Who Caused The Mess At STC?
The nation’s biggest and best-selling newspaper, the Daily Graphic, was screaming with the banner headline: ‘STC FOR SALE’.
Those who were old enough could remember with nostalgia, the State Transport Corporation (STC) in its full glory. They could not but open their mouths in shock and disgust at such a story about a national institution that had left sweet memories in the minds of many households.
What went wrong? Is an obvious question they would be asking. Those were the days the nation’s number one transporter – the brainchild of Osagyefo Dr Kwame Nkrumah – was the dominant carrier of human beings and cargo in the country, visibly commanding the country’s roads.
The STC was not only a symbol of national pride but the main guarantor of road safety. No wonder every Ghanaian wanted to enjoy the services of STC.
Students particularly going to and returning from school, would go for nothing except the STC bus which provided safety and comfort.
In those days, even young children were ‘posted’ on STC buses or trucks and they would be delivered safely to their relatives.
STC trucks also delivered mails on behalf of the then Post and Telecommunications Department throughout the country with regular precision while its tankers made sure fuel and other lubricants reached the remotest corner of the country.
Then the rot set in. The STC, like all other state enterprises, started experiencing a downward slide in its operations thanks to undue political interference, cronyism and corrupt practices.
The time came when the stage was set for the STC to go the way of other state enterprises nurtured and groomed and made vibrant under the First Republic – divestiture – or in most cases, as a giveaway to whoever is nearest and dearest to the ruling clique.
A Serious Fraud Office (SFO), now Economic and Organised Crime Office (EOCO), report stumbled upon by yours truly cleared showed how some organisations and individuals conspired in various ways to strip this country naked and milk it dry of precious national resources.
It began in 1996, when the STC was put on divestiture by the Divestiture Implementation Committee (DIC). Bids were received from three companies, namely; Vanef Consortium Limited (VCL), Yellow Cab Limited and Densu Ventures Limited. The bid price was US$12.4 million and a cedi component of c4,984 billion.
VCL won the bid but could not pay within the stipulated time so it lapsed. The divestiture was re-advertised in 1998 and October, 1998, three bids were received from VCL, WMBO (Workers Management Buy Out) and Kalahari Investments. The bid was won again by VCL.
The bid price was US$14.52 million and VCL was to pay as follows: US$2.4m to be paid upon execution of the Sale and Purchase Agreement (SPA); another US$10m payment within eight weeks of finalising due diligence on assets to be taken over to DIC.
A third instalment of US$2.12 was to be paid six months after the second payment.
The SPA was signed on December 1999, thus by January 2000, the payment of US$12.4m was to be effected, leaving a balance of US$2.12m to be effected by June 17, 2000.
VCL managed to get a loan from the Social Security Bank (SSB), which was guaranteed by Social Security and National Insurance Trust (SSNIT) totaling US$14m and c4.98bn based upon a Memorandum of Understanding (MoU) it signed with SSNIT on December 14, 1998, that SSNIT would purchase STC through its debt swap arrangement with Government for VCL which spelt out the responsibilities of SSNIT.
As would be expected, VCL defaulted in the loan repayments even though it operated the full fleet of the transport company and SSNIT had to settle SSB which became SG-SSB. In any case the personalities behind VCL have raked in millions of cedis and dollars in personal gains at the expense of the taxpayer.
What became known as Vanef-STC was actually acquired with moneys from SSNIT with nothing coming from VCL.
The capital and expertise were expected to be injected into the company to make it more viable and profitable before did not come. If anything at all, it made people to reap where they never sowed.
Meanwhile organisations and individuals mentioned by the SFO report, that benefitted illegally in the transactions which imposed extra burden on the Ghanaian taxpayer went scot free, until the company changed hands again with SSNIT owning 80 per cent shares and the government 20 per cent in Intercity-STC.
In 2005, in what could be described as conflict of interest, the then board chairman of Intercity-STC, Mr Stephen Sekyere Abankwa, who was also the Managing Director of Prudential Bank, engineered a loan of US3,783,935 from his bank for the purchase of 45 FAW buses.
The acquisition of the buses was fraught with irregularities as they were not tested and certified to be suitable for our roads and climatic conditions. According to most of the workers of Intercity-STC, none of the buses could last two years, thus creating payment problems.
This is the loan that the beleaguered Intercity-STC had defaulted in paying, compelling Mr Abankwa to seek a court order to go in for his pound of flesh from the company he one-time was the board chairman.
As in the case of Vanef-STC, SSNIT, the nation’s number one workers’ pension manager, will have to use workers contributions to pay a debt created by some few unscrupulous people who have made fortunes on the blood and sweat of Ghanaian workers.
The divestiture concept under its current execution has not helped the nation and the workers of those organisations and firms. It has become a big joke, since it would have been better giving out these companies free of charge than using state money to purchase a company and handing it over to a few individuals to rape it and create more debts for the state.