Core, Educomp plan bids to build, operate govt schools

Written by Nikita Upadhyay | Nikita Upadhyay | Mumbai | Updated: Jun 26 2012, 08:38am hrs
Core Education & Technologies, Indias largest technology-enabled education solutions provider, will bid for government contracts to build, operate and manage (BOM) 500 schools this year, signalling interest from private companies to manage government schools. Its rivals, which include Educomp Solutions, will also look at this new opportunity.

The government has invited expressions of interest for the first 500 schools to be built and operated under this model, said Anshul Sonak, president, Core Education & Technologies. We believe only serious players with deep pockets will be participating in these bids.

Founded by Sanjeev Mansotra in 2003, Core has grown through acquisitions in India and abroad. For us, it will be important because currently, the government segment has given us sustainability and profitability so far. These big-ticket contracts will generate good top line for us, Sonak said. Core, which earns 33% of its R800 crore annual revenues from government contracts in India and overseas reported R188 crore net profit in fiscal 2012.

India plans to start 2,500 such schools under PPP, which will add more schools than it would have built alone. Functional efficiency of private entities enabling early delivery of quality education, optimising life-cycle costs and improve quality of education, including infrastructure since the risk of project completion and delivery of agreed outputs will be borne by the private entity, are some of the benefits of the model stated by the human resources ministry.

A 10-year initial contract can be renewed with mutual consent, but the stipulated 3 acres land must be purchased by the bidder with help from the state government. Consultants, however, say making profit will be tough. It will not be easy to make money on such contracts from early days. These are long-term projects and mostly, schools take almost 7-8 years to break even, said a consultant.

The government proposes to spent R61,427 crore in fiscal 2013, 18% more than the previous fiscal, for education.