DUBAI // One of the largest school networks in the country, Gems, has suggested that it may have to close some of its Asian schools unless the Government lifts caps on tuition fees so it can cover growing expenses. Faced with substantial increases in rent, salaries and other operating costs, the Global Education Management Systems (Gems), which runs 11 schools teaching the Indian CBSE and CISCE curricula, may close the schools that are losing money, said Dr FA Wasil, director of the network's Asian schools sector.
The warning is the latest move in an ongoing tug of war between the Ministry of Education and private schools over rising school fees. It offers the other side of a growing argument over the fee increases parents have faced this year. "There has been a quantum jump in the economy in Dubai," said Dr Wasil. "If you look at the growth over the past three to four years, there has been an abnormal increase in every sense. But school fees have not corresponded."
The ministry has capped tuition fee increases at 30 per cent over three years, but Gems and other schools insist that tuition increases are necessary to cover rising costs. Not-for-profit schools, such as the American Community School in Abu Dhabi, which charges Dh59,650 (US$16,240) for grades 11 and 12, raised tuition by 15 per cent this year. The school has never increased fees by more than six per cent in a single year. But as The National previously reported, it raised fees due to rising operational costs coupled with school expansion.
The British School-Al Khubairat, another not-for-profit school in Abu Dhabi, also raised tuition fees this year. "We have a real spike in accommodation costs," said Paul Coakley, the school's principal. "Because we are effectively paying sterling salaries, we've had a real spike in salary costs. The third spike is the very significant rise in capital costs. "We are a not-for-profit organisation, so we are only interested in fee increases that will enable us to meet our educational missions, but obviously if we are to continue to invest we need to have an active dialogue that reflects these particular spikes that we're seeing." Dr Wasil said schools in his network, which charge as little as Dh2,770 per annum, have been losing money for the past few years due to the cap. Like all private schools in the Emirates, Gems, a for-profit company, depends on revenue from tuition to cover costs. Gems teacher salaries have risen by 76 per cent since 2004, a spokesman for the company said, while visa and attestation charges have increased 318 per cent. Construction costs have risen 165 per cent, and the cost of medical insurance has gone up by 26 per cent. "We have recently increased salaries in the Asian schools," said Dr Wasil. "Staff rentals [for flats] have gone up 400 per cent. If you provide health insurance for your teachers, it's huge money." To keep afloat, Dr Wasil estimates that he would have to raise fees by 150 per cent. He believes that most parents with children in his schools can afford such an increase. Rashid Salem Lakhrebani al Nuaimi, director general of the Ministry of Education, said the ministry had no plans to reconsider the current fee structure, which was put in place in July and represents a 10 per cent increase from the previous ruling. But Dr Wasil said the increase was not enough to keep some schools afloat, particularly since the ministry was introducing an accreditation programme for private schools. It would be very difficult for schools operating on low budgets to meet the ministry's standards, he said. The accreditation programme will make it more difficult to attract good teachers, Dr Wasil said, because the economies of South-east Asia are improving and teachers are demanding higher salaries to move to the Emirates. "Obviously if you want good teachers, they have to come on a better package. Better salaries can only be paid if your fees are compatible. Education is like any other business where you pay everything." The restriction on fee increases, according to Dr Wasil, makes it impossible for Gems to recoup any investments in facilities or equipment at its schools. Despite sinking revenues, Gems recently made an investment of almost Dh45 million in the boys' campus of Our Own English High School in Sharjah, where the Indian curriculum is taught to more than 9,000 pupils. "How are we going to realise this investment? When we apply for a fee increase, it's rejected," said Dr Wasil. "On one side, there is a compulsory need to provide quality education to children, which has to come with some investment; on the other hand, you are restricted in terms of your returns, so it's a dichotomy between the image and the reality." Abu Dhabi's branch of Our Own English High School last increased its fees in 1992 to Dh2,400 in KG1 and Dh3,500 in grade 10. The Al Ain branch raised fees in 2006 by 15 per cent to Dh2,770 per annum in KG1 and Dh5,770 per annum in grades 11 and 12. Sharjah raised fees by 20 per cent in 2006 up to Dh3,100 for KG1 and D6,700 in grades 11 and 12; Dubai raised fees in 2007 by 16 per cent to Dh4,000 for KG1 and Dh8,450 for grades 11 and 12. Revenue from other schools in the Gems network, some of which charge as much as Dh92,000 a year, are supporting the Asian schools. "We are running at a loss," said Dr Wasil. Referring to Sunny Varkey, the chairman of Gems, he said: "Any other businessman would have closed these schools down." Despite heavy demand for school places across the country, Dr Wasil said there was no chance of further expansion. He estimates that there are thousands of children waiting to get into Asian schools. Were Gems to start closing branches, thousands could be deprived of their education, because public schools are not open to everyone. klewis@thenational.ae
