✔Fact Checker here.
✔✔✔✔✔ Yesterday's meeting of the Academic Council marked a turning point: from the faculty's listening to Brodhead's plans for China and sharing some of his excitement, to many professors posing and reposing serious sustained questions.
Hopefully it was a moment of awakening not only for Brodhead but for the administrators leading us into this sinkhole, including Fuqua Dean Blair Sheppard. Within the business school in particular, even tougher, more incisive questions are arising. Be mindful, please, that the Trustee "green light," to quote the Chronicle for Kunshan plans applies only to negotiations. The faculty, the Academic Council and the Trustees must all approve any agreement.
Beyond a moment of awakening, it should have been a moment of great embarrassment for Dick Brodhead. Last November he sent his global vice president Greg Jones to the Academic Council to suggest the mother campus would have to subsidize Kunshan by $1 million a year. The president himself stood before the Council in January and upped the figure to $1.5 to $2 million annually.
Now -- in a separate document distributed silently before Brodhead spoke, because he did not have the fortitude to face the faculty and say it himself -- the administration concedes those numbers were misleading, as reported by Fact Checker. They only included money coming from Duke's general fund, not larger appropriations from other Duke pockets. Yes, all of it at the expense of Duke in Durham.
✔✔Let's look at the Chronicle article this morning: The lead paragraph states that the operating loss is "expected to cost Duke (is) $37 million" over the next six years.
That assumes our share of losses is contained to the lowest end of the range the administration now concedes, $5.4 million a year.
✔✔✔✔✔ If you take the upper range, $15.6 million a year for six years, you are at $93.6 million -- a number the Chronicle should have used with equal emphasis. (These numbers have deteriorated since the February 25-26 Trustee meeting, when the upper edge was put at $12 million annually)
What did FC tell Loyal Readers weeks ago, based upon secret numbers current at that date: that Duke's share of operating losses will be at least $100 million and more probably $150 million, and maybe higher in the first decade.
✔✔This line in the Trustee briefing documents deserves special emphasis: "We must stress that virtually all of the key drivers of the financial picture are unproven estimates."
That sentence applies particularly to income -- for we know nothing about how many students may show up or how much we can charge them. (Charge we will, other documents show Duke proceeding on the believe that Chinese are intoxicated by high prices, confident they lead to higher quality.)
That's right, our income estimates are uninformed guesses. We might as well go down to Shooters on a losing night for our basketball team, ply someone with a few more drinks, and then ask him or her to throw a dart at numbers we've posted on the wall. That's how accurate Duke's estimates are.
✔ Be mindful, fellow Dukies, that so far we have only talked about annual operating subsidies. The capital start up costs, including construction and furnishings, have similarly spiraled.
Deputy Fact Checkers are at work, talking to faculty contacts. We are examining not only the 23 page excerpt of the "Planning Guide" given to the faculty, but the full 47 pages given us exclusively by a mole.
Please check our blog, as our ability to post on the Chronicle website depends on the newspaper's running a China story.
✔✔Final point: Brodhead told the faculty member who wondered if the Duke campus would be isolated in an industrial park, that a student could easily take a 16 minute train ride into downtown Shanghai.
This is as misleading as this man has ever been.
First, the student has to get to the train station. The bus ride to the train station is 70 minutes. There are no cabs available. The Marriott hotel far outside the city that our basketball team is going to stay at (this is for a summertime tour of China and Dubai) warns its guests arriving by train that they are on their own because there are only 700 cabs in all of Kunshan.
Now the 16 minute trains that Brodhead speaks of (Sheppard puts the timetable at nine minutes in a briefing for Fuqua faculty) are new high speed long distance trains linking Shanghai with the vast inner reaches of the country, and also Shanghai with Beijing. Most of those trains zip by Kunshan, with only four a day stopping, and they are designed primarily for freight -- for computers to be shipped to America -- not for passengers. The ride on regular trains is at least 53 minutes.
And Dick Brodhead, apparently when you were chauffeured around Shanghai, you did not notice this next point. On the Shanghai end, the high speed rail station is a 35 minute subway ride to the historical, tourist and business center of the city.
Oh yes, we hope this is a daytime excursion. The train service from Shanghai to Kunshan stops at 7:35 PM at night. People arriving at Shanghai's international airport are warned to plan on spending the night there.
That's what a student wishing to escape the wasteland of Kunshan faces.