Curro talks up state gains as it lays plans for private universities

Private universities could save the state millions of rands, says Piet Mouton, CEO of PSG, which, through its holding in Curro, plans to expand into higher education.

His group, with a 58% stake in private school operator Curro, intends investing some of its R1.7-billion cash pile in "private higher education institutions", which Curro is setting up on the back of its teacher training colleges.

It already has a teacher training college in KwaZulu-Natal, Embury, for 3,000 students. Next year two higher education institutions for 1,600 students in Midrand and 1,000 students in Pretoria are due to open, while 3,000 to 4,000 students will be catered for at a tertiary institution in the Western Cape in two to three years.

Curro is busy designing courses and degrees and getting them accredited, a process that will take two years.

Curro CEO Chris van der Merwe said it intended to accelerate the growth of its private higher education institutions because there are 50,000 eligible students who cannot find places in public universities.

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Anthony Clark, an equity analyst at Vunani, said given the strength of its academic brand, Curro's move into private higher education made "absolute logical sense" for itself, the government, parents and investors.

"Given that domestic higher education in this country is under enormous stress, if I were a parent looking at the scandal going on in universities and had the option of sending my child to a private university, I'd be quite happy with that."

The implosion of public universities could provide the gap for private alternatives, but Van der Merwe and Mouton deny they are capitalising on the crisis.

Higher Education Minister Blade Nzimande has made it clear to the fees commission that the government is not in favour of allowing private universities, which he said posed a serious threat to the public education sector.

Nzimande said they would lead to an increase in the cost of higher education and academics being poached from the public sector as well as a loss of the financial contribution of wealthy students to public universities.

But Clark said the fact that the government was "not exactly keen on domestic private universities" is "no reason for investors to hold back".

Van der Merwe said degrees at Curro institutions, which would have the same accreditation as those in the public sector, would cost about R40,000, which is in line with public university fees. Curro universities will not receive government subsidies - which, he argued, constitutes a saving for the government.

Mouton said the Curro institutions would cater for the 50,000 students who, according to the company's statistics, are turned away from public universities every year in spite of having a university exemption matric.

He said that without alternative private higher education institutions, children of wealthy parents would leave the country.

"And the capital outflow is then significant. Instead of spending R50,000 locally, the parent may be spending R500,000 per annum abroad. That's a straight cash outflow from the country," said Mouton.

As for posing a threat to public universities, he said parents' first choice would remain recognised public universities such as Stellenbosch, the University of Cape Town or the University of the Witwatersrand.

Given a choice between CVs from a Curro private higher education institution and an established public university, most corporate employers would select the latter, he said.

"It will take a very long time for that wheel to turn."

But he added: "That is the case at the moment. With the right level of marketing and making sure you give good-quality education, you can change that over time. I certainly have no intention of investing in a university whose graduates can't get a job."

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Curro sees the institutions as a logical extension of its teacher training colleges, which it started four years ago and which offer only BEd degrees. "The moment you train a high school teacher you need a BCom, BSc and BA degree because they need to teach accounting, maths, science, languages and so on," said Van der Merwe.

Curro's institutions of higher education (certain degree and research criteria have to be met before they can be called "universities") would only offer courses that will lead to jobs, he said. "We won't do degrees which don't fit in with corporate needs."

They will do research, however. "You cannot call yourself a fully-fledged higher education institution if you don't do research, so we will do it, but nothing like at the big universities. It is very expensive."

They would be like small, niche, private universities in Brazil, the US and the UK, he said.

He scotched suggestions that they would be predominantly white.

Thirty thousand of the 42,000 pupils at Curro's private schools are black and there is likely to be a similar demographic at its higher education institutions, he said.

"If you analyse the 50,000 who don't get a place at university, they are predominantly black. So these will not be predominantly white institutions."