Metro mass loses GH¢12.5m monthly

• Posted on March 26, 2015March 26, 2015
• by Nana Kwesi Coomson
• Comment

Investigations by The Finder has revealed that Metro Mass Transit Limited (MMTL), a public transportation company, is losing about GH¢12.8 million revenue a month because 531 out of the 800 operational buses have been grounded as at March 12, 2015 due to lack of spare parts.

Each bus makes an average daily account of GH¢800, translating into GH¢424,800 daily revenue loss from the 531 operational buses that have been parked.

The buses have been parked because simple spare parts such as brake pads, filters, brake disc and hob are not available.

Reliable sources told The Finder that as a result of the situation, more than half of the company’s 5,000 staff are idle.

According to them, some depot managers in dire need of spare parts are aligning used parts such as brake pads and reusing them.

They noted that if this is happening, then radiators could also be mended and reused, which could cause fire.

To buttress their point, the sources said one MMT bus travelling from Accra to New Edubiase caught fire at Diaso and was burnt into ashes around 2pm yesterday.

Workers fear the company may collapse if the situation is not resolved immediately.

According to them, the acting Managing Director (MD) wrote to the Transport Ministry for approval to buy spare parts since there is no board to resort to.

The sources said the approval was received last Monday and the acting MD can now purchase the needed spare parts.

The Finder learnt that the acting MD was being cautious to avoid being accused of purchasing items without approval, as happened to the interdicted former MD who found it difficult to understand why buses had to be parked due to the lack of simple spare parts.

The sources told The Finder that the company has not purchased spare parts since June 2014.

This is because the dissolved board failed to approve the evaluation report of a National Competitive Tendering process for the purchase of spare parts.

The then board and former MD were asked to step aside following a demonstration by MMTL workers on some missing buses and the fracas between the former MD and the board.

The board accused the former MD of spending without approval, an accusation that  he denied.

It will be recalled that the evaluation report of a National Competitive Tendering process, dated May 2014, recommended that MMTL negotiate with Rana Motors for award of contract of GH¢10,690,200 for delivery on call basis for fully complying with all requirements of the tender.

The evaluation report went on further to say that C. Woermann, which placed second in the tender, would be granted the opportunity should Rana Motors turn down the offer.

However, the Entity Tender Committee, headed by the then board chairman, abandoned the evaluation report recommendation and directed the MD to award the contract to Allied Home Stores Limited.

The committee based its position on value-for-money principle, saying awarding the contract to Allied Home Stores Limited would save MMTL about GH¢1 million.

However, the former MD, in his response dated July 16, 2014 and addressed to the Entity Tender Committee Chairman and its members, rejected the attempts to divert the contract to Allied Home Stores Limited.

In his letter, the former MD explained that the evaluation report was clear that Allied Home Stores Limited failed to submit audited accounts in its tender documents as stated in the tender invitation and was disqualified in line with section 22 of the Public Procurement Act, Act 663.

He explained that the evaluation process that made the tender of companies non-responsive is the same that was used in the case of Allied Home Stores Limited, adding that to recommend Allied Home Stores Limited for the contract purposely based on cost savings would be problematic and subject to all manner of interpretations.

He, therefore, insisted that the conclusions and recommendations drawn in the evaluation report should form the basis for the award of contract for the supply of tyres.

The then board Chairman, who was also the chairman of the Entity Tender Committee, reported the matter to the entire board.

In a memorandum dated July 9, 2014, signed by Emmanuel Amoah, Board Secretary, and addressed to the Managing Director, the entire board directed that the contract be awarded to Allied Home Stores Limited, subject to the submission of audited financial statement.

The Managing Director duly offered the contract to Allied Home Stores Limited.

When the contract was awarded, Allied Home Stores requested a price increase of 28% over what was stated in its bid, but it was offered 15%.

In a letter dated September 3, 2014, Allied Home Stores said “we regret that we are unable to accept your offer of 15% increase in the original tender prices.”

Allied Home Stores also requested approval to submit insurance bond in lieu of bank guarantee, which also raises questions about the financial capability of the company.

By Elvis DARKO, Accra