Twelve weeks ago, the National Commission for Further and Higher Education offered the Sadeen Group a licence to operate a university in Malta on the proviso that they adhered to 16 stringent conditions. The Commission made it plain that the conditions laid down were non-negotiable.
Sadeen has finally concluded that non-negotiable means non-negotiable. The Commission has announced that Sadeen Education Investment Ltd has been awarded a licence for five years, renewable subject to its achieving the quality standards required. The crucial issue now is to ensure that the Sadeen Group adheres to the conditions laid down.
They have already missed one benchmark in their business plan, which had been drawn up on the basis of the first students being enrolled from September this year. Instead, the provost (equivalent to our rector) has announced that they “expect to enrol their first students in August next year”. Sadeen’s feet must be kept to the fire if the rigorous educational standards which Malta lays down for start-up universities are to be met. In AUM’s case, the principal conditions oblige Clemson University – a reputable 127 year-old American university with which AUM has a contractual arrangement, to guarantee the quality of processes, procedures and outcomes – to undertake yearly audits (approved and monitored by the Commission) with effect from their operational start date.
The Commission will also be carrying out regular spot checks on any aspect of the operations, processes and outcomes of AUM during this period affecting, inter alia, the integrity and economic viability of student services and support and effective mechanisms for the representation of staff and students.
Perhaps most importantly, the Commission’s first external quality audit of AUM will be carried out in August 2019, 24 months after commencement of operations. This will examine all academic, administrative and service aspects of the university and its associated entities. A second external quality audit in 2021 will focus on the quality of all courses completed, including the outcomes of the school of graduate studies and research.
The eight financial conditions which have been laid down as a result of the stringent due diligence carried out by leading international accountants PricewaterhouseCoopers are perhaps just as vital as the educational criteria as a benchmark for the likely success or failure of the AUM project.
These relate primarily, but not only, to ensuring Sadeen puts up the equity amount equivalent to the capital expenditure provided in his business plan within the first two years from date of issue of the licence. Likewise, Sadeen has been asked to provide, within two years, signed term sheets by a reputable financing institution clearly indicating the terms of the debt funding of this project. The clear implication is that if he fails to provide the hard financial evidence on equity and debt funding within this timescale, he will lose his licence to operate the university.
A number of other financial due diligence conditions have also been laid down to ensure probity, transparent financial order and good governance for the Commission to have full knowledge of the ownership, promoters and investors of AUM and of the flows of capital to fund the project.
After a rocky start as a result of the ill-judged decision by the government to provide ODZ land to build a university and the lack of preparedness of the Sadeen Group, they now have the opportunity to redeem themselves by demonstrating they can set up a quality American-style university in Malta. They will only succeed if they adhere scrupulously to the binding licence conditions that have been agreed.