Private transport and vehicle distribution company, J.A. Plant Pool, has publicly expressed interest in bidding for loss-making Ghanaian state transport company – Intercity STC Coaches Limited – should the government finalise plans to privatise it.
Intercity STC (State Transport Company) was in years past the best run and preferred coach in the country, but years of mismanagement has rendered it unprofitable and debt-ridden. A timely financial bailout by STC’s majority shareholder late last year, saved the transporter from being auctioned off due to a $3.8million debt it owed to Prudential Bank, a local lender.
But J.A. Plant Pool, which distributes Chinese-made luxurious Yutong buses and other vehicles in the country, said despite the current state of STC, STCs infrastructure base made it a viable venture and it would bid for it if the government puts it on the market.
J.A. Plant Pool is a subsidiary of Jospong Group of Companies, owned by Ghanaian entrepreneur Joseph Agyepong who has several business interests but is best known for his waste management business-Zoomlion Company Limited- a firm with operations in several African countries including Liberia, Angola and Zambia.
“We are still waiting for government to say it will diversify STC. If that decision is finally taken we will just express interest in it”, Mr. Lolu Akindele, the Managing Director of J.A. Plant Pool said in an interview.
STC is 80% owned by Ghana’s state pension fund SSNIT with the government holding the remainder of 20% but SSNIT has not hidden its desire to sell its stake should the government give it the go-ahead.
Speaking on Plant Pool’s intentions for the STC, Mr. Akindele said his outfit had what it took to turn STC into a profitable business. “In fact there is actually no reason why STC should not perform well because it has the entire infrastructure. All that it needs now is working capital, buses and good management and we can provide all those things”, Mr. Akindele explained.
Plant Pool had in the past supplied STC with buses to augment its fleet, especially when it was nearly grounded on the basis of operating rickety buses.
The Managing Director of STC, Charles Thompson supports privatisation of the bus company if the buyer has good intentions. He said in an interview that “who buys STC should really not be an issue but what is informing that acquisition is key. Some may just be interested in the money and not the future prospects of the company and I think that should be key”.
Mr Thompson’s cautious approach is understandable because STC has been privatised once before but that did not go well. In 1998 Vanef Consortium Limited bought an 80% divested stake in STC but it had to revert to SSNIT in 2003 following Vanef’s inability to satisfy the financial obligations for the divestiture. Since then SSNIT has reportedly been reluctant to invest heavily in STC leading STC to rely on bank loans to survive.
STC which offers nationwide passenger services, also offers parcel delivery and driver training services, is likely to attract many offers when it goes up for sale.
It is however unclear when government will put it up for auction.