Mrs Lina Chiam: To ask the Minister for Trade and Industry (a) if he can provide an explanation for the failure of EDB-funded education projects such as the Tisch School of the Arts Asia; (b) how much public money the EDB has spent on this and other such failed education projects such as the University of New South Wales Asia; and (c) why the EDB has declined to reveal details of the contract agreed between EDB and NYU regarding Tisch Asia, particularly as to whether the EDB expects to recover its loans.
Written Reply by Mr Lim Hng Kiang, Minister for Trade and Industry
The Global Schoolhouse initiative was launched in 2002 to develop Singapore into an education hub which offers a diverse mix of quality education services and builds industry-relevant manpower capabilities for our economy.
Overall, the Global Schoolhouse initiative has been successful in helping to build Singapore’s brand name in education and provide courses which meet the manpower development needs of our economy. EDB has thus far attracted 11 renowned foreign universities to set up independent branch campuses in Singapore. These include French business school INSEAD (ranked 5th in the Global MBA Rankings), the Technical University of Munich (ranked top university in Germany), as well as Tisch School of the Arts Asia (Tisch Asia) (ranked 4th globally on Hollywood’s 2011 list of Best Film Schools). At the project level, however, there may be specific circumstances that affect the viability of a school’s operations in Singapore.
Tisch Asia was set up by New York University (NYU) in 2007. Its presence has enhanced the scope and diversity of our education landscape and the vibrancy of our media and arts scene. Tisch Asia’s students and graduates have received international recognition and awards, and the school has brought in several renowned industry practitioners to teach and conduct workshops in Singapore.
Tisch Asia was established on the basis that it would be financially sustainable after a few years. However, over time, the school realised that its revenues were lower than projected while its costs exceeded earlier projections, mainly due to exogenous factors such as the appreciation of the SGD against the USD and the construction boom in 2007. To plug this financial gap, NYU contributed over S$20 million in subsidies to Tisch Asia from 2007 to 2011.
NYU eventually concluded that Tisch Asia’s Masters of Fine Arts programme was not financially sustainable on its own. EDB worked closely with NYU and various stakeholders to explore options for the long term sustainability of Tisch Asia’s operations. Unfortunately, none of these options were viable, and Tisch Asia made the difficult decision to close down.
We regret Tisch Asia's decision to pull out, but recognise that this was a decision made after careful consideration. Investors know their business better than Government and are in the best position to assess the viability of their plans. Our role is to facilitate and support projects where there are benefits for Singapore, while ensuring that monies are used judiciously and that processes are in place to monitor the progress of these projects.
EDB provided Tisch Asia with a level of support that was commensurate with the anticipated benefits of having the school in Singapore. To date, EDB has disbursed S$11.68 million in loans and S$5.3 million in grants to Tisch Asia. EDB stopped disbursements when it realised that Tisch Asia was facing financial difficulties. EDB is in close discussions with NYU on the details of the loan repayment.
On the Member’s question about the financial support given to the University of New South Wales Asia, EDB had provided S$15 million in loans and S$17.5 million in grants. This was reported to this House on 16 July 2007.
Our key priority following NYU’s decision is to ensure minimal disruption to the education of the affected students at Tisch Asia. NYU has confirmed that Tisch Asia will remain open at its campus until 2015 and will teach out all existing students in Singapore. This means that no existing students will have their Master’s programme disrupted.