Can Onatracom bounce back?

There are mixed feelings on whether Rwanda Public Transport Authority (Onatracom) can recover from the huge financial loss it suffered in recent years which has subsequently forced the firm to significantly scale down its operations. According to the 2012/13 Auditor General’s report, Onatracom was reeling from financial mismanagement that saw it accumulate debts totaling to Rwf5 billion since 2008, and despite efforts to turn the company around, there are lingering concerns that the recovery process may be a tall order. Members of Parliament are some of those with doubts that the company could salvage its past glory, even as current Onatracom interim managers said the debt has since been slashed to Rwf1.7 billon thanks to measures taken by government to save the public company. John Bosco Murasanyi, the director general, was among the Onatracom officials who appeared before the parliamentary Public Accounts Committee (PAC) on Tuesday in connection with mismanagement issues highlighted in the AG’s report. Murasanyi said efforts are still underway to privatise the management of Onatracom, promising that this should be sorted out over the next six months. He said the ongoing reforms are guided by cabinet resolutions of June 2012, which also included a decision to extend bailout funds to the company so it can stabilise before it could be placed under private management. “We are optimistic we are on track,” he told PAC members. However, MPs expressed concerns about the findings in the AG report, which included a significant decline in the company’s turnover, from Rwf5 billion in 2008 to Rwf1.5 billion in 2013. They also cited the fact that most of Onatracom’s buses were grounded, with only 50 buses still operational by 2013 out of 160 buses that the company owned, as indicated in the AG’s report. Even those that were still operating, only 32 buses met public transport standards by the time of the audit, with the company needing at least Rwf800 million to repair grounded buses. This saw the firm abandon most of its routes, which previously totaled 130, especially in the countryside. “These are very serious problems that need a very urgent solution. Even if the government was to pay all the creditors, it would still be difficult for you to operate and break even because you have very few buses that are roadworthy,” MP Marie Josée Kankera said. She suggested that the government should expedite the process to privatise the company management to avoid further troubles. Juvénal Nkusi, PAC chairperson, said Onatracom lacked a clear budget framework and a board of directors, noting that this constituted a major threat to the company’s bid to rebuild. The AG’s report indicated that Onatracom failed to produce supporting documents for various transactions carried out, and had accumulated debts, penalties and interest rates. It further indicated that the company was only paying net salaries for its 150 employees but failed to honour its statutory obligations such as remittances to the pension body and medical insurance. The lawmakers wondered how Onatracom will regain its ground in a market that is now dominated by private operators, yet it nearly went under at the time it was more or less a monopoly. It is understood that government committed to provide Rwf2 billion for the purchase of new buses and repairing of grounded fleet once the new management has taken over. editorial@newtimes.co.rw

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Can Onatracom bounce back?