New colleges hang in balance
A huge £80m Durham University campus development could be in jeopardy as construction company Interserve fights to avoid collapse.
Work to build two new colleges to fit an extra 1,000 beds at the Mount Oswald site to the south of Durham started in September.
But Interserve’s worrying financial situation has raised concerns over the future of the project.
It was announced that the contractor, which is saddled with more than £500m of debt, is planning to dilute the stakes of existing shareholders, causing the share price to tumble to just 6p.
In a statement on Monday, it said that “the deleveraging plan could result in material dilution for current Interserve shareholders.”
Interserve, which holds lots of Government contracts in schools, prisons and hospitals, is already being dubbed “Carillon Mark Two” – a reference to the British multi-national which went into liquidation in January.
The construction cost of Durham’s Mount Oswald project is £80m and the value of the contract is £105m for a 51-year period.
It includes a new site for the John Snow College and a new college.
Both buildings will be self-catering with a mixture of en-suite and shared bathroom accommodation and is hoped to ready for the 2020/2021 academic year. There will also be a ‘hub’ building equipped with an events hall, music and performance rooms, a yoga room, a laundrette and a faith room which is due to be opened to students in autumn 2019.
Construction work began on Monday, September 3 with a turf-cutting ceremony.
In September when the work began, Owen Adams, the university’s pro-vicechancellor, said: “Our colleges are a key part of this wider student experience, along with Durham Students’ Union and Experience Durham, and we are excited to be developing both a new home for John Snow College and our first brand new college since Josephine Butler College was established 12 years ago.
“These new facilities will benefit our students and also the local community, as we increasingly share our facilities with our neighbours and increase the proportion of our students living in Collegiate accommodation.”
Professor Carolyn Summerbell, principal of John Snow College, added: “Moving into purpose-built new facilities at Mount Oswald will allow our community to flourish further still.”