Kunshan - the cost grows and grows

✔ Fact Checker here. Good day fellow Dukies!

(The Chronicle reports today on Mr Brodhead's annual address to the faculty, which attracted 100 out of 3,138 faculty members.)

Desperate to salvage the signature initiative of the Brodhead years and establish a new “partnership” with a Chinese university in order to qualify to open a campus, Duke reached far, far down into the list to come up with Wuhan. Situated in the vast inner region of the nation, this school is not even included in the Times of London survey of the world’s 400 greatest universities (Duke is #24). Moreover, much of the “university” is not a hotbed of intellectual ferment as we are led to believe, but in good part a vocational school.

The new partnership is a far cry from what we had with Shanghai Jiao Tong University, a partnership that collapsed very mysteriously with the Brodhead explanation that Jiao Tong did not want involvement outside its own province (state), a geographic barrier that sounded like a convenient excuse since everyone knew from day one that Kunshan was in another backwater.

There is no explanation, of course, from Mr. Brodhead why Wuhan, located much farther from Kunshan, would find such an out-of-state agreement agreeable when another university had rejected it.

The most important difference is that Wuhan seems to have done a good job insulating itself: it will not share in the great financial risks of this venture, putting no money on the table now or later. Nor share in the reputation risks: it is not even obliged to provide any faculty.

And Duke -- creating a new corporate shell for this new university -- will have only three of seven members on the board. Yes a new university: the idea that this is merely an arm of Durham is over.

✔ Risky? Yes risky. That word is one the Brodhead administration has not advertised, but deep in briefing papers to be given the Trustees for their meeting next Friday and Saturday the risk is apparent time and time again: two economic models show the possibility of far far greater liability for Duke if the revenues and costs -- which are just wild estimates -- do not pan out. Yes, a financial liability -- year after year -- ten times what we are told about now.

With unusual candor, the Brodhead administration concedes in the briefing papers we do not know how many students might attend (although most will be Chinese), we do not know the quality of student we might attract, and we do not know how much we will be able to charge them.

If it were not so patronizing to the Chinese, the suggestion in the briefing papers (we have seen more than one rewrite) that Chinese think that to pay more is to get more -- and therefore we can soak them -- would be hilarious.

It’s anticipated almost all of the students at DKU at least in its initial years will be on the graduate level -- with the ever expanding Fuqua in the lead. DKU -- yes get used to it. Duke Kunshan University, the official name.

Only three percent of students in one projection will be undergraduates to start -- enough for one small classroom. They will be in a certificate program, not leading to a degree. This meets in a pro forma way at least, another requirement of the Chinese government.

There is no effort to explain if the new university will rob Durham of its international flavor -- by making it possible for Chinese students to get a Duke degree without ever seeing East or West Campus.

Fact Checker will have a full report on these briefing papers on Monday.

✔ ✔ Mr Brodhead conveniently overlooked in his address to the faculty some other, emerging costs of Kunshan:

✔ The Trustees will learn for the first time that while Kunshan is putting up the buildings (including dorm beds for around 700 and 70 faculty apartments) they are an empty shell. Duke is going to have to dig deep for furnishings -- the numbers we have seen are in the $20 million range -- half of it from Duke. The Brodhead administration will describe this as a “loan” to DKU and is asking the Trustees for approval now, although it will not reveal how the loan will be repaid -- if ever -- until the May meeting of the Trustees.

--- This project was sold to us with the affirmation that the city of Kunshan will pay all operating expenses for five years. If a used car salesman pulled off a deal like this, we’d call it bait and switch: Kunshan has gotten Duke to “renegotiate” the deal -- never announced by Mr. Brodhead -- and we are now looking at Duke paying slightly more than half of the expenses for six years. After that, it’s anyone’s guess what can be negotiated. Kunshan might for the first time demand rent for the buildings.

Remember, please, Loyal Readers, how we were told that Kunshan was going to pay all the operating expenses for five years -- even the electricity.

✔ Our president gave lip service to our core values, brushing through academic freedom and neglecting open admissions -- the opportunity of an education for all. With no endowment and no ready source for scholarship money, there is great danger that this DKU venture will be serving only rich Chinese and only those selected by the Communist regime.

At their meeting next week, the Trustees will be told DKU will mount its own development program. They of course will not be told how this might impact efforts to raise money for the Duke campus.

For sure, with every top administrator at Duke listed in a chart for new responsibilities in China, this venture is going to divert and dilute attention here at home. It is similar to the situation that developed when Duke Medicine charged into Singapore -- at least we know there was half a billion dollars on the table for that move -- and our Medical School dean, who once had a full time job in Durham, started spending fully half of his time in Asia.

✔ ✔ ✔ Every dollar we sink into Kunshan -- with more and more dollars needed every time we write about this folly -- is money that won’t be available in Durham.

✔ The Trustees will raise tuition next week -- likely making Duke’s cost for an undergraduate ten percent more than Princeton's; to be sure, Kunshan is putting pressure on the increase.

✔ So far as we know from the Chronicle report (we will read the transcript when it becomes available) no one at the faculty meeting mentioned the wage freeze -- now in its second year. Money for Kunshan is not on a tree, it has to come from somewhere, and the Chinese venture reduces what is available in Durham.

✔ And no one apparently mentioned -- even though it was a faculty meeting -- the instability in the Arts and Sciences, with simply too many professors. More than 600 according to the news release announcing a new dean (actual count 647) versus only 502 at Yale according to the student newspaper earlier this month. With cutbacks and even layoffs looming, every dollar spent in Kunshan means a dollar must be saved in Durham.

In the overview, there is great danger, fellow Dukies, that the Brodhead administration is making decisions based upon its own place in Duke's history -- rather than on what is best for the campus. Cynical yes, but if they want to project another truth, let them do this in the open, so we do not learn in mid February, 2011 that Kunshan is not putting up the entire campus and that it is not meeting all the operating costs for five years.

We fear particularly with respect to Fuqua -- where Dean Sheppard has a never ending stream of expansive suggestions, and a track record of failure after failure -- that the rapid expansion in half a dozen places around the world all at once -- is very ill advised; this is an idea we did not develop ourselves, but one shared with us by senior faculty in Fuqua.

Please read additional details in our Special Report planned for Monday. Have a good weekend.