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| National |
| Govt to dissolve Shire Bus Lines |
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by
Maxwell Ng’ambi, 14 April 2007
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08:09:02
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Finance Minister Goodall Gondwe said on Tuesday government will soon dissolve Shire Bus Lines and start a new passenger transport company because Shire Bus Lines has failed to serve Malawians and cannot be salvaged.
But Parliamentary Budget and Finance Committee chairperson Friday Jumbe, while applauding the move, said he hoped government would not liquidate Shire Bus Lines to run away from the company’s huge debt owed to its suppliers.
In an interview on Tuesday, Gondwe said: “We have found out that Shire Bus Lines has been run down completely. It cannot be revitalised. We will liquidate it shortly and start a new company that will have about 60 buses.”
The government’s economic juggler said it would be questionable to revitalize the bus company now, saying the only option was to start a new company.
“We are doing this in order to improve the public transport system so that we go back to the 80s and 90s when the public bus service system was working in the country,” Gondwe said.
Asked what will happen to employees of the company, the minsiter said the new company would absorb some but those willing to retire would be allowed to do so.
“Lucky enough, the company has a pension scheme, therefore those who would want to retire will be taken care of,” said Gondwe, refusing to indicate how many would lose their jobs.
Neither Gondwe nor Shire Bus Lines executive manager Elton Nsapato could say how much the company is worth and how much it owes its creditors but the minister said creditors would be paid their money in full.
Gondwe also declined to disclose the shareholding structure of the new company. The bus firm is presently 100 percent government-owned. In 2005 the High Court in Blantyre ruled that although all shares in the company are owned by government, it is a private company.
On assets, Gondwe said government would see whether the new outfit should use some Shire Bus Lines assets, especially garages and buildings across the country.
Gondwe could not say when the new bus company would start its operations but said the public should rest assured that they would not suffer between the time of the dissolution and the starting of a new company.
“Well, I would not exactly tell you when the new bus company is starting but it is soon and will be done rapidly. Therefore, workers and the public should not be worried,” he said.
Asked why government would not just give the 60 buses to Shire Bus Lines instead of starting a new company, Gondwe said the present bus company was not in good state to be revitalised.
“We have looked at various ways of how the company can be revitalised but it is not possible,” he said.
He disclosed that government has for the past three months been helping the company in paying out salaries to employees.
Jumbe, who said his committee was not aware of government’s decision to dissolve Shire Bus Lines, applauded the move to revitalize the public transport system in Malawi but said the company’s local and international creditors could lose out. He asked government to explain how the creditors will recover their money.
“I suppose the liquidation is based on the fact that the balance sheet of the company is very bad. The notion that the new company should not be chased by old creditors is understandable but once the company is liquidated creditors would get very little,” he said.
But the former Finance Minister said the move to start a new bus company was a welcome one because Shire Bus Lines was at the moment not properly servicing rural areas.
“The private sector cannot cover the whole country, therefore, travelling to and from various rural areas is difficult but the setting up of a new company should be done in good faith in respect of creditors some of whom have supplied spare parts, fuel and so on,” he said.
Nsapato declined to comment on the matter on Monday.
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