October 26, 2010

Need of Central Law to Regulate Fees in Unaided Schools - Ms. Sonia Gandhi Chairperson NAC asks HRD Minister to look into AIPA Demand

NO. 334/US/2010-NAC
Government of India
NATIONAL ADVISORY COUNCIL
2, Moti Lal Nehru Place,
Akbar Road, New Delhi.

The undersigned is directed to forward herewith letter dated 31.07.2010 from Shri Ashok Agarwal, National President, All India Parents Association, addressed to the Chairperson, National Advisory Council, requesting to make necessary recommendations to the Government of India to bring a Central Law to regulate fees and other charges in unaided schools all over the country.
It is requested that you may kindly look into the matter as appropriate.

Sd/
(S. Ravi)
Under Secretary to the Govt. of India
Tel: 23062585
FAX: 23062599

Officer on Special Duty to Minister of Human Resource Development, Government, Government of India.
U.O. No. PS-CP/1/2010-NAC dated 27.8.2010

Copy to: Shri Ashok Agarwal, Advocate, National President, All India Parents Association, Agarwal Bhavan, G.T. Road, Tees Hazari, Delhi-110054
Sd/
(S. Ravi)

Letter submitted by AIPA to Chair Person NAC (GoI)

ALL INDIA PARENTS ASSOCIATION
AGARWAL BHAWAN, G. T. ROAD, TIS HAZARI, DELHI-110054

To
Smt. Sonia Gandhi,
Chairperson,
National Advisory Council,
Government of India,
2, Moti Lal Nehru Marg,
New Delhi-110001

Subject:- Request for recommendations to the Central Government to bring a Central Law to check arbitrary fee hike in unaided private schools all over the country

Respected Madam,
We have the honor to bring to your kind notice that the common man in this country is unable to provide quality school education to its child because of the fact that on one hand, the government schools by and large lack basic physical and academic infrastructure and suffers from cruel mismanagement resulting in inferior quality of education and on the other hand, the good quality unaided private schools mercilessly exploit the parents and the students by subjecting them to arbitrary, unjust and exorbitant fees and other charges. In other words, the common man is a victim of the State designed situation.
It is submitted that the Apex Court has again and again re-affirmed the law of the land that the capitation fee, exorbitant fee, profiteering, commercialization of education and exploitation of parents/students by the unaided private schools are impermissible in law and the Government has not only the powers but also the duty to regulate fees and other charges in these schools to prevent commercialization of education. However, the issue is that there is a total absence of legal framework in the country to control and regulate the unaided private schools in the matter of fees and other charges. The only exception is: Tamil Nadu Schools (Regulation of Collection of Fee) Act, 2009 (In short, Tamil Nadu Act, 2009) but it is limited to the State of Tamil Nadu. The parents and the students all over the country have been agitating against the Governments’ failure to curb commercialization of education in the unaided private schools. The need of the hour is to have a central law to regulate fees and other charges in these unaided private schools all over the country, may be, on the lines of the Tamil Nadu Act, 2009.
It is submitted that after the Hon’ble Supreme Court’s Order of 11.05.2010 dismissing Special Leave Petitions of several Unaided Private Schools of the State of Tamil Nadu challenging the Madras High Court Judgment of 09.04.2010 upholding the constitutional validity of the Tamil Nadu Schools (Regulation of Collection of Fee) Act, 2009 and The Tamil Nadu Schools (Regulation of Collection of Fee) Rules, 2009, the Central Government should have brought a national law immediately on the lines of Tamil Nadu Act, 2009 to check the menace of commercialization of education in unaided private schools all over the country and to protect the hapless parents and students from such exploitation. However, the Central Government has not done any thing so far in this regard.
A Division Bench of the Madras High Court has delivered a landmark Judgment on 09.04.2010 dismissing all the writ petitions challenging the constitutional validity of Tamil Nadu Act, 2009 by holding that the scheme of the Act is in consonance with the law laid down by the Apex Court, and it by and large strikes a balance between the autonomy of the institutions and measures to be taken to prevent commercialization of education. “There are sufficient guidelines in the statute for either approving or fixing the fees. The procedure prescribed provides for appropriate opportunity to the managements. The Committee is headed by a retired High Court Judge. The minority institutions have also to maintain non-exploitative terms as held in P.A.Inamdar’s case. The impugned Act, therefore, cannot be said to be in any way in violation of Articles 19(1) (g) and 26 and 30 of the Constitution of India”, said the Hon’ble Judges.
The Tamil Nadu Act, 2009 was enacted in the backdrop of the fact that in the State of Tamil Nadu, there were about 5500 Nursery/Primary Schools, 4100 Matriculation Schools, 38 Anglo Indian Schools and 500 State Board Schools of Tamil Medium totaling to 10, 148 schools which were unaided. There was no uniformity in their fee structure and on the face of it large numbers of them were charging very high fees, which could not be justified. The Madras High Court while deciding the case has also taken note of the fact that the Government has placed on record considerable material showing that private schools charging exorbitant fees. The High Court has further taken note of the fact that large number of representations have been made by the Parents’ Associations all throughout the State against charging of high fees by particular schools and the news reports of agitation by parents at different places. It was, therefore, felt necessary to regulate their fees.
The salient features of the Tamil Nadu Act, 2009 are: (a) The Committee constituted under Section 5(1) for the purpose of determination of the fee shall be headed by a retired High Court Judge. (b) The Committee has to call upon the private institutions to place before it the proposed fee structure of the institution with all relevant documents and books of accounts for scrutiny within the period to be indicated by the Committee in the given notice. (c) After the receipt of the proposal from the concerned institution, the Committee has to verify as to whether the fee proposed by the Private School is justified and it does not amount to profiteering or charging of exorbitant fee. (d) In case the Committee is of the view that the fee structure proposed by the institution appears to be correct, taking note of the various facilities provided and that there was no profiteering or collection of exorbitant fee, it has to approve the fee structure. (e) In case the Committee is of the view that the fee structure forwarded by the institution is exorbitant and that there is an element of profiteering, the Committee has to determine some other fee. (f) While fixing some other fee, the Committee has to follow certain procedures taking into consideration the factors as found mentioned under Section 6(1) as well as Rule 3 of the Rules. (g) The determination of the fee as made by the Committee should be intimated to the concerned institution and there upon the institution has got a right to submit their objections within fifteen days. (h) The objection so submitted by the institution shall be examined by the Committee. The Committee has to consider it objectively. The Committee was not expected to reject the objection summarily. As per Section 7(4), the Committee shall have the powers to regulate its own procedure in all matters and it shall have all the powers of a Civil Court under the Code of Civil Procedure, 1908 regarding summoning and attendance of witness and related matters. Therefore, the Committee would be within their powers to get the factors verified in respect of the claim made by the institution, to approve their fee structure, as against the fee determined by the Committee. (i) The fee so prescribed would be in operation for a period of three years and at the end of such period, it would be open to the institution to make an application for revision of fees. (j) Under Section 3(2) no fee in excess of the fee determined by the Committee shall be collected in a private school and the punishment provided for contravention thereof is imprisonment for a term which shall not be less than three years but which may extend to seven years and with fine which may extend to five thousand rupees and the Court may, for any adequate and special reason to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than three years. (k) The person convicted shall refund to the pupil from whom the excess fee was collected, such excess fee.
The Madras High Court in Para 21 of the Judgment noted, The observation of the Supreme Court was against the Government fixing the rigid fee in respect of private institutions. The impugned Act, in no way fixes the rigid fee. It only calls upon the management to forward their fee structure with details as to how they arrive at such a fee structure. The main idea is to see as to whether under the guise of collection of fees they are indirectly collecting the capitation fee or indulging in profiteering. That is why the Act initially uses the term Approval of the fee structure and only in such cases where the committee is of the view that the fee structure proposed is exorbitant and is in the nature of capitation fee or profiteering, it intervenes in the matter and for the purpose of fixing the correct fee, the private institution is given liberty to specify their fee structure, taking into account the expenditure necessary for running the institution as well as its future needs. Thus, it proceeds to determine the fee structure thereafter. In that process, it considers the objections given by the management to the fees proposed by the Committee. The consideration of objections by the Committee cannot be treated as an empty formality. The Committee has to consider the objections made by the institution in an objective manner and if necessary, by inspecting the institution and calling upon the management to produce the records in their possession in respect of various facets and to arrive at a decision as to whether the fee determined by the Committee was the correct one or it requires modification. It cannot be ignored that the committee is a high powered committee headed by a retired High Court Judge.
The Madras High Court in Para 35 of the Judgment while dealing with the contention of one of the petitioners that the Act runs counter to the policy of ‘common school system’ noted, ‘As can be seen from the judgment in T.M.A. Pai’s case and other cases, the Apex Court has taken cognizance of the fact that private contribution in the field of education is necessary, and Government is not in a position to have sufficient resources for providing education to all. If that is so, it is difficult to bring about a common school system. The Right to Education Act does not prevent private schools. The only thing, which is possible to be realized, is to bring in legislation of fees structure and to check exploitation in private schools, which is sought to be brought about and that being so, the Act cannot be criticized on that score.
The Madras High Court in Para 36 of the Judgment while commenting on the reservation of 25 percent seats in the private schools for the children belonging to poor strata of society noted, The Constitution (86th Amendment) Act, 2002 has made elementary education a fundamental right under Article 21-A of the Constitution of India. The right to free and compulsory elementary education was a long felt need, which has now been given the status of a fundamental right. The Right of Children to Free and Compulsory Education Act, 2009 which came into force from 1st April 2010 was a consequential legislation to translate the constitutional intent into action. The RTE Act, 2009 provides for 25% seats in private schools for children from poor families and prohibits donation or capitation fee. Though the RTE Act is Central Legislation, its effective implementation lies in the hands of the State Governments. While implementing the RTE Act from 1st April 2010, the Government of India announced that 25 percent reservation for children from economically weaker sections of the society would be operational from Class I with effect from the academic year 2011. The present impugned legislation if examined in the context of Article 21-A of the Constitution of India and RTE Act is also valid.
It is submitted that in 1997, on the pretext of 5th Pay Commission Recommendations, the unaided private schools in Delhi increased fee and other charges ranging from 40% to 400%. This gave rise to unrest amongst the middle class parents and the parents organized themselves against the arbitrary fee hike by the unaided private schools. Needless to say that a PIL was filed in 1997 in the Hon’ble Delhi High Court which was decided on 30.10.1998 in favour of the parents. The High Court laid down the criteria and guidelines of fixing a reasonable fee structure in an unaided private school. The High Court also held that the Government is not only empowered but also has a duty to regulate fee of such schools to prevent commercialization of education and exploitation of parents/students. The schools filed appeals before the Hon’ble Supreme Court against the High Court decision which was dismissed on 27.04.2004. The schools took another opportunity through filing a review petition before the Hon’ble Supreme Court seeking review of Supreme Court decision of 27.04.2004. Fortunately, the Supreme Court also dismissed the review petition on 07.08.2009 reasserting that the fee has to be justified and not arbitrary and there has also to be accountability and transparency.
In 2008, on the pretext of 6th Pay Commission Recommendations, the unaided private schools all over the country hiked fee and other charges exorbitantly and arbitrarily while Central and State Governments were just mute spectators to the same. This time, the parents all over the country organized themselves to a larger extent and openly protested against the schools and the Governments. The parents associations in many parts of the country approached their respective High Courts by way of filing writ petitions. The agitation by the parents forced some States to constitute committees to look into the issue of the arbitrary fee hike. The Government of Delhi constituted S.L Bansal Committee, the State of Maharashtra constituted Kumud Bansal Committee and the State of Goa constituted D.P.Pednekar Committee. It is respectfully submitted that all these Committees in the absence of examining the financial records of each school to determine whether the fee hike was justified or not by applying the principles laid down by the Supreme Court in Modern School case, just ended up in making unsound and illogical solutions.
The Tamil Nadu Act, 2009 is providing solution to a larger extent. However, the application of the said Act is limited to the State of Tamil Nadu. In all other States, practically, there are no laws to deal with the fee hike problems. All India Parents Association (AIPA) has since long been demanding a Central Law to deal with the issue of commercialization in unaided private schoolthe Central Government has not taken any step in this regard so far. The public interest demands that the Central Government must immediately enact a Central Law may be on the lines of the Tamil Nadu Act, 2009 to check the rampant commercialization of education in unaided private schools all over the country. We need of have a uniform law for all over the country as the problem of exploitation of parents and students by the unaided private schools all over the country is more or less the same.
It is submitted that the Constitution of India mandates the State to provide free and compulsory good quality elementary education to all the children up to the age of fourteen years. It may be kept in mind that this fundamental right of every child of this country is an independent right of every child and does not depend upon the socio-economic status of the parents. It is submitted that the unaided private schools are only extended hands of the State and therefore, they are also obliged to provide free education to the children. Unfortunately, such a constitutional mandate has remained elusive all through. On the other hand, the students and the parents are being virtually looted by the greedy school managements under the patronage of the Governments. Thus, the child rights violation is rampant.
In view of above facts and circumstances, it is requested that you may kindly look into this matter on urgent basis and make necessary recommendations to the Central Government to bring a central law to regulate fees and other charges in unaided private schools all over the country.

With regards,
Ashok Agarwal, Advocate
National President, AIPA

October 22, 2010

TN publishes fee structure of schools on website

CHENNAI: Bowing to the demands of parents and activists, the state government has published the fee structure details of all unaided schools in the state, as prescribed by Justice Govindarajan Fee Committee on Thursday.

The details of 10,233 schools have been put up on the state government website www.tn.gov.in in the What's New' section. Names of the 701 schools that did not respond to the questionnaire from the government asking for their current fee details, based on which the committee had made the recommendations, were also put up. The committee had said that as these schools had not disclosed the relevant details, they should not collect any fees this year.

On Monday, a legal notice was sent to the Tamil Nadu government by State Platform for Common School System, which asked it to publish the fee structure of all schools on the website, saying that "unless parents are made aware of the fee structure ordered by the said committee for the schools, they would not be in a position to file any complaint against the schools violating the orders of the high court."

Parents of students in various city schools have been protesting against schools for several months now, asking them to reveal the fee structure prescribed by the government-appointed Fee Determination Committee. On Wednesday, parents of CSI Jessie Moses School in Kilpauk, CSI Bains School in Anna Nagar and Alpha Matriculation School in CIT Nagar approached the chief educational officer and requested him to insist that the respective schools put up the fee structures on
the notice board.

P B Prince Gajendra Babu, general secretary of the State Platform for Common School System, said, "Now parents have access to the fee structure. But not all parents will be able to access the Internet to get these details. To make it available to all stakeholders, the school education department can release a booklet containing these details. It has been done before. In 1994 the department released a directory of schools that were recognised in the interest of students."

The Madras High Court has ruled that schools that have collected fees in addition to that prescribed by the committee should consider the excess amount as deposit till the committee releases the revised fee structure in four months. As many as 6,500 schools in the state had objected to the fees prescribed by the committee and applied for a revision.

http://timesofindia.indiatimes.com/city/chennai/TN-publishes-fee-structure-of-schools-on-website/articleshow/6789601.cms

To download the document click on
http://www.tn.gov.in/departments/sedu/priv_Sch_Fee.pdf

October 21, 2010

School Deregulation: An Erosion of trust

In its most recent report on the education sector, IDFC SSKI quotes Union HRD minister Kapil Sibal as saying: “We cannot have companies listed on the stock exchange to run educational institutions and pay dividends to shareholders from the fees parents pay. We cannot allow education to be subject to risk factors.” But it’s happening, whether it’s a listed company or, in several cases, a non-profit trust.

In its steadfast, principled intentions, the trust model works. Paul Machado, principal of Campion School , a private ICSE board school in South Mumbai, is against privatisation of education, as he feels it is not a commercial activity. “Our charitable trust collects tuition fees to maintain the institute,” he says, adding that he fails to understand why some schools would need to outsource their management and operations. “These are the loopholes in the system that lead to corruption,” he says.

But there are others who say it is na├»ve to believe in the trust model anymore. Madhav Chavan of Pratham likens the current non-profit trust structure in schools to prohibition: it encourages illegal trade and manufacturing, people still drink, and the only loss is that of tax revenues for the state. “It’s hypocrisy to say schools can’t make profits,” says Chavan. “Everyone ultimately makes money except the government.”

It’s why many educationists say deregulate the sector and do away with the non-profit trust structure. Allow management companies to bring in private capital, which can enable more and better schools. “It is better to regulate schools by allowing them to be profit-making,” says Chavan.

This, he says, will make the system more transparent and draw in private capital.One of the ways the government can regulate schools is through the recent quota system, wherein all schools are required to enrol 25% of students from the weaker sections.

http://economictimes.indiatimes.com/news/news-by-industry/services/education/School-Deregulation-An-Erosion-of-trust/articleshow/6783997.cms

Money in the Classroom

Earlier this month, Career Point Infosystems , a Kota-based tutorial service provider, had a dream debut on the bourses. Its shares more than doubled on listing, and the company raised 115 crore from its initial public offer (IPO). The overwhelming investor response was as much a comment on Career Point’s old business, tutorials, as it was on its new business, schools.

The concept of schools as a business is at odds with the government’s stated position on the issue. Saying schools shouldn’t be run like a business, the government mandated a ‘trust’ structure for all schools from kindergarten till class 12, or K-12 schools. So, only non-profit trusts can operate schools; and if a trust has a surplus, it has to reinvest it in the school it runs. At least on paper.

In reality, there are ways and ways to take money out of a school. The surplus of a trust can’t flow out, but money can flow out on the pretext of payments — real or fictitious — for services provided to the school. “It’s been happening all these years,” says Madhav Chavan, CEO and president of Pratham Education Foundation, a voluntary organisation focused on educating underprivileged children in India.

Increasingly, it’s getting organised. Companies and investoare hooking up to devise business models that are legal, but are
morally ambivalent in the present construct of the law. The essence of these business models is companies providing services to schools — for example, leasing a building or managing its operations — in return for a fee. That fee is negotiated between the trust and the company; in dealings that are not at arm’s length, this arrangement makes a mockery of the trust structure.

For companies and investors, it is making available an increasing chunk of the schools segment — $20 billion, and growing at 14% a year, according to Kaizen private equity’s education report. Suddenly, schools have become big business. In 2010, till August, private equity funds had invested $168 million into the sector through 14 deals, according to VC Circle, an investment research firm tracking private equity, M&A and venture capital (See table: Going to School).

It’s a stable business, as children tend to continue in one school till they graduate. And it offeterrific growth. “Only 40% to 50% of the 360 million population below the age of 20 is enrolled in a primary or secondary school. In higher education, just 10% are,” says Rashi Prasad, associate director — strategic and commercial intelligence, transaction services at KPMG India. Sorting out the farce of trusts or allowing for-profit schools is another debate, one that is unlikely to be
resolved soon given its sensitive nature (See box: An Erosion of Trust).

Meanwhile, companies are nudging their way past the regulatory network using two business models. They are also tapping two other business models in which there is no ambiguity on their presence.

The Manage Model
In what is the most common model, companies provide services related to the day-to-day running of schools to those that don’t have the capabilities or resources. So, companies train and supply teacheto schools, manage transportation, supply textbooks and uniforms, and design curricula, among other things. They call themselves ‘school management companies’.
Most school management companies provide one or a few of these services to a school. Then, there are some that provide end-to-end services like K-12 Techno Services in Andhra Pradesh. K-12 earns a management fee, which is a proportion of revenues the school earns from students. In just eight months of operations, K-12 Techno has earned 22% on its investment. When 32-year-old Maguluri Srikanth started the company, he struck gold without even taking off. Mr Srikanth placed a small advertisement in a local newspaper asking schools to contact him if they needed help running their institutions. The response was stunning. “Within three days, 190 private schools in Andhra called us,” says Mr Srikanth.

Today, K-12 manages 64 institutions — 53 schools (till class X) under the brand name Gowtham Model Schools, and 10 junior colleges (grades 11 and 12) and one international school under the brand name Orchids. “In two months, we will engage with 20 more institutions,” says a proud Mr Srikanth. It took Mr Srikanth and his family two yeato build their business model. They got help, strategic and financial, from two venture capital (VC) funds, Sequoia Capital and Song Investment Advisors. The two VCs invested 68.5 crore in K-12 in January. “It took us two yeato get Sequoia and Song on board,” says Mr Srikanth.

KP Balaraj, managing director of Sequoia, refuses to elaborate on the business model. “We have spent a lot of time on this and want our competitoto come up with their own model,” is all he says. Another company that has got into the school management business is TutorVista.com, which began as an online-education company four yeaago. It’s a highly profitable business, says founder and CEO K Ganesh. “After the initial years, once the classrooms get filled up, schools give a profit margin of 50%,” says Mr Ganesh.

TutorVista conducts its schools business through the brand name Manipal K-12 Education, in which the holding company of the Manipal Education and Medical Group is an investor. Manipal K-12 taps schools in two ways. One, it provides computers, projectoand technical equipment to 3,000 schools, including four in Nepal. Two, it manages schools —
currently, 13 in Hyderabad, Pune, Manesar (in Haryana), Mangalore, Bangalore and Manipal.

In the past four years, TutorVista has raised $37.25 million, in three rounds, from Sequoia, Lightspeed Venture Partners , the Pearson Group, and the Manipal Education and Medical Group. The company is in the process of raising another $50 million, says Ganesh, most of which will go into its schools business.

The Build Model
Then, there’s the lease model: construct a school building, lease it out to a non-profit trust, and collect the rentals. Take Career Point. While it manages schools, its fully-owned subsidiary, Career Point Infra, provides construction services for building schools. Since it builds and manages, Career Point is effectively running schools. Had it done so under the trust structure, it wouldn’t have been able to take out profits.

But by becoming a service provider, while retaining the trust format, it is able to capitalise on the growth and profitability the K- 12 segment offers. And the 115 crore raised through the IPO give it funds to scale up. “We raised funds to get into formal education and increase our pan-India presence,” says Pramod Maheshwari, managing director of Career Point.
Like TutorVista, Career Point started off as a tutorial services provider in 1993. It provides coaching for entrance exams. The company has 33 study centres across 12 states in northern, central and eastern India. It has covered about 200,000 students though its tutorial and school- management services. In 2007, Career Point raised external funds for the first time, with Volrado Ventures, an Indian venture capital Fund managed by the Enam Group, investing 5 crore.
In 2009, Franklin Templeton Private Equity invested 50 crore. This January, NS Raghavan, one of the seven foundeof Infosys Technologies , put in 10 crore. “There’s a huge demand-supply gap in education,” says Maheshwari. “It’s a huge opportunity for companies.”

Career Point, which posted revenues of 68 crore in 2009-10, is positioning itself as a one-stop shop for both schools and colleges. So, the company can be an architect: help clients with concept planning and location survey. It can be a consultant: conduct a project feasibility study and advise clients on getting government approvals. It can be a builder:
construct the building. And it can be a manager: manage the educational institution.

The lease model needs capital. It’s a bit like a real estate company building an office complex, leasing it out, and recovering the investment over seven to 10 years. Another listed company taking a similar route as Career Point is Everonn Education . Three months ago, Everonn sold 23% stake to Nikhil Gandhi, group chairman of SKIL Infrastructure, for 225 crore. “We are looking to enter the K-12 schools segment and are looking for partnewho will put in money,” says P Kishore, managing director of Everonn.

On his part, Gandhi had been waiting for a launching pad into education for the past 15 years. His attempts at starting an education knowledge park around 1992, in Mumbai’s outskirts, were thwarted by the government, which didn’t give him regulatory approvals. A few months ago, Gandhi spotted his opportunity. “Everonn has domain knowledge and has reached scale,” says Gandhi. “We wanted to leverage their strength with our infrastructure company to build schools.”
SKIL will provide Everonn infrastructure support to build schools, while Everonn will manage them for the non-profit trusts. “Over the next four years, I will have the opportunity to invest $4 billion more,” says Gandhi. He has plans to tie up with premier foreign universities and to scale up the Everonn schools business.

The For-profit Model
Education is a state subject. So, though the central government advocates a non-profit and trust model, the final call rests with the states. Haryana, for instance, allows for-profit schools that follow the ‘international baccalaureate’ curriculum. That led Prashant Jain to diversify from exporting marble to running a school in Gurgaon, Haryana. Through his holding company, Sarla Holdings, Mr Jain floated Pathways World School , a for-profit IB curriculum school. And he found takers. Pathways has received an investment of $30 million from the $225-million Reliance Private Equity, fund. ”We liked this sector very much as its growth is far higher than that of the economy,” says Reliance PE CEO Ramesh Venkat.
Mr Jain, who is a director in the school, says Pathways earns an operating margin of about 55%. Adds Mr Venkat: “We expect a return on investment of 25-30%. We see a waiting period of four to five yeafor an exit opportunity.”

The public-private partnership Model
Some states are inviting private companies to bid for tendeto run public schools on the PPP model. The state government asks private companies to bid for a project on the premise that any viability gap funding — the period between setting up the school and starting operations, till it can break even — will be borne by the government. The organisation that quotes the lowest viability gap wins the bid. The government provides the land, and the private player builds and runs the school
on a 25-to-30-year lease.

In July 2010, the Rajasthan government invited bids for 50 schools. One of the shortlisted candidates is IL&FS Education and Technology Services (IETS), the education arm of IL&FS, the infrastructure and financial services company. IETS provides content and teacher training, and upgrades school infrastructure. RCM Reddy, managing director of IETS, defines his business as one that will cater to the needs of students, from pre-primary to graduate levels and everything in between. “Next year, we will enter into managing schools,” says Mr Reddy. But unlike the others, Mr Reddy is playing safe, choosing the PPP model. “This is the only way to get out of any uncertainty in this area,” he says.

This January, India Equity Partneinvested 170 crore for a 28% equity stake in IETS. “We are introducing them to other companies to form alliances or go in for acquisitions,” says KK Iyer, managing director of IEP. Both the investor and IETS are very clear about where they’re going, though. “Education companies command an attractive valuation in the market,” says Mr Reddy. Iyer feels an IPO is the most obvious exit in this sector. “In three to four years’ time, the company should be large enough for an IPO.”

Opportunities aside, the regulatory risks in the schools business are real. Admits Balaraj of Sequoia: “There is significant regulatory risk and business-model risk.” He feels a lot of capital will be invested in the education sector in the hope that regulatory risks will get sorted out. “This may not happen in the near future,” adds KPMG’s Prasad. Not all avenues of investment in the education space are unsafe. In verticals like pre-schools, vocational training, coaching classes, e-learning and test preparatory classes, regulations allow education companies to run as commercial entities. SAIF Partners, a foreign private equity firm, takes this distinction seriously.

“As foreign investors, we want to subscribe to the letter and spirit of the law, and our focus is vocational training,” says Vibhor Mehra, principal, SAIF Partners. But elsewhere, companies, private equity playeand, increasingly, small investoare laughing their way to the bank by going to school.

http://economictimes.indiatimes.com/news/news-by-industry/services/education/Money-in-the-Classroom/articleshow/6783962.cms?curpg=1

October 18, 2010

GoAP decides to control Intermediate fee & shy's away from School fee ?

SAKSHI | 17.10.2010 | Page6 | www.sakshi.com

October 6, 2010

Parents to certify fitness of school buses

HYDERABAD: The transport department has made it mandatory that both parents’ committee and the school management should jointly verify fitness of school vehicles every month. The decision was taken after recent instances of mishaps involving school and college buses.

The provision was included by the transport department as guidelines issued for educational institution vehicles. After verification, both of them are expected to record their findings in a separate register meant for this purpose. Besides, a separate complaint book shall be made available by the principal. The principal concerned should also go check it at the end of every month and take necessary action.

Principal secretary (Transport department) SP Singh said a school/college bus should carry a list which mentions the names of students, their class, residential address and route plan. “The bus driver should not be more than 60 years of age. Managements should maintain a health card for each driver which must contain details of his eyesight, blood pressure and sugar level in each quarter,’’ SP Singh said in a order.

From now on, it is mandatory for the school management to appoint a driver only after confirming whether he has a genuine driver licence by cross-checking with Regional Transport Authority (RTA) officials. Every bus should have its name, address, telephone or mobile number printed on the rear of the vehicle. Doors should be fitted with a safe locking system.
Officials said these guidelines would be implemented after 30 days with suggestions and objections from various stake holders taken into consideration.

http://expressbuzz.com/cities/hyderabad/parents-to-certify-fitness-of-school-buses/212699.html

October 2, 2010

Parents from all over the State to participate in protest meeting on October 9

A group of parents protested outside two city schools on Wednesday. Parents of students going to SBOA Matriculation School in Anna Nagar and Gill Adarsh Matriculation School, Royapettah, insisted that the managements reduce the second term fee and the State government intervene in the matter.
This has become a rather common scene in the last few weeks, outside several city schools, with protests intensifying especially after the interim order of the Madras High Court staying the decision of the Private Schools Fee Determination Committee, headed by former judge of the Madras High Court Justice K. Govindarajan. The final hearing of the case has been scheduled on November 29.
E. Krishnakumar, president of the Parent Association of SBOA Matriculation Higher Secondary School, said: “School managements are not only increasing the second term fee, but are also silent on whether they would return the excess fee collected.” Several parents associations have come together to form the Federation of Parent and Student Welfare Associations in Tamil Nadu.

Addressing a press conference in this connection on Wednesday, S. Arumainathan, president of the Federation said: “The government has been silent all through. The implementation of the Govindarajan Committee's recommendations has been very poor right from the beginning,” he said. General Secretary of the Federation L. Shanmugasundaram said parents from all over the State would gather in Chennai on October 9 for a protest meeting in this connection. P.B. Prince Gajendra Babu of the State Platform for Common School System, also a member of newly-formed Federation, said that right from the beginning, there was no clarity on the issue.

 “First the Govindarajan Committee prescribed the fees. Some schools sought revision. The committee implied that while the revision might need time till next year, schools would have to collect only the prescribed fee until then. It was all very ambiguous,” he said.
“Now, the government may cite the recent interim order of the Madras High Court as reason for its inaction, but it was not active even before that,” according to N. Karthikeyan, member of the Federation.  The School Education Department had earlier said that it would put up the fee structures prescribed by the Committee on its website. “Schools were also expected to put up the fee prescribed for them on the notice board. Neither of these happened,” he added.

P. Solomon, vice-president of the newly-formed Parents' Association of C.S.I. Jessie Moses Matriculation Higher Secondary School in Anna Nagar, says that last year too the management had increased the fee in the second term of the academic year.
“They have done the same thing this year too, but it was the Committee's revised fee structure for the school that made us parents feel that we had a right to raise our voice on what we thought was unjustified hike by the school,” he says.
CBSE schools. Amid all this noise, CBSE schools do not seem to figure anywhere. According to the head of a CBSE school in Kilpauk, though a questionnaire was sent and the school filled it, the institution did not hear from the Govindarajan Committee after that. The entire exercise by the Private Schools Fee Determination Committee has brought in utter confusion among schools and parents, according to Sheela Rajendra, correspondent, Padma Seshadri Bala Bhavan Group of Schools.

Schools also feel that the Committee could not possibly have done justice to the fee determination exercise in such a short period. “There were lots of areas where schools wanted to give more details, but there was little scope in the questionnaire. This exercise cannot be completed in two-three months and was not carried out in a detailed fashion,” she adds.
Meanwhile, members of the Students' Federation of India protested on the DPI campus on Wednesday, demanding that the State government go for an appeal in the case.
All India Joint Secretary of SFI G. Selva said: “Parents and students are being fleeced and the government is simply remaining silent, despite protests by parents every day.” The SFI also said that if the School Education Department does not take steps to speed up things, the organisation would protest outside offices of all the Chief Educational Officers soon.

http://www.thehindu.com/news/cities/Chennai/article777465.ece