DUBAI // As parents gathered to protest a 90 per cent increase in a school's fees, the largest operator of private schools in the country, Global Education Management Systems (Gems) said fee caps imposed by government regulators make it difficult for them to cover operating costs. Interviews with other schools indicate that they, too, are struggling to cover rising costs without increasing fees beyond what is allowed by regulators. Gems recently won permission from the Knowledge and Human Development Authority (KHDA), which regulates Dubai school fees, to nearly double tuition at its Dubai Modern High School (DMHS). The increase led to a protest by parents at the school yesterday. A decision on how much private schools in Dubai can raise fees for the next school year is expected from the KHDA soon. Dino Varkey, the senior director of business development at Gems, which owns 26 other private schools in the Emirates, said higher fees were inevitable at DMHS because rising rent forced it to move. "Our rent for the land has increased year after year," Mr Varkey said, adding that it "jumped from Dh3.7m [US$1m] to Dh15m in four years". "Given the incredible cost of relocation, we're going to be investing Dh240m by the time Dubai Modern High School is finished. When we built the school in 1986 it cost us Dh20m. "There is no way for us to manage that kind of investment without the fee increase." Gems Asian schools, Mr Varkey said, are in a difficult position because the Ministry of Education and KHDA rules have prevented them from raising fees to correspond with increasing costs. Some of Gems Asian schools charge as little as Dh5,000 a year. Many of the Asian schools opened 10 to 20 years ago, Mr Varkey said, and as a result fees were "abnormally" low. "We are the only industry today that is regulated on our price while none of our costs are regulated," Mr Varkey said. He added that while DMHS fees had increased 39 per cent in the past four years, base salaries for teachers had gone up 45 per cent, other salaries by 63 per cent and staff accommodation costs by 512 per cent.
"We are at breaking point when it comes to the costs that we can continue to absorb. Unless we see some relief on our tuition fees, we will no longer be able to bear these cost increases." Other private school operators in the country share Mr Varkey's concerns. Gareth Jones, head of the American International School-Abu Dhabi, a for-profit institution that opened 13 years ago, said: "We are one of the longer-established schools and our fees were set quite a long time ago. As long as there is this cap, we are always going to be behind other schools which set their fees at a higher level when they opened." Mr Jones said it was a serious problem because the cost of housing had increased and because newer schools, with their higher fees, were able to pay teachers higher salaries. "Tuition fees are the only kind of revenue we have. The rents are incredibly high and that has to be paid out from the money we get from tuition." The school raised its fees by 10 per cent last year and hopes to do the same for 2009-10. So far, DMHS is the only Gems school in Dubai to raise its fees for next year. That may change this spring, when the KHDA releases its rules for fee increases for the 2009-10 academic year. For the past two years, the KHDA has allowed schools to raise tuition by 16 per cent. The Ministry of Education, which changed its fee structure in July, allows private schools in the other emirates to raise fees by 30 per cent over three years. Previously the ministry capped fee increases at 20 per cent over three years. Mohammed Darwish, chief of licensing and customer relations at the KHDA, said DMHS was allowed to increase fees because it was forced to move. "We had six applications for relocation in 2008, and this was the only one we approved," Mr Darwish said. "Relocating, of course, costs money and is a long-term capital investment. DMHS is a one-off, a very unusual situation, and the rise will effectively be spread over five years. We have given permission for a change over two years totalling 90 per cent, followed by a three-year freeze." Paul Coackley, principal at the non-profit British School-Al Khubairat in Abu Dhabi, said the school was reviewing its fees. "Accommodation costs have risen, building costs have risen, salaries have risen; there are a lot of factors that are all coming together," he said. "You have to really look at every context quite carefully." Newer schools are not in the same predicament. In Dubai, new schools set their own fees, which are then frozen by the KHDA for a period of three years. Peter Daly, head teacher at the non-profit Dubai English Speaking College, which opened four years ago, said that fees had not been a problem at his school. The school charges Dh52,750 a year. "They have allowed us to raise fees to cover our everyday costs," Mr Daly said.
klewis@thenational.ae loatway@thenational.ae
