STC, Nordic sign US$35m bus deal
The Intercity STC Coaches Limited (ISTC) has signed an agreement with Nordic Logistics Limited for the procurement and operation of 100 buses to boost the operations of the state-owned transport company.
Nordic, under the six-year agreement signed last month, is expected to initially supply 100 buses valued at US$35million and when convenient to the parties, increase the number of buses to 300 during the tenor of the agreement. The buses will be operated on alliance bases.
Under the alliance arrangement, ISTC as a business entity, does not pay any money upfront for the buses -- nor does it acquire the fleet outright. It operates the fleet together with its partners and the profit is shared between the two parties on a pre-agreed percentage.
According to the transactional advisor, Dusk Capital Limited, under the Public-Private-Partnership (PPP) arrangement for the new 100 buses, Nordic shall be responsible for the payment of the salaries and wages of drivers recruited, maintenance and servicing, fueling and lubrication of all buses, and insuring of the buses.
Nana Atakora Bonsra, Chief Executive Officer of Nordic Logistics Limited, said: “We are excited about this partnership with ISTC which will bring back the once vibrant and reliable bus operator back on its feet.
Mr. Bonsra added that negotiations with the bus supplier-VOLVO--is far advanced and all working modalities both locally and internationally are in place for the smooth takeoff of the project.
Given STC’s important role in the past, we believe that the company can reclaim its market position as the leading transport company in the country with this mutually beneficial partnership
The new approach by the struggling company to acquire buses under various commercial arrangements to augment its fleet of buses, is meant to make the company financially sound and reduce its reliance on major shareholders for assistance.
STC has over the past few years relied on its shareholders -- SSNIT (80%) and government (20%) -- to pay its numerous creditors.
With this PPP arrangement, it is expected that over 300 direct and indirect jobs will be created for the youth of the country.
The once vibrant STC, which offered transport services between Accra and all major regional capitals in the country, and other West African countries such as Burkina Faso, Cote d’Ivoire, Togo, and Benin other among others, has been a pale shadow of itself due to myriads of challenges, including lack of buses.