OP Jindal Global University (JGU), the parent organisation of its largest (law) college JGLS Sonepat, has entered into a sophisticated outsourcing deal with Goldman Sachs-owned student housing and services company Good Host Spaces (GHS), as first reported by Mint on 10 June (hat-tip to several of our commenters who alerted us to this somewhat old but nevertheless interesting piece of news).

The deal will give JGU around Rs 900 crores in cash with which to expand, while GHS will “manage and operate the non-academic services such as student housing, dining services and laundry facility for the benefit of the students on campus”, according to JGU chief financial officer (CFO) Arun Kumar Jain.

The deal only covers existing student housing and does not include any “future student housing to be built on JGU campus”, said Jain.

Jain explained more about the deal and he explained: “This is in tune with the current global practices by many universities in USA, UK, Europe and Australia for the purpose of efficient management of non-academic services.

“In India also currently some universities have entered into such arrangements as JGU.”

The deal would also be a “resource mobilization process in order to strengthen the financial governance of the University in the form of acquisition of land, construction of new buildings and overall expansion of the campus”, said Jain.

“This will also support JGU to fulfil its plans and commitments to expand schools and programmes pursuant to the Letter of Intent received from the Ministry of HRD, Government of India, recognizing JGU as an Institution of Eminence (IOE) in August 2019.”

Balanced profit motives?

IoE and greater ambitions aside, GHS, being a business owned by one of the world’s largest private equity funds, did not enter into the agreement as an act of charity but presumably as something it can generate a healthy profit from.

So had JGU secured any assurances or terms in the deal so that charges or service levels of accommodation, mess or laundry, for instance, will not increase excessively in price and above historical levels to students?

“JGU has its own policies relating to fee increases and this agreement is in line with our policies, which is very much keeping in mind factors relating to affordability, accessibility, and inclusion, which are duly communicated to all students of JGU at the time of admission,” explained Jain.

The change in day-to-day functioning would not be overly drastic though: accommodation, dining and laundry and related so-called “non-academic services” had always been outsourced to external agencies and independent contractors by JGU, according to Jain. “They will henceforth, be managed by Good Host Services.”

According to JGU’s website, Sodexo is currently running its catering function while several other mall-style restaurant chains have also set up shop in a food court area.

In terms of who exactly will own the JGLS land and real estate, Jain said that the “terms of the contract are subject to NDA”.

“However, it is useful to mention that the resources are being used by JGU to purchase over 200 acres of additional land for the expansion of the university,” he added. “This will augment the campus capacity from our existing land of 80 acres to nearly 300 acres in the near future.

“This has been done with a view to fulfilling the requirements of the ‘Institute of Eminence’ (IoE) process. There is a requirement under the IoE to establish an IoE Endowment Fund and that has also been created through these resources, which is part of the compliances under the IoE.”

The move follows JGLS also aggressively pushing into other areas, aided and abetted by the IoE tag, such as offering entirely online LLM degrees for at least 100 students.

Due disclosure: JGLS is an advertiser on Legally India.