Business Day
*Nzimande steps in to rescue university* *Bekezela Phakathi, Business Day, Johannesburg, 3 November 2011*CAPE TOWN --- Higher Education and Training Minister Blade Nzimande said yesterday that Walter Sisulu University (WSU) was "technically bankrupt" and his department had approached banks for assistance.
Speaking at a press briefing in Parliament, Mr Nzimande also announced that Prof Lourens van Staden had been appointed administrator of the embattled university. Prof van Staden is the deputy vice- chancellor for teaching, learning and technology at Tshwane University of Technology (TUT).
WSU sank further into crisis last month when a memo was sent out to all of its 2000 staff telling them that October salaries would not be paid. The university's pay day falls on the 15th of every month, but its "inability to raise sufficient capital" meant it would not pay salaries.
However, staff were paid a few days later when the Department of Higher Education and Training intervened.
Mr Nzimande said that despite being "technically bankrupt", the university could be rescued. WSU is the third university to be put under administration this year, after the department intervened at TUT and the University of Zululand.
WSU was formed in 2005 from the merger of Border Technikon, Eastern Cape Technikon and the University of Transkei.
Mr Nzimande said the merger could have contributed to the crisis. "In merging three institutions, two of which where technically bankrupt, without perhaps making adequate financial provisions ... that in itself contributes to the problem."
The department had in the past few years alerted WSU about its deteriorating financial position.
Higher education and training director-general Gwebs Qonde said yesterday that university salaries would be paid because the department had approached financial institutions. "We have engaged with the banks and we have been given an assurance that there is no problem in making funds available to address this situation," Mr Qonde said.
"But they will want a guarantee that a responsible person, in their view in the form of an administrator, would actually be there and take responsibility for managing the institution."
He would not reveal the size of the bail-out the department was seeking from banks, saying: "We do not know how much is required to take that institution out of its operational challenges. That determination will be made by the administrator." The university has a salary bill of about R68m.
Mr Qonde said administrators of the National Student Financial Aid Scheme had indicated that they would not put further funds into the institution as it was "too risky". "They would rather wait for a moment when there would be a guarantee that the administrator would actually be there and put systems in place to manage the funds that they would be putting into the coffers of the institution," he said.
Centre for Education and Policy Development director Martin Prew echoed Mr Nzimande's view that the university's problems could be ascribed to the merger of three historically disadvantaged institutions. He said the university needed "very good" admission and fee systems.
[email protected] *From: http://www.businessday.co.za/articles/Content.aspx?id=157678* ** ** ** -- You are subscribed. This footer can help you. Please POST your comments to [email protected] or reply to this message. You can visit the group WEB SITE at http://groups.google.com/group/yclsa-eom-forum for different delivery options, pages, files and membership. To UNSUBSCRIBE, please email [email protected] . You don't have to put anything in the "Subject:" field. You don't have to put anything in the message part. All you have to do is to send an e-mail to this address (repeat): [email protected] .
<<inline: BusinessDay.gif>>
