‘50 acres of land, well-stocked library, four labs with 40 computers, WiFi facility, canteen, 3 buses, gym.’
A few months ago, this alluring offer was made to potential engineering
aspirants. The same features are being highlighted, this time, to woo
potential buyers and investors.
Engineering colleges unable to manage running costs are now attempting
to find buyers online. Heads of educational institutes say they have
been receiving dozens of emails from brokers and college promoters.
Brokers on the prowl
These professional brokers go all out to promote the ‘product’. An
online ad goes like this — ‘A Well Running Engineering College is for
Outright sale in Chennai. Approved by AICTE & Affiliated to Anna
University, Chennai, the college is running four branches with 120
students. Please inform the needy’.
The contact number was of R. Senthil, who has been handling college
buyouts for the past two years. “I was a house broker earlier. Now, I
deal in colleges with a few students,” he says.
Real-estate websites have a huge listing of engineering colleges on
sale, under the commercial land option. “B.Ed colleges are the cheapest.
They go for just Rs. 30 crore. But engineering colleges are where the
money is. We need to watch out for colleges that began in the past five
years. They are put on sale because either the owners have made enough
money from capitation without investing much, or they have lost it all,”
says R. Uppiliappan, another agent.
‘Good bargain’
He operates from a small office in Choolaimedu and hands out a pamphlet
titled ‘Best Colleges for sale’. In it is listed 11 colleges, and each
one is said to be equipped with at least 3 buses, two laboratories, 400
students, 50 faculty members. There is also a ‘negotiable price’ option
on each of them.
The US dollar is the currency of choice among several brokers. “For a
campus of 3,50,000 sq. ft. built-up area with hostel facilities for
1,000 students, the price is US $19 million. You will get 140 teaching
staff and 60 non-teaching staff in the bargain,” broker Senthil says.
Depending on the kind of assets and infrastructure they have,
engineering colleges can fetch as much as Rs. 200 crore, says
Uppiliappan. He offers another ‘vibrant college on the outskirts of
Chennai’ and gives two options.
Either an outright purchase at Rs. 180 crore by a new party or a joint
venture with an experienced team of professionals from Tamil Nadu, who
have above 20 years of experience in creating ‘top rank’ colleges. “The
college has a good name. The owners are in no hurry to find a buyer,” he
says.
Trusts too, involved
What is interesting is the fact that most of these colleges that have
put up assets for sale are non-profit institutions or trusts. Under the
existing law, assets from trusts cannot be used for profit making, say
experts.
Technically, such a sale can result only in a management change as
educational institutions are run by trusts or societies, says S.
Vaidhyasubramaniam, dean, planning and development, SASTRA University.
“If it involves financial transactions other than reasonable
compensation for services rendered by outgoing trustees, it needs to be
interrogated. The sudden spurt in such offers is due to tough
regulations, falling demand for seats and rising value of land,” he
says.
Former vice-chancellor of Anna University, E. Balaguruswamy, says, at
least 100 engineering colleges in the State are looking for buyers. “The
normal procedure to shut down a college is straightforward. The college
writes to the affiliating university after a resolution is passed in
its trust. The university first looks to transfer its students and
teachers to other colleges. Not many colleges resort to that, however,
because there is no monetary gain in it,” he says.
Going about it the right way is a hassle, some college managements say.
“The land and infrastructure, registered under the trust’s name goes
under government control. Even if someone wants to restart the college,
there is much hassle involved in getting a fresh renewal from AICTE.
Instead, what we do is find potential buyers and replace the trust with
new members. The old trust members are given a monetary compensation
based on an understanding,” says Raja Simhan, one of the trustees of a
‘college for sale’ in Kancheepuram.
SOURCE : THE HINDU
