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Daewoo City bus project faces logjam

Zahid A Baig

LAHORE: Financial constraints and hurdles in the way of expansion of its network may force Daewoo Pakistan Express Service, City Bus Division, to curtail its existing staff as it is incurring a loss of approximately Rs. 1.5 million per month.

According to the highly placed sources in Daewoo City Bus Division, at present the total strength of its staff is 184, including lower and higher cadre employees.

The organisation is paying over Rs. 1.16 million as monthly salary to these staffers while other expenditures include fuel charges, maintenance of 20 air-conditioned buses being run on one route in Lahore, training of the staff and other miscellenous expenses.

Sources, said the total income from the 20 buses being run by Daewoo is around Rs 2 million per month, thus making it impossible for it to meet the expenditure. They confided that about 30 staffers, including the higher and lower ranking employees, might be asked to go home next week.

To a question, the sources told Business Recorder that the fare was not the only factor accounting for the loss. They said in fact, according to the agreement, Daewoo city bus division had to ply 300 large-size air-conditioned buses under the Urban Transport Scheme.

It imported some 20 buses for a trial-run on Railway Station- Chungi Amar Sidhu route in November, 1999. It had to import 50 buses every month after this fleet. They said that was why it recruited a large number of employees and started imparting training to drivers, maintenance staff and others. While it also carried out some construction at the terminal established at the old GTS halting point near the Lahore Railway Station.

However, a batch of 50 buses was awaiting shipment in Korea but it was not possible to bring them here without discounting of the related promissory note by the National Bank of Pakistan (NBP) for which an agreement had already been signed between the two sides on August 11, 1999.

Nevertheless, after a delay from NBP authorities, Daewoo asked the Punjab government for the resolution of the issue.

The matter was put before the Chief Executive during his recent visit to Lahore. After a go-ahead signal from the Chief Executive, the Daewoo was still awaiting finalization of this matter.

Sources said the Daewoo was ready to expand its network but due to slow pace on their agreement with the NBP, they were unable to import more buses; and without introduction of new buses it was not possible for them to meet the expenditures with the present income and number of buses.