Algonquin College took $6.2M hit on failed Saudi campus

Algonquin College's failed, men-only college in Saudi Arabia has lost $6.2 million in both operating losses and costs associated with exiting the deal, according to figures released Monday at the school's annual board of governor's meeting.

Last August, Algonquin transferred ownership of the Jazan College, a technical school located in a rural area of southwest Saudi Arabia, to British company Interserve Learning and Employment.

But it's still paying the Colleges of Excellence in Saudi Arabia, the group it signed the original contract with.

As a result, more than half of the overall loss in the Saudi venture, which now stands at $6.2 million, is $3.7 million in costs associated with Algonquin exiting the deal.

Doug Wotherspoon, Algonquin college's vice-president of innovation and strategy, said the $3.7-million figure could actually rise as final payments for things like insurance and electricity costs are still being negotiated. Algonquin has paid all of its approximately 100 employees, including teachers, for outstanding money owed, he added.

Wotherspoon can't say when the final tally on loses associated with Jazan College will be completed — but estimated it will be before the college's current year-end.

"You can never predict the future so you just have to learn," said Wotherspoon. "We've learned how to improve our risk management...."

School drew fire for ignoring Saudi human rights complaints

When Algonquin opened the school in the Middle East in 2013 under a five-year contract, administrators at the college projected it would generate millions of dollars that would be used to operate programs in Ottawa and would bolster the college's reputation as a leader in international technical education.

But critics quickly attacked the school's decision to open a campus in Saudi Arabia, saying the country's leaders abuse human rights and discriminate against women.

The losses began piling up soon after the school opened. Algonquin said it was in part because many students at the Saudi school didn't have sufficient English-language skills to study at the college level, leading to many students failing or dropping out.

In 2013, a report to Algonquin's board of directors projected Jazan College would generate $19.9 million over the five-year contract.

Two years later a revised report placed the estimated profit at just $4.4 million. Then, last August, when Algonquin announced it would no longer operate the school, figures showed losses were at $5.9 million.

Union leader blames province for forcing schools to look elsewhere for funding

Jack Wilson, the first vice-president of OPSEU local 415, the union which represents faculty at the college, was a vocal critic of the school's decision to open the school.

"I'd like to think that they would do better diligence," said Wilson, who attended Monday's board meeting. "I'd also like to think that they give greater consideration to human rights in any of the foreign partnerships they do in the future."

Despite the losses in Saudi Arabia the school has been successful in attracting more foreign students, who pay higher tuition fees, Wotherspoon said.

While Wilson applauds the recruitment of foreign students to Algonquin, he argued the school's risky venture in Saudi Arabia underscores that colleges in Ontario are being forced to look for revenue streams outside of the province to finance operations.

"Should the colleges bear the risks of these foreign ventures simply because our own provincial government has failed to properly fund the colleges?" asked Wilson.

"I can't imagine asking school boards and hospitals to go into overseas venture to fund operating rooms or special education classes in primary schools."