Posted by: Pradeep | June 10, 2009

Consortium in education sector

I had read about companies forming consortium to manipulate business decisions in many sectors, first time I am seeing that happening for education sector in Dubai. Uniquely chamber of commerce is taking lead probably based on encouragement from country’s largest private education provider and forming a group to tackle the policies which in all probability which at times may be putting cap on how much profit the private education businessman can make.

Surprisingly there doesn’t seem to be any mention of other stakeholders in the sector, teachers and parents. This again takes me back to basic question if there are no accountabilities for businessman then how come parents are held responsible for paying for fattening school fee and other expenses which are outstripping the general inflation in the country too?

I was doing some analysis recently and found that on a minimum “for profit” education providers charge atleast 100% more in tuition fee alone as compared to “not for profit” education providers and still crib about not reasonable profits. Here in Dubai all are subjected to similar costs with little bit of variation on either side, then where does the money go? Isn’t it that businessman are entering in this noble sector which paves way for development of future of society with only aim of making unlimited profits without any social responsibility?

When providers start flexing their muscles against regulators and dictating policies, it should sound big alarm to governments. What guidelines interms of profits should be made for education sector which directly affects the future of society and is an issue to be handled on top level?

Posted by: Pradeep | May 29, 2009

Ratings of Dubai Schools

KHDA commissioned DSIB to evaluate all schools in Dubai to bring parity and easier selection procedures of schools for parents. Presently except Indian, Pakistani and Iranian curriculum schools all other schools are inspected and graded. The complete list of schools and ratings is here

 Dubai Schools - Report Card.

Posted by: Pradeep | May 27, 2009

Private schools only work on maximizing profits

I have been reading Gulf News ever since I came to Dubai and look at GN reports with positivity and great respect. I appreciate the report “Teachers complain over low salaries” in Gulf News on 25/5/9.  The reporter did her best in highlighting the bleak side of private education providers attitude towards the very basic pillars of institutes which give them millions of dirhams in profits every year.

However as I read through another report “Private schools bemoan resource crunch”, the data presented through graphs was a big shock to me.

While reporter provided certain analysis of cost of operation against tuition fee hike by schools (as per KHDA guidelines), the graphs shown are absolutely misleading for any reader.

The percentage increase indicated (for 2004 to 2009) in

  • Teacher & Admin Staff salary (74%),
  • Repairs and maintenance (135%) and
  • Accommodation cost (202%)

to show that increase in tuition fee by GEMS schools (36%) during same period was insufficient is erroneous.

Please follow the example below to understand the scenario in totality;

with above tuition fee increase the revenue generated increased by 39.2% (this is with the assumption that during same period no. of students didn’t increase – if no. of students increases by 5% during same period then it would generate 6.96% additional revenue to school operator)…

  • Teacher & Admin Staff salary in any of the private Indian schools here doesn’t go beyond 20% of total revenue. Even if I agree with reported figure of 74% increase, it affects revenue by 14.8% only (remember without increasing student nos. schools got 39.2% above),
  • Repairs & maintenance in any of the schools here doesn’t go beyond 4% of total revenue. Even if I agree to reported figure of 135% increase, it affects the revenue by 5.4% only (remember without increasing student nos. schools had 24.4% additional revenue still with them (above),
  • Accommodation costs in any of the establishment won’t be more than 30% of salaries (meaning only 6% of total revenue at most). Even if I agree to reported figure of 202% increase, it affects the revenue by 12.1% only (remember without increasing student nos. schools had 19% additional revenue still with them (above).

When one takes total sum of above, one would observe that actual impact was only 32.3% while school tuition fee was hiked by 39.2%. This leaves additional profit of 6.9% with schools as compared to base year of report (albeit no fair financial accounts are available in public domain here, on conservative side I understand the profit in base year for private Indian schools here would have been close to 30%).

One would be astonished to note that with additional student base, the surplus generated by private schools here multiplies very fast.

 

Cost vs Revenue            

On other note if one co-relates % hike in salaries and teachers statements on actual hike, one would notice private education providers are doing all that they can to only MAXIMISE their own profits and nothing else.

I also agree with the statement made by Mr. Sunny Varkey “How can you achieve quality without investment? If so, I would like someone to show me that.” I am of belief that investment has to be in teachers and students to improve quality and not in buildings.

If private education providers like GEMS claim that they are only making huge losses due to government regulations that limit hikes in tuition fees then I would like to point out a few questions that probably haven’t been posed to such operators as yet…

  1. Why are they starting new schools year after year (MoE and KHDA regulations on fee hike are not new, they are there for long time)? GEMS has announced opening of admissions for one more school from September this year in Dubai.
  2. How come ‘not for profit’ schools like Indian High School operate with much lower fee structure and still are expanding without external funding? Please note that DMHS average present tuition fee is 400% higher than Dubai IHS.
  3. How do GEMS group schools which offer UK/US curriculum are operating at fee levels which are much lower than some of the Indian schools in same group. While Indian schools have typically 30-38 students in class and UK/US curriculum schools have 20 students in class (meaning 50% higher operating costs on lowest side)?
  4. How come similar schools by other education providers are able to generate profits and at the same time offer much lower fee too?

 Last week I read article by Ms Natasha Ridge in The National and it was pointer to me to learn that private education providers have done no good to any society to date and delegation of education is very delicate matter. KHDA is doing great job in regulating the sector an helping Dubai achieve its goals on education, it would be worth that Gulf News supports KHDA in its efforts by representing facts that are researched and analyzed thoroughly.

The newspaper not only surveys news but also ideas, opinion and ideologies.  It is regarded as the fourth pillar of freedom and is made for  the welfare of the country and its people.

Posted by: Pradeep | May 18, 2009

Should education be delegated

Below article is reproduced from The National

According to the latest UNESCO figures, government spending on education worldwide totals nearly $2 trillion a year. It is only relatively recently that the private sector realised the potential profits to be made. Globally, there has been a steady increase in the number of companies specialising in educational services. Private companies not only run private schools, but increasingly also are involved in running public schools and advising governments on how to run school systems. Examples of all of these can be found in Britain, the US and now in the UAE, where we have a large private school system, public-private partnerships and a growing use of private firms to plan education strategies.

But what does this mean for parents? For private providers of education in places like Dubai, there is a captive market. As private companies acquire more schools, consumers – parents and students – face less and less choice about fees, teachers, leadership and school quality in general.

Private schools become more generic and less specialised, and budgets and fees presumably are managed in a way to maximise profits. If there is a financial crisis such as the one we are faced with now, the increased costs are passed on to parents or schools are simply closed.

The historical experience with the use of large-scale, for-profit education providers has not been good. In Australia and the US, governments have been forced to bail out companies that failed to responsibly manage large numbers of schools. Private providers are faced with none of the issues of the public sector, they are beholden to no one but their owners or shareholders, and they have no moral obligation to the community they serve, to the country or to the city where they are based.

Small private schools have to cater to the market and keep parents happy; they cannot treat their clients lightly. But when private providers manage a multitude of schools, or when the majority of students cannot attend the public system, such as in the UAE, parents are at a distinct disadvantage.

Parents select private schools based on two factors: quality and price. Many will compromise slightly on quality in order to pay a price they can afford. But when a school increases fees to the order of 90 per cent, as proposed by the Gems-managed Modern High School, it is a question how many parents can still afford to send their children there. However, it is no simple matter to change school.

Not only do many parents not have the option to send their children to a public school, there is also only a limited number of private schools in the UAE and places may not be available. Private providers in the UAE know this and they know they have, at least in the short term, the upper hand.

The school inspections conducted by recently by KHDA hold private providers accountable for the quality of education they offer, and by making fee increases contingent upon quality, the KHDA is also ensuring that private schools do not take advantage of parents. It is in the best interests of the UAE as a whole for local governments to be involved in the private-education sector. The children who attend private schools comprise the majority of children in the UAE, and also include an ever-growing number of Emiratis.

Corporations are driven by profit but what drives the provision of education is much, much more. Education does not only benefit the individual but also benefits society. And schools do not only serve to educate students for future careers, they also create good citizens and responsible members of society. Many of the benefits from schooling therefore accrue to us all, whether we have children or not. When we realise that the benefits of education are more than personal, it becomes in the best interest of governments to ensure quality in both the public and private education sectors. While the private sector may be more efficient in some areas, there are two key areas in which government provision has always been deemed essential – education and health, both of which accrue social benefits. When we involve private companies in running public schools or in deciding the direction of reforms of school systems, we are on questionable grounds. We are trusting in firms that may have little experience in education, that may have no long-term investment in the development of the nation and that are working in order to maximise their own gains.

The efforts of the Knowledge and Human Development Authority, while probably not perfect, at least point to an honest model for education reform. They have inspected schools, participated in international benchmarking and now they have consolidated all of this into their report. They are providing an essentially free report on the state of education in Dubai which can be used to guide policy reforms not only in Dubai but in the whole UAE. The KHDA is also building local capacity that frees them from the tyranny of consultants.

Education is too important to be delegated. It needs local involvement and ownership.

Posted by: Pradeep | May 13, 2009

RERA revises rent index in line with market slump

The season is up for lease renewals in Dubai and RERA came out with new rental index in line with market slump. The rents have dropped to less than half in last 4 months in many places and average rent drop is about 17% from peak.

Landlords have been using earlier RERA index to further increase the rents in these difficult times too, new index is just in time for many to save those additional outflows and make their ends meet.

Only thing missing is what happens with people who rented at peak level? There is no clear guideline on decrease in rents to market levels by landlords. While I spoke to RERA, they emphasised on the fact that landlords should reduce to rental index level and if they don’t then it can be put forth to rent committee.

One can check for maximum increase allowed on present rent through RERA provided rent increase calculator on their website. You can access it through http://rpdubai.ae/rpdubai/rentals/rental_increase_calculator.do?lang=0

Posted by: Pradeep | May 10, 2009

Country of origin tags on Mobiles

It was till late on Wednesday night that I had believed in country of origin tags on mobiles. I purchased new Nokia 6300 from one of the leading electronics retailer in Bur Dubai and specifically asked him for NOT MADE in CHINA. The sales person gave me MADE IN HUNGARY, the box had this tag, the mobile inside had same tag…but alas the supplier did only small mistake of not covering the original tag inside the mobile. I took it back to retailer and the guy promptly took it back knowing that it would cause trouble for them if I make any further statement.

The sales guy asked me to come back on Saturday to get other piece, the story unfolded on this day; MADE IN HUNGARY is just a TAG and mobile is actually made in CHINA only. I took my money back as I found the retailer was using unethical ways to do the business. I went around in 2/3 more shops and found that it was common practice. Finally purchased from one shop who was candid to say that it is made in CHINA only; no other country of origin available for that model.

We as consumers pay premium when it comes to made in European countries tag; while in reality knowing this emotional requirement of customers the retailers in Dubai have embarked on unethical business practices of repacking the stuff with changed country of origin. I suggest all to just ask for Made in China first and inquire for other country of origin, if it is really there then the retailer probably would come out clean…else buy what is there knowing that it is going to be Made in China only…but don’t pay any premium for this.

It is important that companies like NOKIA should out clean on country of origin of their various handsets. I have seen recently Sony not mentioning any country of origin on products which it gets from China…disgusting.

Posted by: Pradeep | May 6, 2009

Dubai goes hitech on parking tickets

RTA has announced the m-parking facility where in vehicle parking fee can be paid through the mobile and similarly it can be extended also through the mobile. This would work with Etisalat mobile phones and I call it big relief to people who park and go for shopping or meetings where in times are not in ones full control.

m-parking-procedure

Posted by: Pradeep | May 5, 2009

Good governance speaks louder than evil intentions

It was not before late evening on 30th April 2009 that KHDA stepped in with full strength on Dubai Modern High School fee hike issue and stopped the bullying by GEMS. As GEMS had not completed the premises as per the original plan submitted to authority for approval on unnatural fee hike of 90%, KHDA allowed GEMS to shift DMHS to incomplete NAS premises but without implementing fee hike. So far so good, it was small relief for parents but big step towards “fair and equitable” resolution of the issue.

GEMS lamented KHDA immediately after this and subsequently in press and media regularly as biased regulator. GEMS gone on record to state that KHDA has been preventing development of education sector in Dubai and coming in the way of vision of Dubai. It is interesting to note here that till late on 30th April 2009 GEMS had been stating only single sentence that “fee hike would be implemented in these times also because they have approval from KHDA”. As soon regulators tightened the grip on neck of GEMS for not fulfilling the plans submitted by them as basis of approval, GEMS got angry with them.

Since September 25, 2008, GEMS has been misguiding parents and misrepresenting facts to parents and press and KHDA with only aim to exploit more money from parents. It is very important that KHDA takes further necessary steps to nullify the decision it had taken earlier based on “facts and data” which was manipulative and thus intended by GEMS. It is all the more important now as GEMS has clearly indicated that they would not go ahead with Phase 2 of the project which was submitted earlier.

Growth of education sector won’t happen until private sector shows social responsibility and considers the education sector with more humane views. I fail to understand how GEMS intends to achieve 5m students or 5000 schools whichever happens first without involving parents and teachers in their decision making process.

Posted by: Pradeep | April 29, 2009

Learn, Aspire, Be … closes tomorrow

It was long drawn road to achieve justice for 1500+ parents of Dubai Modern High School managed by Global Education Management System (GEMS) owned by The Varkey group of Dubai. Today I feel sorry for the state country as it failed to prevent the miscarriage of justice under its nose. GEMS vide their circular today declared closure of Dubai Modern High School from tomorrow at 11:45AM.

What is that GEMS achieved out of this high handed and arrogant approach? Not so sure as yet.

The problem which GEMS created by using smug tactics since 25th Sept 2008 could have been resolved very well in WIN-WIN situation as Parents did offer to agree to fee hike with longer spread of 4-5years  in their first presentation itself. It is GEMS which believed and behaved in a fashion that laws are only to squeeze parents and GEMS is above the laws of land.

Some bodies which were trusted to protect interests and welfare of children (parents) too behaved in manner which would be remembered for long as there is no place for “fair and equitable” solutions here. People with money have power and things favor only them.

DMHS preaches Learn, Aspire and Be … I failed to see any of these words being used in right spirit in the whole issue. Albeit GEMS did prove that they have Learned to manipulate anything and everything here to suit their Aspiration to Be the biggest education providers.

Posted by: Pradeep | April 14, 2009

QUIT GEMS

Finally GEMS management has decided to go ahead with their decision to downgrade education as noble profession to a commercial business wherein only profits make sense and everything else is irrational. After struggle of almost 80 days, parents of Dubai Modern High School have been left low and dry by GEMS group in collaboration with regulators (the authority without responsibility to society or school fraternity).

After reading recent news item in Khaleej Times on GEMS founder Mr. Sunny Varkey, it was amply clear that there is no difference in education business and hotel business except that rooms are used for different purposes in both cases. What makes me worried more about the whole thing is the way they shrugged off their responsibility and accountability to society (I don’t know if this word is apt for expat community in this place) to keep few happy.

It is of paramount importance that Parents who are suffering due to monopolistic practices of GEMS do make Indians back home aware of prejudiced plans of this group to expand and commercialize education in India. It is each individual Indian who has to contribute to Indian society at large for good future and I don’t think that making educational institutes in line with hotel business segmentation is good for any society in long run.

Those who are affected in Dubai and want to move away from GEMS group managed schools can check on recent option of JSSIS. Attached herewith dmhs-vs-jssis-fee-forecast-v5 is the possible savings in tution fee for each school going kid with the shift to JSSIS. Please note that all figures in the file are in AED.

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