Private transport companies that operate across cities may in the coming months have to prepare to face stiff competition from the one-time industry leader, STC. The State Transport Company is repositioning to regain its status in the transport sector. It is now partnering two private transport companies as part of restructuring processes to turn around its fortunes.
The two companies, Focus-Four Limited and Smice Group have entered into different mutual service-agreements with STC. The arrangements have been in operation for just about a month now. The development is coming exactly a year after the new management and Board of Directors took office.
Throwing more light on what the two partnerships entailed, the Managing Director of Intercity STC, Samuel Nuamah Donkor revealed to JOY BUSINESS the initiative is part of moves to address STC’s longstanding operational and financial challenges and make it a profitable company.
“When we came in, nobody was prepared to do business with STC because they thought the company was bad news. But we were able to develop our business plan and they found out that the risk was not as high as they thought. So Smice Group gave us 25 urvan-buses without us putting in any collateral. It was agreed that, we were going to run the buses so that we pay them on a daily basis, so that the bank can collect their monies and amortize the facilities. But of course we’ll pay for that operational cost out of it and the rest can be paid to us. And then, because our buses were ageing, Focus-Four on the other hand brought in 2 new buses and those are being deployed on the Lome and Abidjan routes. And then we have that arrangement where we run the business together and at the end of the month, we deduct the direct operational costs and then share the profits 70-30 – that is 70% for Focus-Four and 30% for STC.”
The Managing Director of focus-four Company Limited, Moses Asamoah also explained to JOY BUSINESS aside providing buses, they are also offering some unique services to passengers to enable STC beat competition and thereby achieve the ultimate goal.
“Other people would just purchase the vehicles and hand it over to STC to run, but we’re saying that if we do that, it would be the same STC system they will be operating and so we’re going to do things differently. STC would be operating the buses with their drivers but we’re doing the maintenance of the vehicles as well as the management of the human resource including staff remuneration. And here you and I know that government workers are almost always under-paid and so we have already doubled the pay of the drivers who now feel well-motivated”.
He added “We’re in the 20 th century and everything must change and so we are doing things differently. For example if someone is travelling from Accra to Lome and is thirsty, the only option available is just the bottled or sachet water sold at the road side which is not that hygienic. So we’re saying that it is better we provide water and snacks on the buses for a little cost of say 5 cedis which could be seen as negligible compared with the cost of the ticket. Our two buses currently plying the Lome and Abidjan routes also come with toilet facilities as well as special on-board services such as food and internet. There is a 6-member crew on board including two drivers, two police officers and two bus attendants”.
SSNIT has 80% shares in STC whilst the remaining 20% stake is owned by government. SSNIT wrote to government indicating plans to offload its majority stake in the company last year but did not materialize.
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