Narrow escape: NED averts collapse with Rs265m infusion
The favourable figures surfaced at a university meeting on Thursday.
"I have taken stringent measures to start a journey toward improvement, and I can see that a few people are certainly not happy," NED vice-chancellor Prof Dr Muhammad Afzal Haque. PHOTO: FILE
KARACHI:
NED University of Engineering and Technology that was teetering on the edge of a total financial ruin seems to have narrowly escaped a complete collapse.
Within a six-month span, the institution did not only manage to drive Rs265 million more in revenue as compared to its total earnings of the last fiscal year but it has also reduced bank loans to Rs555 million from a staggering Rs760 million, The Express Tribune has learnt.
These provisionally favourable figures surfaced as the university’s finance and planning committee, headed by its year-old vice-chancellor Prof Dr Muhammad Afzal Haque, sat on Thursday to review the financial reports of the last six months presented by the acting finance director, Abdul Wahab.
“The good news is that this extra income will enable us to repay another Rs140 million to the banks in a very short time,” said Prof Haque, confirming the figures to The Express Tribune. “It is my priority to redeem the university from these loans as, apart from being an overwhelming obligation, the banks had consumed Rs97 million in mark-up from the university’s earnings last year.”
The improvement has arrived due to significant cuts in the expenditure as well as through an exploration of new avenues to generate revenue, he explained. For instance, the contractual reappointments after retirement or other contract-based appointments, which had been consuming around Rs55 million each year, have been cut to half.
When Prof Haque took up the responsibility in March last year, the university was facing its worst financial crisis in its history with the net shortfall of around Rs1.4 billion, in which around Rs760 million were bank loans against investments.
“The institution was almost double-staffed if one considers the Higher Education Commission guidelines while other major issues were the consistent shortfalls in Higher Education Commission’s recurring grants as well as increase in number of enrolled students over the years,” listed Prof Haque.
The university that has around 2,458 staff and faculty members now, used to be run by a total of 1,812 employees in 2007. The financial burden these employees had caused can be understood in terms of stark variation under the head of salaries in a short span of five years. The Rs211 million that the university had paid in salaries to its teaching and non-teaching staff during 2005 and 2006 had gone up to 344 per cent, or Rs938 million to be exact, by the year 2011 and 2012.
Without taking any practical measures to manage the serious financial crisis over a long-run, the university administration had acquired permanent loans worth Rs1.96 billion from 2007 till 2013 during the tenure of former vice-chancellor, late Engineer Abul Kalam.
Though most of the debt has been repaid, the institution still faces outstanding loans worth Rs555 million, acquired through Habib Metropolitan Bank Limited, National Bank of Pakistan and Askari Bank Limited.
“We still have to go a long way,” said Prof Haque. “I have taken stringent measures to start a journey toward improvement, and I can see that a few people [who were also a part of university administration during the tenure of former vice-chancellor] are certainly not happy.”
Published in The Express Tribune, February 16th, 2014.
NED University of Engineering and Technology that was teetering on the edge of a total financial ruin seems to have narrowly escaped a complete collapse.
Within a six-month span, the institution did not only manage to drive Rs265 million more in revenue as compared to its total earnings of the last fiscal year but it has also reduced bank loans to Rs555 million from a staggering Rs760 million, The Express Tribune has learnt.
These provisionally favourable figures surfaced as the university’s finance and planning committee, headed by its year-old vice-chancellor Prof Dr Muhammad Afzal Haque, sat on Thursday to review the financial reports of the last six months presented by the acting finance director, Abdul Wahab.
“The good news is that this extra income will enable us to repay another Rs140 million to the banks in a very short time,” said Prof Haque, confirming the figures to The Express Tribune. “It is my priority to redeem the university from these loans as, apart from being an overwhelming obligation, the banks had consumed Rs97 million in mark-up from the university’s earnings last year.”
The improvement has arrived due to significant cuts in the expenditure as well as through an exploration of new avenues to generate revenue, he explained. For instance, the contractual reappointments after retirement or other contract-based appointments, which had been consuming around Rs55 million each year, have been cut to half.
When Prof Haque took up the responsibility in March last year, the university was facing its worst financial crisis in its history with the net shortfall of around Rs1.4 billion, in which around Rs760 million were bank loans against investments.
“The institution was almost double-staffed if one considers the Higher Education Commission guidelines while other major issues were the consistent shortfalls in Higher Education Commission’s recurring grants as well as increase in number of enrolled students over the years,” listed Prof Haque.
The university that has around 2,458 staff and faculty members now, used to be run by a total of 1,812 employees in 2007. The financial burden these employees had caused can be understood in terms of stark variation under the head of salaries in a short span of five years. The Rs211 million that the university had paid in salaries to its teaching and non-teaching staff during 2005 and 2006 had gone up to 344 per cent, or Rs938 million to be exact, by the year 2011 and 2012.
Without taking any practical measures to manage the serious financial crisis over a long-run, the university administration had acquired permanent loans worth Rs1.96 billion from 2007 till 2013 during the tenure of former vice-chancellor, late Engineer Abul Kalam.
Though most of the debt has been repaid, the institution still faces outstanding loans worth Rs555 million, acquired through Habib Metropolitan Bank Limited, National Bank of Pakistan and Askari Bank Limited.
“We still have to go a long way,” said Prof Haque. “I have taken stringent measures to start a journey toward improvement, and I can see that a few people [who were also a part of university administration during the tenure of former vice-chancellor] are certainly not happy.”
Published in The Express Tribune, February 16th, 2014.