State's new plan to pull public universities out of choking debts

To save the institutions, authorities have outlined a raft of measures among them a change in funding formula, adoption of renewable energy to cut costs on electricity bills which account for the biggest expenditure, reserving 30 per cent of government consultancy services to universities, commercialising university research and entering into private-public partnerships to improve on infrastructure.

Change in funding is touted to be the remedy to chronic financial woes in most public universities. State technocrats on Friday painted a gloomy picture of how the current funding model drove universities into debt.

The model entails the government paying 80 per cent of student fees admitted under government sponsorship while students would use a student loan issued by the Higher Loans Board (Helb) and direct fees paid by a parent or guardian to clear the remaining 20 per cent.

This model is commonly referred to as the Differentiated Unit Cost (DUC). However, it is emerging that both the government and the students have not been paying the expected amount.

For the government, explains University Fund Chief Executive Geoffrey Monari, inadequate cash is allocated to pay for the government-sponsored students despite the number of students growing rapidly.

This has in turn compromised the initial plan for the government to cover the 80 per cent tuition fees for students admitted under the government-sponsored programme.

However, this alone will not be enough to tackle the current debt according to the University Fund boss. "We are looking at diversifying the revenue streams in universities, from a single revenue stream from grants to government-sponsored students and it was becoming very difficult because vice-chancellors were always lobbying to be supported using more money," he said.

Other reforms

The University Fund proposes that higher institutions of learning will be required to enter into public-private partnerships to improve their infrastructure. For example, Monari says the institutions would need to use such a model in the construction of hostels for their students.

A popular model, Build-Operate-Transfer, has been suggested for this project, where the university provides land for a private investor to build a hostel facility and they will be allowed to operate it for the agreed number of years to recoup their investments and then transfer it to the university.

Another proposal is for universities to cut down on sourcing electricity from Kenya Power and instead build capacity to generate their own power.

Power cost, Monari indicates, has been one of the major debt accumulators in universities; thus suggests investment into renewable energy such as solar power to be utilised by the institutions.

Cutting down on this expense, Monari says will not only save millions from universities but also could be turned into an income-generating activity.

"Strathmore University is a good example. They not only generate their own power but if you look at the list of independent power suppliers to the KPLC, you will find that they are there," Monari said.

An additional area the universities have been encouraged to tap into is consultancy services. This, Monari suggests, will be done by academic staff of various institutions as they are equipped to provide the expertise required in various sectors.

Monari noted that they are lobbying government institutions to make exclusive reservations for consultancy services to public universities. This way, State agencies will be compelled to use universities when they seek consultancy services.

"We are lobbying so that universities will be able to provide consultancy at maybe 30 per cent of government services," he revealed. Moreover, universities will be required to commercialise their research projects to attract funding.