Nigeria: Crisis Looms over Fuel Subsidy Buses

By IndepthAfrica
In News
May 10th, 2012
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The Federal Government may have run into a spot of bother with the mass transit buses that it hurriedly procured at the height of the protests over the withdrawal of subsidy of petrol in January this year.

The six automobile dealers which provided the buses have threatened to recover them from the transporters of mass transit schemes in the 36 states of the federation and FCT, THISDAY has learnt.

The automobile dealers, or bus providers, as they are termed by the Urban Development Bank of Nigeria Plc (UDBN), which placed the orders on behalf of the Federal Government, are incensed that five months after they were promised that they would be paid immediately upon supply of the buses, they were still being owed their money.

At the peak of the protests against the withdrawal of subsidy on petrol, the Federal Government had hurriedly rolled out a list of palliative measures under the Subsidy Reinvestment Empowerment Programme to cushion the effect of the increase in the price of petrol, one of which was to buy 1,600 mass transit buses for the 36 states of the federation and Abuja.

A few days after the federal government’s promise, it launched 1,100 of the 1,600 buses in an elaborate ceremony at the Eagle Square, Abuja, under a mass transit programme.

The buses were to be made available to credible transporters under a N15 billion revolving loan to be managed by UDBN.

However, the six automobile dealers – ANAMCO, Berbedos Motors, Stallion Motors, Elizade, Globe Motors and the Innoson Group – have threatened to recover the buses from the transporters over non-payment for the vehicles since they were supplied five months ago.

Representatives of the six auto dealers, who spoke to THISDAY, said they were left with no option than to recover the buses because they were uncertain of when and if they will ever be paid by the federal government.

They explained that on January 6, they were summoned to Abuja and met with President Goodluck Jonathan, who along with key members of the Federal Executive Council, had appealed to them to supply 2,500 buses in extremely short notice.

“We were given 48 hours to supply the buses and were promised that they would be paid for immediately as the funding for the buses was already in place.

“On this basis, we got letters from the Urban Development Bank and supplied 1,250 buses, which were launched in Abuja by the Federal Government.

“Sadly, since we supplied the buses, we have been forced to contend with the federal government bureaucracy and unnecessary delays to pay us our money,” said one of the representatives who spoke on behalf of the group.

He said the total cost of the 1,250 buses that the six auto dealers had supplied amounted to N8.9 billion but that not one of the dealers had been paid its money.

He added that the dealers were now under severe distress as they had to rush around and borrowed funds and, in some instances, the buses, under very stringent conditions from the banks and other sources to meet the federal government’s demands, and that their creditors have put them under tremendous pressure to repay the debts.

He said that the dealers have made several appeals to the Federal Ministry of Finance and UDBN to pay the N8.9 billion owed them and that the Finance Minister and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala and her counterpart in the Ministry of Trade and Investment, Mr. Olusegun Aganga, had been supportive.

“They have done everything in their power to pay and from what we gathered the finance minister had even signed off on the authority to pay by the Urban Development Bank,” he said.

The representative, however, disclosed that their plight had been worsened by the fact that the National Assembly has now waded into the issue and was insisting that funds for the buses be appropriated and channelled through the Ministry of Transport.

He said the auto dealers were left with no choice than to start recovering the buses from the transporters as they had held on to the spare keys to the vehicles.

“They will be easy to retrieve because we know the transporters. We physically handed over the buses to the transporters selected by the federal government, states and the Federal Capital Territory,” he stated.Thisday

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