Why pay ‘R400m’ to lease tablets when you pay R264m to buy, EC dept asked
The Eastern Cape education department plans to fork out more than R400 million on leasing 55,000 tablet devices for Grade 12 pupils. The tablets are expected to be returned after a three-year term.
The EC Education Dept will spend more than R400m on leasing 55 000 tablet devices for Gr 12 pupils. Initially the contract was said to be worth R160m. However, the legislature was told that the contract amount was R404.8m. No reason was given as to the R244m inflation.
— Tina (@Tina_Hokwana) July 21, 2020
The department has entered into the agreement with a Pretoria-based IT group and it is said to be worth hundreds of millions.
Although exact details around the contract remain sparse after numerous calls to the department went unanswered on Tuesday, a rough calculation on the price of each tablet leaves us at over R7,200 per tablet.
While the Eastern Cape education department will spend the figure in an attempt to ensure a rescued academic year for matrics, an online search of tablets highlights prices of tablets to range from R899 for a Neon IQ 7-inch WiFi Tablet NQT7W at HiFi corporation.
A Samsung Galaxy Tab A 8-inch with WiFi capabilities in black is valued at R1,999 while a Samsung Galaxy Tab A 2019 10.1″ LTE 32GB in black is valued at R6,299. Further research using Price Check results in several other options which could equate to a better deal for the Eastern Cape department.
Learners could get an I-LIFE K3,500 Silver bundle which includes a general Model number:K 3500 tablet plus a Zed watch C Form factor smartwatch for only R699.
The Citizen made several calls to various outlets including Incredible Connection asking for quotes on a bulk deal for tablets. At an average of R4 800 a tablet, the amount for 55 000 tablets came to R264 million, with an option for a discount.
While agreements differ for the benefit of both parties, some companies opt to lease rather than purchase due to some assets depreciating at a rapid rate.
Although it has been reported that South Africans are fond of purchasing items, the leasing model presents an alternative for consumers who wish to change the asset, in this case, the tablets without incurring financial penalties or depreciation.
Questions have surfaced on social media around the leased price of the sim cards, maintenance of the tablets as well as the prices of the protective cases.
The price of who will be responsible for the apps as well as the security of the tablets remain in question, as it is alleged that even the delivery fee seemed questionable.
More details: it includes SIM cards (hopefully with data seeing the cost), maintenance, protective cases, apps, security & co.
The tablet seems to be worth 2000 retail though (they pay 3500 which is heavy even once interests are factored).
The delivery fee is high too. pic.twitter.com/YpH2uxRThv
— Gui VanVeen (@GuiVanVeen) July 21, 2020
Terms to the lease agreement may provide some light, as the outlay of the capital spread over the period plays a major factor on lease agreements.
The onus may be to have learners use the assets until such a time that the department will return the tablets to the owner, once headway on the Covid-19 pandemic has been made.
While the agreement appears to be short term with the collection of the tablets remaining the owner’s responsibility, the price per tablet appears to be a little steep, considering the department may have sought for the flexibility of a temporary measure.
Numerous attempts to contact the department were still unsuccessful at the time of publishing and an update will be made once more clarity on the agreement is reached.
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