The government will repay debts amounting to Rwf4.6bn which the troubled government public transport company, Onatracom, owes to several suppliers.
This was revealed by the Minister of State for Transport Dr. Alexis Nzahabwanimana during a news conference yesterday, noting that the financial situation of the company cannot enable it to pay all its debtors.
The development comes after government took the decision to step in and resolve the mismanagement issues the transport firm was faced with after some of the firms it owes money threatened to seek legal redress.
Nzahabwanimana said that the government is aware of the problems the company faces following the Auditor General’s report which indicated that the institution was on the verge of collapse due to gross mismanagement.
“We are aware of the problem the company faces but we have stepped in to act. We have overhauled the management and actually the Auditor General is still auditing it to ascertain the root of this problem”.
He added that government is ready to clear the debts since ONATRACOM cannot afford to pay them.
“We are talking to the people it owes Rwf 4.6 billion discussing the terms of payment. We are yet to reach an agreement” Nzahabwanimana said.
He said the company, which plies most rural routes nationwide but is shunned by private transporters, is undergoing thorough streamlining to ensure that it resumes operations smoothly as it connects to the remotest parts of the country.
The news comes as a relief as several debtors including Petroenergy Ltd, a private owned petroleum company, had threatened to seek legal redress against Onatracom for failure to pay its debts amounting to over Rwf 412 million.
Onatracom also owes Rwanda Revenue Authority and Rwanda Social Security Board (RSSB) a combined debt of Rwf 1.118 billion.
The State Minister also said the government will look into the declining fleet of the company to ensure that it remains operational. Only 117 buses of 178 are operational while the rest were grounded due to mechanical problems.
Streamlining the Transport Sector
Nzahabwanimana added that the government was putting final touches on a Public Transport Strategy which will make the transportation of people and goods in and outside the country more efficient.
Among the new plans, the government intends to “professionalise” public transport whereby conditions and strict procedures for people to start public transport businesses will be tightened to meet certain standards.
“We want to remove confusion in the public transport (sector) where someone wakes up and decides to transport people and then in the morning stops. We want to set procedures and requirements to meet before one starts transporting people, especially around the city.
“Only big buses will be operating in the city. The small taxis will eventually phase themselves out because people will be going for more efficient and comfortable buses which carry as many people as possible,” he said
Among other strategies, as time goes by, cars entering the city centre will be limited in a bid to avoid traffic jams and confusion within the city centre with only buses allowed.
He noted that the government is working with a private investor to fast track the construction of the new taxi park in the city centre, in time to resolve the problem of lack of permanent parking and to ensure efficient movement of vehicles and people.