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  • More than 15 Engineering Colleges On Sale Due to Financial Crisis

    Desire to be a college owner? Now may be your opportunity in case you are prepared to take the risk. At the closing count, at least fifteen colleges, mainly engineering institutes, in the Coimbatore region are reported to be up for sale. However there aren't many takers for them. Driven by the dire financial condition, primarily because of low student enrollment and higher running costs, many college owners have placed their institutions on the block. Across the state, minimum a hundred colleges are in problem, claim educationists.

    With the mushrooming of engineering institutions, the majority are finding it hard to fill even half the number of seats, compelling their owners to look out for buyers. Deals are struck discreetly between owners of colleges in distress and buyers, many of whom are players in the education field. The talk is that few arts and science colleges, too, are bailing out. The institutions quote anywhere between 50 crore and 100 crore. Though brokers and agents promote on behalf of the colleges up for sale, most of the owners are embarrassed about confessing it openly, fearing it will impact their reputation.

    Former Anna University vice-chancellor E Balagurusamy said as many as 100 colleges, both engineering and others, were up for sale in the state. "This is because they just don't have enough students. When there are no students, where is the revenue," he asked.

    Admitting there was a distress sale by colleges, Coimbatore Association of Management Colleges Affiliated under Anna University joint secretary T D Eswaramoorthy said, "With rules getting more rigid, running an institution has become tougher," he said.

    A year ago, the Dhanalakshmi Srinivasan Group of Institutions bought a college from another group at Navakkarai on Coimbatore outskirts. Dhanalakshmi Group secretary P Neelraj said they were able to do better with the newly-acquired college.

    "We increased student intake from less than 50% to around 70% after we acquired the college," he said. But, with increasing costs and the struggle to fill up seats, running an institution is a challenge, he admitted. This is the reason, perhaps, why many colleges in distress have few takers.

    The difficulty in filling up seats and the increasing operational costs are said to be the biggest challenge. Last year, with around 45,000 government quota seats in the state falling vacant, the All India Council for Technical Education (AICTE) threatened to withdraw approval for a few engineering colleges for deficiency of adequate infrastructure. The council issued show-cause notices to 71 institutions. The majority of the institutes had failed to fill even 50% of their seats.

    Colleges in the Coimbatore region, considered a popular education hub, were affected the most. At least 10,000 of the 50,000 engineering seats here remained vacant at the end of the last admission season.

    There may be colleges for sale, but many of the leading educational groups are not in a buying mood. "We may expand later. But at present we are not keen on acquiring any institution, unless it is viable," said CEO and secretary of the Nehru Group of Institutions P Krishna Kumar. "Many think that this is an opportunity to make easy money. Many want to enter the education business as they do in film and travel industries. But acquiring or starting a new college in the present situation can be suicidal," said the owner of an engineering college, seeking anonymity.
    With approved colleges increasing their intake every year, most of the students go to these colleges, leaving the remaining struggling to find sufficient students.

    In 2010, AICTE allowed accredited engineering colleges to add 180 seats and the others a hundred and twenty. This led to a sudden rise in the number of seats available. In 2010, there were 1.5 lakh seats. By 2012, the number shot up to 2.25 lakh.

    In a similar fashion, deemed institutions were allowed to increase the number of branches. This too affected the student enrolment in other colleges.

    This coupled with the opening up of the private educational sector in Kerala dried up supply of students to institutions in the Coimbatore region.