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By Ravi Ladduwahetty

The Government will shortly enter into partnership with the private sector where the latter participates in equity in each of the 13 peoplised bus companies in a bid to make the public sector bus transport service more financially and operationally viable.

The thirteen bus companies which have been listed for restructuring are: Colombo Metropolitan Bus Company Ltd which has a fleet of 1306 buses, 5,682 employees and Rs. 998 million turnover, Gampaha Bus Company Ltd with an operational flee of 945 buses 4688 employees and Rs. 792 million turnover, Kalutara Bus Company Ltd which has 538 operational fleet 2,785 employees and Rs. 541 million turnover, Mahanuwara Bus Company Ltd which has an operational fleet of 773, employee strength of 3599 and a turnover of Rs. 795 million, New Eastern Bus Company Ltd with a fleet of 407 buses employee strength of 1,853 and a turnover of Rs. 273 million, Nuwara Eliya Bus Company Ltd with a fleet of 403 buses, 1,923 employees and a turnover of Rs. 435 million, Rajarata Bus Company Ltd with a fleet strength of 595 buses, 2530 employees and a turnover of Rs. 521 million, Ruhuna Bus Company Ltd with a fleet of 917 buses, 4,073 employees and a turnover of Rs. 518 million, Sabaragamuwa Bus Company Ltd with a fleet of 1048 buses, 4,419 employees and a Rs, 717 million turnover, Uva Bus Company Ltd with a fleet strength of 627, employee strength of 3,348 and a turnover of Rs. 682 million, Vavuniya Peoplised Bus Company Ltd with a fleet strength of 59 buses, 234 employees and a turnover of 33 million and the North Western Regional Transport Board with a fleet strength of 814 buses, employee strength of 3,790 and a turnover of Rs. 831 million

The Government will hand over the new management to the new investor and we'll enter into a shareholders' agreement and the management contract entered into with the new operator and the company. In view of the urgency of this investment, it is proposed to address the regulatory issues through the contractual arrangements until the Transport Regulator is sufficiently strengthened, Chairman of the Public Enterprises Reforms Commission Dr. P.B. Jayasundera told the Daily News in an interview.

The land and the building and the immovable assets/ property used by the bus operators will remain as the Government property and will be leased on a long term basis in the form of an annual rental for operational requirements, he said.

The employees will be assured of continuity of employment and there will not be any retrenchments, the Government has assured.

The Government has called for Expressions of Interest where the private sector comes up with proposals where thirteen partners/ consortia goes into equity participation with each of these thirteen companies where they will not only infuse capital in terms of equity/loan capital, but also in the efficient running of these operations, he said.

The Government has also assigned the task of completing valuation of each of the companies to two firms of Chartered Accountants- KPMG Ford Rhodes Thornton & Co and Ernst and Young. The former will do the valuations of New Eastern Bus Co. Ltd, Vavuniya Peoplised Bus Company Ltd and the Northern Regional Transport Board. The remaining ten companies will be valued by KPMG Ford Rhodes Thornton & Co.

Dr. Jayasundera also said that the valuations of these companies will also help to realise what capital input will be required of the private sector which will mean that they will be run more efficiently as the private sector will ensure the efficient running of these services.

The financial inputs into these companies will be mandatory as the Government infuses over Rs. 3 billion annually and this has not been instrumental in saving these companies from the disastrous situation that they have been in over the years. Thus, this process of restructuring has been mandatory where there are financial inputs from the private sector, he said.

Asked about the collaboration, he said that there was no limit to the joint ventures. It could be one partner or it could be even more than that, he said.

The Government has also given a firm assurance that there will not be any tariff revisions till June 2003. Dr. Jayasundera said that the recent recommendations of the National Transport Commission enabled the bus transport sector to have a tariff increase in July and the next increase will be only after June 2003.

The National Tariff Policy which has been set out by the Commission has been that increases would be permitted only if the proposed increase in greater than the recommendations of the Fares Index, which has to have the approval of the Transport Minister. The Fares Index has to be determined on criteria such as Wages, fuel, spares, exchange rates and their corresponding increases.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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