PESHAWAR: The University of Peshawar, the oldest public sector varsity of Khyber Pakhtunkhwa, informed its staff members on Thursday that they would be paid only basic pay portion of the salary for the current month due to financial constraints.

According to the university, it will not be able to pay employees house rent, ad hoc, PhD, entrainment, orderly and conveyance allowances, and perks other than basic pay for the month of Jan payable on Feb 1, 2021.

A notification issued by the register said, “As such, only basic pay plus personal pay will be disbursed for the month of January 2021.”

The development came in the midst of the growing financial crisis plaguing the public sector universities of the province.

Dire financial straits cited as reason for decision

Around three weeks ago, the Islamia College University had asked the provincial government for a bailout package to manage dire financial straits.

A senior UoP staff member told Dawn that the ballooning financial crisis had forced the varsity into curtailing the payment of full salary to staff members.

He said currently, the university faced a shortage of Rs700-800 million.

“Last year, the varsity deficit was around Rs300 million but it has nearly doubled, now,” he said, adding that the university’s pension liability stood at Rs1 billion.

He said the university struggled to pay pension, commutation and other dues to the former and current employees.

The senior employee said the current prolonged Covid-19 pandemic had also contributed to the financial crisis as the closure of universities had also delayed fee payment by students.

He said the university was in contact with both Higher Education Commission and provincial government for assistance.

“The University of Peshawar had asked the provincial government for a bailout package, which led to an allocation of Rs250 million. However, only Rs150 million was paid. The remaining amount has been subjected to a reforms package proposed by the higher education department,” he said.

Dr Fazli Nasir, president of the Peshawar University Teachers Association (Puta), told Dawn that the university had been facing financial crisis since 2013.

He said the university’s pension and pay liabilities had been rising exponentially due to the absorbing annual pension and pay raise to their staff.

Dr Nasir said the basic pay amounted to only 45 per cent of the salary and it would have devastating consequences for low-grade employees.

He also said the varsity’s failure to pay full salary to employees was ominous as next month, the institution could even halve the basic pay payment.

“If you do not have money to pay salary for the current month, then how you are supposed to provide the same next month or thereafter,” he said.

Dr Nasir said the university was not even in a position to increase student fee due to the Covid-19 pandemic.

He said the Puta would hold a meeting today (Friday) to discuss the issue and chalk out a strategy about it.

“The government has to own its universities,” he said, adding that the situation indicates the privatisation of education.

On Dec 31, the Islamia College University asked the higher education department for a bailout of Rs618 million.

The ICU vice-chancellor informed the HED secretary in a letter that the university was facing a shortfall of Rs120 million in recurring grant from the HEC for 2019-20 and the allocation of Rs398 million against Rs1,890 million for the current fiscal.

He added said the Covid-19 pandemic had also created a financial liability of Rs211 million during the current fiscal, while a deficit of Rs407 million accumulated due to pension and commutation liabilities causing a cumulative shortfall of Rs618 million for the current fiscal.

On Jan 7, the government had directed all public sector universities in the province to abolish pension for future employees to manage the growing financial crisis.

“To overcome the rising budget deficit, the public sector universities will delink pay scales from both basic pay scale scheme and pay scale based on defined contribution. Pension scheme having no pension liability for universities shall be implemented for all future recruitment,” the letter which was sent to vice chancellor of the all public sector universities said.

KP special assistant for higher education Kamran Bangash was not available for version on the development.

Published in Dawn, January 22nd, 2021