Bongani Majola
Plans to merge Technikon Natal and ML Sultan Technikon less than two weeks from now have been thrown into disarray by Technikon Natal’s financial woes.
Tension between the two institutions emerged this week as ML Sultan staff and students vowed to take legal action to suspend the merger until pressing financial issues are addressed.
Technikon Natal has allegedly gone from assets of about R40-million to such a serious cash-flow deficit in recent years that Minister of Education Kader Asmal has approved a R37-million overdraft to rescue the institution ahead of the impending merger.
This week about 400 students from ML Sultan, located a few metres from Technikon Natal, marched from their campus to Department of Education offices in the Durban city centre, demanding that “the merger be postponed until outstanding grievances are addressed”.
The student protest was sparked by Asmal’s approval of the overdraft. In his March 8 letter to Justice TS Jali, ML Sultan’s council chairperson, Asmal refers to “serious concern” about “the lack of financial information from Technikon Natal” that “is necessary for the completion of the merger”.
He notes that the technikon has “deteriorated financially as a consequence of substantial operating deficits in recent years”.
Asmal’s letter puts the deficit at R30-million last year. The letter takes into account the fact that the technikon’s self-initiated audit by KPMG will produce financial statements only late in April. It was apparently on that basis that the R37-million lifeboat was approved. ML Sultan staff insist that Technikon Natal “must put its financial house in order first, before we can merge”.
The merger process was initiated more than two years ago by the two institutions themselves and has generally been endorsed as natural and logical, especially given their physical proximity.
But while Technikon Natal staff have apparently been “resigned” to the merger, union sources say ML Sultan staff are very reluctant. Among other things, “salaries of staff at Technikon Natal are generally lower than at ML Sultan”, says the company appointed to produce a new schedule of market-related salaries for the merged institution.
As tensions between the institutions surface, there is a strong feeling from senior Technikon Natal staff that “students were being stirred up by [ML Sultan] unions to protest against the merger so their jobs will be saved”.
This week, ML Sultan’s National Union of Technikon Employees of South Africa (Nutesa) voiced its support for the student protest. Nutesa issued a joint statement with the National Education Health and Allied Workers’ Union in support of the students in “their peaceful efforts to address the same concerns that we have regarding the timing of the merger”.
The unions also said they will embark on peaceful demonstrations to publicise outstanding issues that include “a due diligence report from Technikon Natal” and financial liabilities like a “pension deficit that would seriously impact on [ML Sultan] staff”.
While Asmal pledged in his letter to ensure that the new institution will be financially stable, the two unions have requested “explicit guarantees”.
In the wake of the student protest, Kiru Naidoo, personal assistant to ML Sultan vice-chancellor Professor DJ Ncayiyana, confirmed his institution’s “intention to merge on 1 April 2002 while mindful of the potentially negative financial implications for Sultan if the financial uncertainties [from Technikon Natal] were not dealt with”.
Regarding staff and student concerns about the merger, Naidoo said: “These are valid arguments.”
But “in spite of these concerns, there remains a positive sentiment about the benefit of the merger”.
The unions disagree. Their joint statement concludes: “It is clear, therefore, that the two institutions are not ready to merge.”