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Tue 30 Mar 2010 07:32 AM

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GEMS schools facing closure in fees row

Schools 'driven to breaking point'; can't maintain standards with current funding - chairman.

GEMS schools facing closure in fees row
FEE CAP: The school operator has threatened closures unless it is allowed to raise fees. (Getty Images)

The chairman of Dubai’s largest school operator has threatened to close a number of schools unless it is allowed to raise fees.

Sunny Varkey, the chairman of the operator, GEMS Education, said in a letter, reported by the National on Tuesday, that some old Indian schools had been “driven to breaking point” and standards could not be maintained with current funding levels.

The letter, addressed to Dubai’s Knowledge and Human Development Authority (KHDA), comes just weeks after the authority issued a ban to private schools preventing them from raising fees.

“Consequently, it is highly likely that we will have no choice but to begin to close down unviable schools over the next two years,” the letter was quoted as saying.

GEMS runs a number of schools in Dubai, some of which are up to 40 years old and in need of repair. The firm said its operating costs have risen by 57 percent over the last six years, while tuition fees have only risen 27 percent during that time.

"That’s a 30 percent disparity. We don’t have the flexibility to be sensitive to a downturn,” Dino Varkey, senior director of business operations, told Arabian Business during an earlier interview.

“People seem to forget that education is one of two price-regulated industries in the UAE. For the last four to five years we’ve been capped on our price, while all of our costs were allowed to rise unchecked. None were subsidised.”

Varkey told the National some of his schools charge fees of around AED5,000 (US$1,360) a year, much less than the AED15,000 on average charged by new schools with the same catchment.

Mohammed Darwish, the chief of the regulations and compliance commission at the KHDA, told the paper a response to the letter was being drafted.

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Singh 10 years ago

I think Varkey Group was managing the schools very well before. GEMS is Western Education Council. If OOEH schools are hiring expensive Staff(Western Staff) for admin and Exec. Posts; Than thats their Problem. I have not seen any difference in Education Progress since last 4-8 years except they have started teaching on Laptops,Projectors...and Outsourcing School Transport(Just to fool Parents)etc.

Vinodh 10 years ago

With all respects to Mr.Varkey, I think his management cannot blackmail the KHDA by threatening to close the school for not allowin the school to increase the fees. What was the need for the management to invest in 7 star facilities for school and instead use this monies to pay extra salary to his staff. While we appreciate the cost on his investment at the same time can he please let us know how much money he had earned or profited during the 40 year of operation. He is known for his model of comparing his school to that of a hotel industry saying that if you want benefits you need to pay more. Am sure by having a 7 star swimming pool and other fantastic facility ..its not going to help the kids to excel in their studies...pls focus on giving quality education too. Hope KHDA does not succumb to the pressure and send a clear signal to GEMS and other educationists. All the best!

Misha 10 years ago

I am siding with Mr. Dino on this: GEMS should just close unprofitable schools; why hang on to them?

NAIVE 10 years ago

education must not be allowed to be commercialized by these business people, one must understand that educating people at primary level is a social service not a money making business. Mr sunny has made millions from this school business and if school needs to be repaid little bit why making so much noise

Manish 10 years ago

I would appreciate if KHDA should not budge and scummb to the pressure as they had monopolized by having more schools and now in the name of increase in school fees they holding the KHDA and parents & children by ransom and threatning to close down. I suggest KHDA should take over from them cancel their licence to operate if GEMS mangement thinks they are above the goverment and they can hold anybody to ransom which they are already doing to all parents as we are been asked to pay for the tuition fees even for the month wherein schools were closed on vacation. In the name of education they are running the schools as a luxury hotel whoever pays more fees gets five star educations and comfort, we want quality education not luxury for our children.

JN 10 years ago

News is not new to anyone who monitoring GEMS, every year they have the same story to say and put pressure on authorites and parents. Everyone know about the outsourcing of school transport and they increased the fees by 150%. Strangely no authorities questioned on this and the change is for just name sake. I strongly agree with Mr. Dino on shutting down this school it will be good for the parents and students, if they dont know how to run it. Above all majority of the indian schools owned by GEMS comes under acceptable category. I never see an update from GEMS on actions they are going to take, to bring the school to next level. GEMS is only worried about money now, it is a pure business for them. If this kind of threating is going on against the society, authorities should take over the school and run with help of Indian Association or Embassy.

SV 10 years ago

Be it any kind of business, if you are at a loss, either you change your mode of working and reduce expenses, or close down the business. In either case, you can not increase the cost of your product.. or your service. Here Mr. Varkey is trying exactly the other way, which can not be appreciated. The options are very clear.. try different ways to survive, reduce the luxuries even in the form of donations.. or close down..

Raj 10 years ago

He is faking it. He wont close anything. This is not the first time he has given this threat.

SS 10 years ago

"The firm said its operating costs have risen by 57 percent over the last six years, while tuition fees have only risen 27 percent during that time" - Quoted My family's operating cost including high rents and growing cost of groceries and essential items, electricity, water, parking and tuition fees etc., but we have no choice to increase our income. The income remains the same or lesser after recession, whereas the expenses growing up and up and up and up. Mr. Varkey has the option to increase the fees to balance the expenses, but what about we service people. Can Mr. Varkey explain how we cat get our increase to pay him? I would welcome his suggestion. May be to send the family and kids back home? So his operation costs come down considerably.

fayssal 10 years ago

What are these people talking about, the average tuition of schools is 30K for entry level! Education and schooling in dubai is an absolute joke. If GEMS is running at a loss and can't manage costs despite the ridiculous tuitions then Mr. Varkey doesnt know how to run a school and this goes to all other schools for that matter. I still find it hard to grasp paying for my child more than what i paid for my MBA in the US, go figure.