Nzimande dodges questions on UKZN deficit

19 March 2015

I will write to the Leader of Government Business, Cyril Ramaphosa, regarding the Minister of Higher Education and Training, Dr Blade Nzimande's failure to answer parliamentary questions put to him about the R1.8bn deficit at the University of KwaZulu-Natal (UKZN). 

The deficit was brought to light by the DA last year and its existence was unsatisfactorily explained by the University as resulting from the merger of several different institutions and post-retirement medical aid obligations. 

However not all of the deficit could be explained in this manner and it appears that the University has taken a substantial loan for an undisclosed amount. 

I therefore submitted further parliamentary questions to get information on whether UKZN has ever taken a loan from the Development Bank of South Africa, what the value and repayment terms of the loan or loans were and what the loan or loans were spent on.

Minister Nzimande has no grounds for evading the questions in this regard and in effect, frustrating the oversight responsibility to which all Members of Parliament are duty-bound. In fact, the taking out of a substantial, long-term loan by UKZN must have involved the Minister's agreement. 

According to the Higher Education Act, a loan needs to be "approved by the Minister if the sum of the borrowing it authorises plus the borrowing previously approved but not yet taken up, plus the institution's short-term and long-term debt at that date exceeds (i) such amount as the Minister has determined for such institution; or (ii) in the absence of such determination, five per cent of the average annual income of the public higher education institution during the two years immediately preceding the date of such resolution." 

The Minister's inadequate response, on top of the evasive answer given by UKZN last year, does not instil confidence in either the University's level of transparency about its financial situation, or the Minister's willingness to take this matter as seriously as he should.

Text of the reply:

NATIONAL ASSEMBLY

FOR WRITTEN REPLY

QUESTION 48

DATE OF PUBLICATION OF INTERNAL QUESTION PAPER: 12/02/2015

(INTERNAL QUESTION PAPER 1 OF 2015)

Prof B Bozzoli (DA) to ask the Minister of Higher Education and Training:

(1)  (a) Has the University of KwaZulu-Natal University (UKZN) ever taken loans from the Development Bank of South Africa or any other institution, (b) how much has the university spent on infrastructure over the past 10 years and (c) what is the amount of the postretirement medical aid deficit;

(2)  with reference to such loans, (a) how many have been made and in each case, (b) when were they taken out, (b) what was the value, (c) what was each loan for, in precise terms, (d) what is the repayment period of each, (e) what interest (i) percentage and (ii) amount is being charged on each loan, (f) when will each loan be completely paid off, (g) from what (i) budget and (ii) budget line item is the repayment of loans being taken, (h) what amount is the relevant budget estimated to be over or under spent for the 2014-15 financial year,  (i) whether any amount had to be redirected to service the loans; if so, (aa) what amount and (bb) from which budget line item and (j) how much is owed as at the latest specified date for which information is available on each loan;

(3)  with reference to when these loans were taken out, (a) how much has the university spent on infrastructure, including spending within research entities and other bodies attached to the university over the past 10 years, (b) of this amount, how much was given to the university by (i) the Government, (ii) donors and (iii) lenders, (c)(i) how much was taken from university funds, including council or otherwise and (ii) where did each amount originate, (d) how much was spent on each infrastructure project and (e) how much was borrowed for expenditure on infrastructure in total;

(4) with reference to the postretirement medical aid deficit, (a) what are the actuarial models that will be used to tackle this deficit, (b) how long will it take for the deficit to be paid off and (c) why is UKZN still carrying such a large deficit for this item?NW50E

REPLY:

The information you are requesting is obtainable directly from the relevant audited reports of the respective Institution.

ENDS

Statement issued by Prof Belinda Bozzoli MP, DA Shadow Minister of Higher Education and Training, March 19 2015

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