How EduSolutions makes its millions

2012-07-01 10:00
Thanduxolo Jika
» The Limpopo, Gauteng, KwaZulu-Natal and Mpumalanga education departments previously negotiated and procured school books and other learner support material from publishers and suppliers directly;

» The state would receive a standard 30% trade discount, reducing costs significantly;

» In these provinces, EduSolutions has effectively replaced the role of the state;

» On winning a tender to procure and deliver school material, it takes over relationships with distribution contractors – and on occasion the state-run warehouses;

» EduSolutions manages a database of schools and their requirements, and takes over negotiations with publishers as well as monitoring deliveries to and orders from schools;

» The publishers continue to offer a 30% discount but now – in the case of Limpopo, for example – EduSolutions retains 70% of that discount and is supposed to give the balance back to the state;

» The trade discount on book and learner support material orders can run to more than R100 million in a single province due to the size of the orders;

» EduSolutions is also paid substantial administrative and management fees in these contracts, so it scores twice; and

» The impact is that textbooks and learner support materials become more expensive for the taxpayer as the benefit of the trade discount is no longer being paid back.