Business News of 2012-10-03

Government must privatise STC – Financial analyst

The government has been advised to privatise the ailing Intercity State Transport Company (STC) to avoid a total collapse.

The state-owned transport firm is ridden with a huge debt to the tune of US$3,783,935 owed the Prudential Bank. The bank has threatened to auction STC’s head office and transport yard at the South Industrial Area in Accra.

But speaking on Joy FM’s Top Story Tuesday, a financial analyst, Sydney Casely-Hayford said government must take steps to wean itself from the operations of STC, and allow a private sector to run the state transporter.

According to him, government’s interference and participation in major sectors of the economy has not worked.

“Government should simply find enough private investment interests, and then hand it over and just collect its money. That is all it has to do. It doesn’t need to get involved in an attempt to even try and turn the business over.”

Mr Casely-Hayford cited many assets of the STC dotted around the country and remarked: “There is value in that business if it can be packaged properly. And the duty of government is to package it in such a way that it can redeem the debt to Prudential Bank, and also have sufficient enough working capital to make it viable.”

He stated: “It is time for us to lift the mantra of making private sector the engine of growth and allowing the private sector to take on board all these various other businesses that would make them work efficiently.”

Meanwhile, Chairman of the Senior Staff Union at STC Seth Kwame Martin confirmed on Top Story with Jefferson Sackey that some 45 buses purchased with the loan from Prudential Bank in 2005 were not up to standard, and could not last more than two years.

“Yes, that is really the case; some buses that were imported were not up the standard we use.”

Seth Kwame Martin also indicated that the Union is “very, very angry” with the Transport Minister Alhaji Collins Dauda for his utterances which sought to indict the workers of failing to properly maintain the company’s assets. He also added that “it is not true that we are thieves, we cause the company to run down”.

He said efforts by the company to acquire more buses were made without any assistance from the sector Minister, and yet the Minister goes about priding himself with giving enough support to the company.

“Now he goes out to say that he has done a lot for STC. We want Mr Collins Dauda to just come out with just two interventions that he has done for STC.”

Seth Kwame Martin cited an instance where management had to beg J.A Plantpool before they were given 10 buses on “zero deposit”, only for Alhaji Collins Dauda to come around demanding that the buses are not used until he inaugurated them.

He also denied that the company is collapsing due the advent of other transport companies.

According to him, the problems of STC started when it was divested to VANEF. He claimed VANEF had no capital at the time to inject into the company so it went and borrowed from SGSSB, adding that profits made by the company were rather used to offset the loans they contracted.