

Let me first give the background of the UNSW project. After one-and-a-half years of feasibility study, UNSW assessed in 2004 that it was viable to establish a private comprehensive university in Singapore. This meant that the university would offer a full range of programmes, in Science & Technology, Business, Arts and Social Sciences, and at both the undergraduate and postgraduate levels. UNSW submitted its formal proposal to EDB in July 2004. Following discussions, EDB agreed to support UNSW’s proposal. 

When UNSW accepted EDB’s support package in February 2005, it was on the basis that although UNSW would start off at an interim campus, it would eventually set up a new university here and enroll 10,000 to 15,000 students at the steady state. EDB saw a new campus as a clear demonstration of UNSW’s commitment to the Singapore project, thus providing a good basis for its funding support. The acceptance of the EDB support package was signed off by the then Vice-Chancellor of UNSW, Professor Mark Wainwright.

Following the appointment of Professor Fred Hilmer as Vice-Chancellor of UNSW in June 2006, UNSW approached EDB to increase the support package. Professor Hilmer considered as inadequate the previous package which UNSW had agreed to. In August 2006, EDB agreed to increase the support package in return for UNSW’s commitment to a ten year student enrolment target of close to 5,000 students, the acceleration of the development of a new campus at Changi and additional R&D activities. In December 2006, Professor Hilmer signed off on the increased support package. UNSW proceeded to invite and accept student applications to the Singapore campus for its first intake in March 2007. It also continued to build up its staff strength.

But in March this year, UNSW found that the first intake for UNSW Asia was far below its expectations. It had enrolled only about 150 students, less than half of its business plans’ projected intake of 300 students. UNSW also expected the second intake to be significantly below earlier projections. UNSW thus reviewed its operations in Singapore again, holding extensive discussions with EDB.

UNSW eventually proposed a significantly scaled-down plan of achieving an enrolment of about 2,000 students in 10 years, half of what UNSW had agreed to in the revised package of December 2006. Moreover, UNSW was now unable to provide the assurance that there would be a permanent campus in Singapore, even on a reduced scale. This called into question UNSW’s ability to deliver on its original intent of about 10,000 to 15,000 students at the steady state. EDB and UNSW explored various scenarios and options but could not agree on a revised package.

On 19 May 2007, EDB informed UNSW that it could not agree to the revised support package proposed by UNSW. However, EDB made several counter-offers to help address UNSW’s concerns. First, EDB was willing to give UNSW two years, until April 2009, to decide whether to develop the new campus at Changi. Second, EDB offered not to claw back the grant and loan incentives that it had disbursed to UNSW for the Singapore campus if UNSW agreed to carry on operations and meet a set of interim targets until it made its decision on the new campus in April 2009. Third, EDB offered that if and when UNSW should submit its campus proposal, EDB would assess afresh the proposal for a support package, with support commensurate with the benefits of the project to Singapore. In the end, UNSW decided to cease operations because of what it perceived as an unacceptable level of financial and operational risks. UNSW announced its decision on 23 May 2007.

Before we come to any conclusion of the UNSW decision, let us step back and keep in perspective a few fundamental points. First, investors know their businesses better than the government. In this case, UNSW - as the investor and the operator - is in the best position to assess the viability of its business plan and to decide whether to start a comprehensive university in Singapore. Second, the government’s role is to facilitate and support investors in their decisions, not to second-guess or guide those decisions. In this instance, EDB’s job was to facilitate UNSW’s investment by providing it a level of support commensurate with the benefits of the project to Singapore and putting in place appropriate safeguards if the agreed milestones are not achieved. Since public funds are being used to support this investment, EDB is mindful that the project creates sufficient benefits to Singapore in terms of jobs and economic value. This is because we want to make every investment dollar count.

Mr Speaker, Sir, UNSW’s decision is a business decision. While we as government can play a role in giving support to investors who want to set up operations in Singapore, we cannot issue a blank cheque. We must ensure that public funds are well utilized and yield strong benefits to Singapore. EDB’s support package for UNSW was premised on the basis that UNSW would undertake a long term commitment to establish a university of significant scale in Singapore that will create new economic value. EDB’s grants and loans are conditional on UNSW achieving pre-agreed milestones such as student enrolment, failing which they become recoverable.

To date, EDB has disbursed S$15 million in loans and S$17.3 million in grants to UNSW. As UNSW will not be able to meet the performance indicators that it committed to EDB in 2004 and 2006, UNSW is required to return the disbursed loan and grant to EDB. The disbursed loan is backed by a bank guarantee. EDB is currently discussing with UNSW the recovery of the disbursed grant. The Government does not have any outstanding liabilities to third parties with regards to the UNSW project.

We regret UNSW’s decision to pull out, but this is their business decision and we will have to respect it. The government’s bigger concern was the impact of UNSW’s decision on the students. EDB therefore worked closely with UNSW and MOE to assist the affected students. UNSW has assured us that it would mitigate the impact on the students. It has offered scholarships of between S$12,000 and S$22,000 per annum to the students who choose to go to the UNSW Sydney campus to continue their studies. This is to help with the living costs. To date, 116 students out of the 143 students enrolled for Semester 1 at UNSW in Singapore have opted to study in UNSW Sydney campus. For students who wish to remain in Singapore, EDB and MOE have been working closely with UNSW to provide alternatives. NUS, NTU and SMU have helped by extending their deadlines to the UNSW Asia students to apply for admission. They have offered 24 places to the students who meet their admission norms and of these, 17 offers have been accepted to-date.

Mr Speaker, Sir, the closure of UNSW Asia will not dampen our aspirations to become an educational hub. Not all investment projects will succeed. But that should not stop us from constantly seeking new investment projects that can add value to Singapore. We will continue to bring in new projects and build on the base that we already have. Today, we have more than 16 foreign universities and 41 preparatory & boarding schools (comprising 38 foreign system schools and 3 privately funded schools) in Singapore.

More recently, we have also successfully attracted a range of reputable foreign educational institutions to set up their campus in Singapore. Recent additions include institutions such as the University of Nevada Las Vegas, the New York University Tisch School of the Arts, Duke Graduate Medical School, and foreign system schools such as the Bhavan Indian International School, the Delhi Public School and the Chinese International School. These institutions are doing well here. In all, there are currently 80,000 international students in Singapore today.

The market for international education, especially in Asia, is growing rapidly. Singapore is well-placed to seize a strong position in this market: we have high education standards, a secure environment and good quality of life, and a unique East-meets-West cosmopolitan environment. These will stand us in good stead, as EDB seeks to bring in more reputable foreign institutions and enrich the education landscape in Singapore.

Question No. 56 of Notice Paper No. 161 of 2007