The Qatar Foundation for Education, Science and Community Development -- the charitable organization aimed at building primary and secondary schools in the Middle Eastern nation run by one of the emir's wives -- would pick up the bill for all overhead costs, from every hour of administrative work logged to every international phone call placed.
UNC officials also say the Chapel Hill campus would not incur any intangible costs as a result of establishing the satellite campus.
With faculty possibly leaving to teach internationally and administrators and staff dedicating time to the Qatar program, officials want to make sure the Chapel Hill campus doesn't suffer.
"We wouldn't do this if resources weren't replaced, or more," said Robert Sullivan, dean of the Kenan-Flagler Business School.
"All of the costs are covered and more here. There's no real cash flow."
Provost Robert Shelton said an obligation-free planning grant from the Qatar Foundation of about $300,000 is covering all initial travel and administrative costs.
"A lot of people have already donated a lot of time to this," Shelton said.
He said officials from such departments as the Office of Undergraduate Admissions, the Office of Undergraduate Curricula and Information Technology Services have been dedicating hours to drafting proposals and working out contractual language.
But he said University officials have been careful to log their hours and to ensure no critical projects have been sidelined or sacrificed.
Chancellor James Moeser, who is expected to decide before the end of the year whether to pursue the school, also said the Chapel Hill campus would not have to sacrifice if faculty members left Chapel Hill to teach in Qatar.
UNC would likely send 12 or 13 College of Arts and Sciences faculty and five or six business school faculty to Qatar at any given time, Moeser said.
Moeser said many of UNC's faculty members are irreplaceable but substitute professors would be of the same caliber.
"We want to bring in scholars of equal quality, not an adjunct," Moeser said.
The cost of bringing in top visiting professors would be covered by a negotiated fee in the contract with the Qatar Foundation, Shelton said.
Shelton said UNC negotiators would come up with the amount that would be specified in the contract by calculating the cost of all staff salaries and other expenses.
"We are very much aware of these indirect costs," he said. "Overhead costs must be covered. For the actual contract, we may wrap it up into an administrative fee of, say, a million dollars."
The administrative fee also would cover the work of departments such as the admissions office, which would be responsible for reviewing Qatari students for admission. The fee would pay the cost of hiring additional staff and possible travel costs of flying admissions officers to Qatar to evaluate potential students. "What's going to happen is that we won't burden an overworked staff," Shelton said.
Staff from Information Technology Services might also become involved in the Qatar program, and officials promise their Chapel Hill resources would not be compromised.
"We are proposing to the (Qatar) Foundation that they contract with us as a separate proposal to build an information technology infrastructure," said Marian Moore, vice chancellor for information technology. "We need to make sure the Internet connection is efficient. We need to make sure faculty and students can communicate freely over the Internet."
But Moore said her office must be fully compensated for assessing the layout of Qatar's campuses and then making recommendations as to how to construct an appropriate Internet network.
"The University is very conscious and sensitive to the fact that if we do something over there, it has to be paid for," she said. "We can't be shifting resources not paid for."
But some officials expressed concern that the Qatar Foundation's generous compensation for indirect costs might send the wrong message to the N.C. General Assembly. Faculty Council Chairwoman Sue Estroff said the General Assembly could be tempted to shift some of its higher education to other schools.
"One always worries how the legislature would view this and if it would decrease support for education here because we're getting resources elsewhere," Estroff said.
Moeser also said UNC administrators need to clearly express to the General Assembly the goals and possible budgetary implications of the Qatar program.
"We wouldn't want to do this and have the state subtract money," he said.
Some administrators said officials also must worry about more lasting intangible costs that could result from the program.
Sullivan said UNC officials should consider the ramifications of UNC going forth with the program and it not succeeding.
"Suppose we're going along, and the Palestinian and Israeli issue blows up or we're told by the State Department that we shouldn't be there," he said.
Sullivan said this scenario and UNC's presence in the area could possibly harm the University's reputation in some people's eyes. But Moeser said political uncertainty on its own should not influence officials to pull their support of the establishment of a business school in Qatar.
"Nothing in life is without some risk," Moeser said. "I don't think the University would suffer any loss of reputation if through no fault of our own we would have to say this program has ended."
But if circumstances arose that would prompt officials to pull out of the program, UNC would be prepared, the chancellor said. Moeser said UNC negotiators would include an exit clause in the contract with the Qatar Foundation that would compensate UNC if officials decided to pull out of the country.
He said it is upon the University to think of the expenses that come with every possible scenario. "Our job right now is to think of every hidden cost for when we present them with a budget."
The University Editor can be reached at email@example.com.
To get the day's news and headlines in your inbox each morning, sign up for our email newsletters.