Algonquin pulls out of Saudi Arabian campus

Failed venture in Middle East cost school an estimated $5.8M

Algonquin College is pulling out of its controversial, money-losing college for men in Saudi Arabia.

The failed venture in the Middle Eastern kingdom will end up costing Algonquin an estimated $5.8 million, college officials say.

That’s an estimate, because Algonquin has just begun negotiations to transfer the school in Jazan back to the Saudis. Despite repeated efforts to fix some of the problems at the school, it continued to lose money, said Doug Wotherspoon, the Algonquin vice-president responsible for international programs.

“We’re following the entrepreneurial creed, which is to be bold, be innovative, be courageous, but when it doesn’t work, move on.”

The transfer is expected to be done by the time the school term begins in September. Algonquin does not own the college buildings.

It’s a crashing end to a venture that began with high hopes in 2013 with the opening of Algonquin’s first international campus. Algonquin College Jazan was supposed to earn revenue that could be plowed back into programs at the Ottawa campus, and enhance Algonquin’s reputation as a “global leader” in exporting education. Officials predicted Jazan would earn profits of $19.9 million over the five-year contract.

Those projections were quickly revised downward as the college ran into problems. Students arrived with poor English, math and study skills.

They were academically unprepared for the technical courses Algonquin was contracted to deliver. Many dropped out and failed to attend classes, which was a problem because Algonquin was paid based on high attendance. Algonquin officials have acknowledged they failed to do “due diligence” about conditions in the country before opening the college.

Jazan College also came under fire from critics who said Algonquin should not operate in a country that abuses human rights and discriminates against women. Premier Kathleen Wynne said it was unacceptable that programs weren’t offered to women.

Algonquin officials responded by saying they had been trying from the beginning to open a womenonly college in Saudi Arabia, too. That attempt has also failed, president Cheryl Jensen said in a statement Thursday. “It became clear in negotiations over the past months that a female campus was not going to be possible.”

Jack Wilson, a vice-president of the Algonquin College faculty union, said he was pleased by the decision. The faculty union was concerned about human rights violations in Saudi Arabia, the restriction against women teaching or studying at Jazan College and the safety of employees there because of shelling at the nearby border with Yemen.

“It’s the appropriate thing to do. But they should have done it on the basis of human rights issues, not whether it was profitable or not.

“People are overwhelmingly concerned about doing business with any country with serious human rights abuses, whether it’s selling (Saudi Arabia) armoured vehicles or providing education.”

Algonquin’s policy is to engage with countries that abuse human rights rather than isolate them. Algonquin will continue to explore opportunities to offer programming abroad, Wotherspoon said.

Wilson said he was surprised at the decision to pull out, since this spring Wotherspoon assured the Algonquin board of governors that things were improving at Jazan College. A financial update given to the board in December 2015 said Jazan College was expected to earn money during the 2015-16 school year and make a total of $4.4 million in profit by the end of the five-year contract.

Those projections turned out to be optimistic. Jazan College lost a total of $1.5 million in its first two years of operation, Wotherspoon said in an interview Thursday.

The total loss for this year is estimated at $4.3 million, he said. That includes the costs associated with ending the contract and transferring the school. The combined losses since the school opened amount to an estimated $5.8 million.

This year’s losses will be covered by contingency funds, mainly from the college’s international department, Wotherspoon said.

The money will not be taken from tuition fees or operational funds provided by the provincial government, he said.

The international department at Algonquin includes other programs offered abroad as well as revenue from foreign and ESL students who study at Algonquin. Overall, the international program makes money for the college, and some of that profit was saved in a contingency fund, Wotherspoon said.

“International operations at the college are not funded by the provincial government,” he said.

Wotherspoon said the Jazan College had an excellent reputation in the region and helped improve the lives of students who attended. “But we have stated from the outset that this has to be a financially viable operation.”

Algonquin is not the only international operator to struggle under the Saudi Colleges of Excellence program, which invited international bidders to run technical colleges in the kingdom.

Britain’s Lincoln College shut two colleges it operated in Saudi Arabia this winter, and British education company Pearson pulled out of colleges it operated in the country in the summer of 2015.

Algonquin will work with the Colleges of Excellence to transfer the Jazan campus to another operator, Jensen said in an email to Algonquin staff.