PESHAWAR: The prospect of the imminent closure of the Peshawar Bus Transit has loomed large due to the provincial government’s failure to pay around Rs1 billion dues to five private companies managing different sections of the public transport system.

Daewoo Pakistan, which runs the fleet of 244 buses of the BRT catering to 300,000 commuters of the provincial capital, said its amount to be cleared by the government had surged from Rs450 million last month to Rs750 million.

Four other companies are also claiming Rs300 million from the government for their services.

On June 1, the Daewoo management again petitioned the provincial government for the payment of dues saying it might not be able to operate the bus service due to insufficient funds.

Bus service operators ask govt to immediately clear Rs1bn dues

Saying its dues total Rs754 million, the company warned it would close operation anytime as “non-payment of money has perpetrated severe financial stress on it.”

Daewoo had earlier asked the government to resolve the issue on three occasions, first on April 27 and later on May 17 and May 23.

On May 23, it requested caretaker Chief Minister Mohammad Azam Khan to intervene to resolve its liabilities issue.

Its latest letter, which is addressed to the chief minister, said, “In continuation with utmost urgent matter, it is bringing to his notice an alarming issue of great significance. The TransPeshawar, a subsidiary of KP Urban Mobility Authority and government entity responsible for overseeing mass transit in the province, is currently breaching the executed contract.

Despite repeated requests and reminders, it has neglected to release due payments to us,” it said.

Daewoo added that the outstanding amount had escalated to Rs754 million inclusive of invoiced amount for the months of February, March, April and May.

It said that numerous meetings and correspondences had taken place to convey the profound concerns to the authorities regarding non-payment of dues but regrettably, all those efforts had gone to waste as the issue remained unaddressed.

“These funds are essential for the procurement of diesel, lubricants and parts well as for covering expenses related to electricity and salaries. Timely disbursement of payments as stipulated in the contract is essential for meeting these obligations,” it said.

Two senior officials Dawn spoke to feared that further delay in the clearing of dues was likely to cause the suspension of the bus service.

“The imminent closure of service is lurking just around the corner,” a senior official said.

He said that the TransPeshawar, the government owned company, responsible for the management of the mass transit had over Rs450 million in its accounts.

The official said the company had asked for the finance department for another Rs400 million, which is likely to be released very soon.

Another official, who declined to be identified, said that under the contract, around 90 per cent of invoices submitted by the companies should have to be cleared within 10 days.

He, however, said payments were being delayed without any cogent reason.

The official said companies usually had the credit line from banks to meet short term liabilities but prolonged delay in payment was like a recipe for disaster for them.

“No one has such a huge war chest to meet the burgeoning liabilities in this economy,” he said.

An official told Dawn that some “influential” people wanted to cancel Daewoo’s BRT lease to award it to another firm.

The documents available with Dawn show that another summary was in circulation to change the composition of the TransPeshawar board of directors by making the provincial minister for transport and mass transit as its chairman in violation of Section l of the Fit and Proper Persons criteria of Public Sector Companies (Corporate Governance Rules) 2013, which barred someone with a conflict of interest including political office holders whether or not in a legislative role to be appointed as director.

Transport and mass transit secretary Zakaullah Khattak did not respond to the calls and texts of this correspondent.

Published in Dawn, June 3rd, 2023