Newly formed university-owned firms are rendered almost irrelevant as they cannot bid for internal tenders as this is viewed as tantamount to a conflict of interest.  The National University of Rwanda (NUR) Vice Rector for Administration and Finance, Dr. Desire Ndushabandi, highlighted the issue, on Tuesday, while briefing the standing committee on budget and national patrimony of the Chamber of Deputies, on the challenges the university encountered during the last fiscal year."Procurement rules are rendering NUR efforts in income generation fruitless. A NUR company cannot access NUR tenders on account that this amounts to conflict of interest,” Dr. Ndushabandi told the committee, as he requested for a separate session to examine the problem, backed by the varsity’s Rector, Prof. Silas Lwakabamba. In the ensuing short debate, MP Constance Mukayuhi, promised that the matter would be examined at length later stating that it is indeed a government policy to encourage universities to engage in profit making initiatives to sustain themselves, given the budgetary constraints in all sectors."Honourable members, it is affecting all universities, not only NUR,” Prof. Lwakabamba said.Ndushabandi said the NUR administration was worried it might not meet its priorities, including construction and rehabilitation of its old buildings.The government is eager for more self sufficiency among public universities to avoid over-reliance on it. The said companies are thus supposed to take increasingly important roles in that regard.In the meeting, SFB Rector, Reid E. Whitlock, also backed NUR officials on the predicament. SFB encountered similar challenges after it embarked on big construction projects.Whitlock said: "If those firms are going to be treated at arm’s length, as distinct from universities themselves, that should give them all the rights and privileges of a full private company. And part of our confusion that we sense on the part of lawmakers, and others, is that those private companies are still being seen as part of the government."A distinction really has to be made clear so that if we don’t use government funding to operate, those private sector firms, in every way, should be seen as fully private. That will then give us the flexibility to pursue business opportunities, where they present themselves, like any other private company. Without that flexibility, we won’t get government money but we won’t really be able to operate as fully fledged companies.”Speaking to The New Times, Prof. Lwakabamba, noted that government has been reducing the higher education budget with the last being a 25 percent cut."The last one was 25 percent and they encourage institutions to create companies to generate income like other institutions are doing worldwide,” Prof. Lwakabamba said, while shedding light on the issue."If you look at the universities in our neighbouring countries like Kenya, Tanzania and Uganda, the private companies are allowed to tender for business activities in an institution. In actual fact, they give them preference but here, we are told that our procurement rules do not allow this because it would be regarded as conflict of interest,” he added.Lwakabamba noted that the NUR company which was started last year, was still struggling, but added that plans were underway to expand its range of businesses to consultancy and production, quickly adding that they would only do so if there are assurances about their working modalities.When MPs Faith Mukakalisa and Abbas Mukama, pressed Education Minister Dr. Vincent Biruta on the twin issues of procurement and university companies, the minister admitted that the latter would be beneficial but cited the conflict of interest as a challenge.Biruta said: "It has become a problem when it is an NUR company being given a NUR tender, but they get other tenders. For many of the people we discuss with, there could be possible conflict of interest. Otherwise, they get other public tenders.”Dr. Ndushabandi told the session that due to the decreasing government budget, NUR was unable to break even as it lost over Rwf2.1 billion in the last fiscal year. He cited other problems as overcrowding of student hostels, poor sanitation, acute shortage of learning infrastructure and staff retention as most of the staff members opt for jobs in other institutions after undergoing training.NUR has a budget of Rwf7.3 billion in the 2012/13 financial year. According to the varsity administration, there are no funds to acquire laboratory equipment.