Competition Commission of Pakistan (CCP)CCP imposes Rs 25m fine on 5 universities

The Competition Commission of Pakistan (CCP) has imposed a penalty of Rs25 million on five universities, which were advertising unaccredited engineering programmes in violation of Section 10 of the Competition Act, 2010, a statement said on Thursday.

The CCP imposed Rs5 million penalty on each university, including University of Faisalabad, University of South Asia, Wah Engineering College, SFDAC and IBM.

A CCP bench, comprising Chairperson Rahat Kaunain Hassan and Members, Abdul Ghaffar and Dr Shahzad Ansar passed an order regarding show-cause notices issued to 27 institutions / universities, offering engineering programmes and claiming to be either accredited or approved / recognised by the Pakistan Engineering Council (PEC) for, prima facie, in violation of Section 10 of the Competition Act, it said.

The order said that it is clear that the term “Accredited by PEC” implies that an engineering programme has effectively met the norms and procedures prescribed by the PEC and only those students that obtain an accredited engineering programme degree are able to register with the PEC as qualified engineers.

The bench held that as accredited status holds value for both, the engineering institutions and students; therefore, claims to this effect cannot be made in a casual manner. As none of the 27 universities had been accredited by the PEC for intake of students in 2011, the bench concluded that they had violated the provisions of Section 10 (1) of the Competition Act. The CCP bench in view of its findings established that the 27 universities that had been issued show-cause notices could not be treated in the same manner, the statement said.

The 27 universities have been divided by the bench in to three distinct categories: those claiming to have been approved / recognised / permitted by the PEC in respect of introduction of new programmes, those claiming to have been accredited by the PEC but ensuring that no students graduate without an accredited engineering programme degree and those claiming to be accredited by the PEC but whose graduates have obtained unaccredited engineering programme degrees.

The order highlights that the proceeds generated by the 27 universities from students graduating in a year are approximately over Rs500 million for a four-year engineering programme.

As the financial impact on students and their parents of such practices of engineering universities is substantial, due disclosures must be ensured by the universities to enable students to make informed decisions.

The CCP bench reprimanded all the 27 universities and directed all of them offering engineering programmes to make due disclosures in the future.

The bench was of the view that the minimum mandatory disclosures must include information in respect of each engineering programme relating to last batch that was accredited by the PEC, status of application of re-accreditation and / or grant of green signal by the PEC.

The bench also observed that the PEC being the only accrediting body in Pakistan for the engineering institutions has to remain conscious that its monopoly in the market of granting accreditation has to be transparent and above board.

The PEC was also directed to issue clear and concise guidelines in respect of the accreditation procedure and a code of conduct in order to facilitate engineering institutions in complying with the due process of accreditation in an efficient manner.

The commission has taken a lenient view in respect of the universities falling in the first two categories.

In respect of the third category where graduates have come in the market and are unable to register with the PEC, the bench finds that this is too serious a violation to be condoned without penalty.

The fee of the five universities falling in this category ranges between Rs400,000 to Rs800,000. The students that have obtained degrees in respect of unaccredited engineering programmes not only suffer financially but also loss of employment opportunities within and outside Pakistan.

In order to create deterrence, a penalty of Rs5 million is imposed on each of the five universities falling in the third category.

The subject universities have been directed to file written commitments with the registrar of the commission, reporting compliance with the order within 30 days of the issuance of the order.

If the violation of the order is a continuing process, such university would be liable to pay a penalty of Rs100,000 everyday in terms of Section 38 of the Competition Act.

The CCP bench also observed that for the financial loss or missed career opportunities, the students or their parents may claim compensation before the courts of the competent jurisdiction.