Intercity STC gets US$35m investment
State transport company, Intercity STC Coaches Limited has received a major boost by signing an agreement with Nordic Logistics Limited for the procurement and operation of 100 buses valued at 35 million US dollars.
Per the agreement, Nordic, under the six-year a six year period is expected to initially supply the 100 buses after which it can increase the number 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.
Speaking to Citi Business News, the Chief Executive Officer of Nordic Logistics Limited Nana Atakora Bonsra was hopeful the partnership will bring back Intercity STC as a major player in Ghana’s transport industry.
“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,” he said.
“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,” he stressed.
He explained that the new approach by the 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 which has 80% and government which commands 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.
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