The President Nana Addo Dankwa Akufo-Addo has handed over 100 Daewoo Zyle buses funded by the Agricultural Development Bank (ADB) to the Intercity State Transport Company (STC) Coaches Limited.
At a cost of US$13million, with a three-year repayment period, the bank provided 75 percent of the funds with STC providing the other 25 percent from its Internal Generated Funds (IGFs). The handing over ceremony forms part of the President’s current tour of the Greater Accra Region.
President Akufo-Addo lauded the management of STC for turning around the fortunes of the company after government provided 50 buses four years ago and now is able to procure 100 buses on its own balance sheet. “This is an example that should be emulated by all the State Owned Enterprises (SOEs). They should be professionally run and commercially driven,” the president said.
Managing Director of Intercity STC Coaches Limited, Nana Akomea, noted that the company has traditionally relied on government or taxpayer support in acquiring buses and keeping the company afloat.
“After a long period of decline, the government came to our aid in October, 2016 by acquiring 50 brand new buses. Since then the company has managed to leverage the operations of these 50 buses and improved the balance sheet so that today STC is able to provide for itself, on its own balance sheet, 100 new businesses.
“I have every confidence that this is a signal that STC has turned a corner and we are no more going to rely on the taxpayer and a burden on the taxpayer. We are going to be a company to stand on its own, make our profits and give the taxpayer some money in return. Agricultural Development Bank (ADB) came to our assistance and due to our strong balance sheet, the bank gave us 75 percent of the funds for these buses. We thank the ADB,” he said.
Dr. John Kofi Mensah, Managing Director of the bank noted that the bank’s support to the company is historic since this is the largest fleet of buses purchased by the company in 20 years.
“With the great work done by Intercity STC, the board, management and staff since 2017 to bring Intercity STC Coaches Limited back to life, we didn’t hesitate when we were approached for assistance by the Management to help them augment their fleet of buses. I wish to commend the Office of the President, the Ministry of Transport and the Ministry of Finance for the waiver of port charges of about GH¢25million on the buses which would have been transferred onto patrons of the STC bus service.
We are aware the management of Intercity STC Coaches Limited have opened more terminals nationwide and this gives us optimism that they will repay back the loan facility even before the three-year period so they can access more funds for more buses in the competitive sector they find themselves,” he said.
Dr. Mensah noted that the past three and half years have been highly remarkable for ADB and with the mandate given by the President, the Bank has refocused its direction to positively impact the agricultural sector.
“The bank has taken its rightful position as the lead bank providing financial intermediation to the country’s agricultural sector. We have been the major partner for key government programmes such as the Planting For Food and Jobs, Rearing For Food and Jobs, Planting For Export and Rural Development, One District One Factory and in this year launched the ambitious GH¢500 Million Poultry Value Chain Initiative,” he said.
The bank, he noted, also in this year, collaborated with the Outgrower Value Chain Fund (OVCF) and GIRSAL to implement the Rice Value Chain project aimed at reducing the volume of rice imported into the country.
“Also in July this year, the bank pre-financed the purchase of 1,300 outboard motors at a cost of GH¢19.8million for the Coastal Development Authority (CODA) and the Ministry for Fisheries and Aquaculture Development. This ceremony marks the beginning of a new and improved partnership between the Agricultural Development Bank and the Intercity STC Coaches Limited and we are hopeful it will be a fruitful beneficial relationship which will benefit the good people of Ghana.”