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The SAITM building in Malabe: Controversy continues

31 Jan 2021

  [caption id="attachment_101917" align="alignright" width="247"] "We can save billions in foreign exchange and also open up the country’s education sector to other countries...If a correct decision is taken today, we can stop students going abroad tomorrow"  UGC Chairman senior Prof. Sampath Amaratunge[/caption] A recent advertisement to sell the controversial private university building of the South Asian Institute of Technology and Medicine (SAITM) in Malabe has raised many eyebrows, as questions remain unanswered regarding the management of the property. Many believe the property has been handed over to the Government and is being managed as a semi-government institution, and the private hospital attached to the university that was mired in controversy is also a fully government-owned hospital controlled by Treasury funds just as other state hospitals. Yet, the ownership of the two institutions is still unclear. As appeared in a daily local English newspaper recently, an advertisement has been posted by the management of SAITM on a website under the commercial property section on 13 January to sell its building and the land for a value of Rs. 3.5 billion. The advertisement read: “3 acre; 1 root; 38 perches land in Malabe ideal for university or international school. Two complete, five-story buildings with one incomplete building with elevator facilities to the top floor and an auditorium that can accommodate 600 attendees (sic).” It is also reported that the management of the institution is reportedly hoping to construct a hospital in another location after selling the building along with the land. Reportedly, the SAITM management had been planning to sell its assets to settle the institute’s loans. In January 2018, in a letter issued by then Director General of Government Information Sudarshana Gunawardana, it was stated that the nine-member committee appointed by the then President was tasked with implementing the steps outlined in the presidential communiqué dated 29 October 2017, which provided the following solution to this crisis: The abolition of SAITM in a manner legally acceptable to the current shareholders, lending institutions, and the new entity interested in taking over all operations and management of SAITM, via the transferral of all SAITM’s assets, liabilities, staff, and students to a non-state, not-for-profit degree-awarding entity that complies with the minimum standards on medical education and training. According to the Department of Government Information, the legal process to carry this out requires the creation of two separate entities, both in compliance with the minimum standards:
  • A new not-for-profit “sunset” institution that will absorb all students who were in SAITM’s medical programme, as well as its assets and liabilities, at which point SAITM will be abolished. The sunset institution will conclude operations when the last current batches of students graduate. No new students will be admitted to this entity.
  • A new not-for-profit “sunrise” institution that will start accepting new students from 2019.
On 30 December 2017, the Government signed a Memorandum of Understanding (MoU) with SAITM and the Sri Lanka Institute of Information Technology (SLIIT). According to the MoU, with the abolition of SAITM, SLIIT will establish the new sunset and sunrise institutions under the guidance of the government that will take over ownership and management of SAITM’s assets, liabilities, staff, and students. Subject to the approval of the Attorney General’s (AG) Department, the MoU will be converted into a legal agreement. According to the communiqué, this solution resolves all concerns raised by various groups, including:
  1. SAITM does not meet Sri Lanka’s high standards for medical education
  2. SAITM’s profit motive will pervert the goal of creating good doctors
  3. The Sri Lanka Medical Council (SLMC), which establishes and maintains national standards for the medical profession, proposed a thorough set of minimum standards for medical education and training that was accepted by the Cabinet with minor amendments on 13 December 2017. This filled a major void in ensuring high standards of medical education
  1. Medical education and training of the “sunset” institution will be approved by the SLMC in accordance with the minimum standards. The SLMC will specify further measures (clinical training and assessment in state hospitals) necessary for students who have received degrees from SAITM to meet these standards and thereby gain provisional registration
  2. The SLMC will grant fresh approval for the “sunrise” institution upon its meeting minimum standards, through an institutional review and site visits as per their mandate and standard practice for this purpose
  1. The “sunset” and “sunrise” institutions will not operate for profit. The “sunrise” institution will be a company limited by guarantee that charges fees, but reinvests any excess income over expenditure in the institution, including in the provision of scholarships based on financial need. SLIIT is an ideal partner in this effort, with two decades of experience in providing high-quality, not-for-profit higher education
Thus, this practical and equitable solution recognises, addresses, and resolves the concerns expressed against SAITM, and is fully compliant with the communiqué issued by the then President on 29 October 2017. Additionally, the Dr. Neville Fernando Teaching Hospital will be transferred to the Ministry of Health, allowing the state medical sector to gain a Rs. 3.2 billion worth of assets at no cost.  The solution has the unanimous approval of the nine-member committee, which was chaired by then Deputy Minister of National Policies and Economic Affairs Dr. Harsha de Silva and includes the secretaries to the Ministries of Health, Higher Education, and Highways; SLMC President; University Grants Commission (UGC) Chairman; Vice Chancellors of the Universities of Colombo and Sri Jayewardenepura; and Medical Faculty Deans of the Universities of Colombo and Kelaniya. This committee met thrice to debate and improve this solution with the participation of the Association of Medical Specialists, SLMA, Government Medical Officers’ Association (GMOA), Federation of Faculty Medical Teachers’ Association, Government Medical Students’ Parents’ Association, and SAITM Medical Students’ Parents’ Association, who participated as observers. In July 2017, a MoU was signed before then President Maithripala Sirisena between Secretary to the Ministry of Health Janaka Sugathadasa representing the Government and Dr. Neville Fernando Teaching Hospital Founder Dr. Neville Fernando at the hospital premises.  Under the agreement, the Dr. Neville Fernando Teaching Hospital was to be administered independently by a board of directors and functioned as a government teaching hospital from 1 August 2017. Addressing the occasion, then Minister of Health Dr. Rajitha Senaratne said that Dr. Fernando has “willingly agreed to hand over the hospital without any resistance”, adding that such a large local investment benefitting the state sector should be commended. He also declared that all profession-related issues regarding the hospital and SAITM have now been resolved, while only the politically motivated issues of various parties remain. However, under the agreement, Dr. Fernando has not only handed over the hospital to the government, but has also agreed to pay off the loans obtained to build the hospital. According to him, he will continue to repay the remainder of Rs. 2 billion to Bank of Ceylon. In May 2019, the then Secretary to the Ministry of Health appeared before the Presidential Commission of Inquiry (PCoI) probing fraud and corruption over the past four years at state institutions over a complaint that claimed public funds were used to maintain the Dr. Neville Fernando Teaching Hospital in the absence of a legal takeover. The PCoI, which probed allegations of fraud and corruption during the period from 15 January 2015 to 31 December 2018, had launched an investigation into the use of state funds to maintain the hospital without legally handing over the hospital to the government. Testifying before the Commission, the then Health Secretary told the Commission that the cabinet paper states that the Dr. Neville Fernando Teaching Hospital will be owned by SAITM for 10 years, only after which the hospital can only be taken over by the government. A communiqué issued by the presidential commission to the media highlighted the question raised as to whether the Ministry Secretary, who is the Chief Accounting Officer by law, ought to correct an incorrect financial decision put forward by a minister. Accordingly, the then Health Secretary had answered in the affirmative. Despite it being four years since the MoU was signed before then President Sirisena, The Sunday Morning learnt that the transfer of assets of the Dr. Neville Fernando Teaching Hospital is still on the way. It has been revealed that state funds have been allocated for the hospital without bringing it under the government’s purview. The ownership of the hospital premises, however, belongs to the Urban Development Authority (UDA). The cabinet memorandum proposed to reach an agreement for transferring the physical possession of the buildings, including the properties belonging to Dr. Neville Fernando Sri Lanka-Russia Friendship Teaching Hospital in Malabe, to the Government of Sri Lanka on a sublease for a period of 10 years. It was reported that until the loan of Rs. 1,013 million, which was obtained by a private institution from a state bank for the establishment of the hospital, is repaid, the ownership and legality of the properties should be retained with the private institution. Once the loan is settled in full, the ownership of the hospital, along with all the properties, should be transferred to the government. Cabinet approval for the government to take over the hospital had been granted on 5 July 2017. Even after two years since Cabinet approval was granted, it is learnt that a sublease agreement had not been entered into in order to vest the physical possession of buildings and properties of the hospital with the government. However, an audit inspection revealed that the Ministry of Health had spent a sum of Rs. 583 million on the settlement of revenue expenditure of the hospital for the period from 1 August 2017 to 31 December 2018.  Nevertheless, the ownership of the university is still in question. When contacted by The Sunday Morning, UGC Chairman senior Prof. Sampath Amaratunge said the university (SAITM) does not fall under the purview of the UGC. “I have requested the Health Ministry to put SAITM under the University of Sri Jayewardenepura during the previous Government, but it never happened. As of now, the university management of the premises is not under the UGC,” he elaborated. When asked whether the UGC has the ability at present to develop SAITM, Prof. Amaratunge said that if SAITM was handed over to the UGC, they could convert it into a high-quality private medical faculty by developing the university as a public-private partnership (PPP) without being a burden to the Treasury. “We can save billions in foreign exchange and also open up the country’s education sector to other countries. We have all the resources and it’s just a matter of sitting at a roundtable and taking a decision. If a correct decision is taken today, we can stop students going abroad tomorrow,” he stressed. Explaining further, Prof. Amaratunga said the UGC is planning to turn Sri Lanka into a higher education hub. “We have so many good plans and soon a recognised private university would open its wings in Sri Lanka. We have to delay the plans due to the Covid-19 pandemic situation,” he added. Speaking to The Sunday Morning, an employee attached to the SAITM management, who wished to remain anonymous, confirmed the publishing of an advertisement to sell the university building and the land, but said no investor has come up yet and therefore SAITM Chairman Dr. Fernando, who is now around 90 years old, has withdrawn his decision. “We have put up an advertisement, but because of the high value of the property, we did not get an investor. But in the meantime, the Chairman has also changed his mind and decided not to sell the property,” she noted, adding that the university and the hospital was still under the ownership of the Chairman. “The Chairman told us that he did not hand over the hospital premises too,” she noted. All attempts made by The Sunday Morning to reach the UDA and the Ministry of Higher Education failed.


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