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Monday, 17 February, 2003, 10:56 GMT
Sri Lanka bus selloff hits skids
Children on Sri Lankan bus
The government promises more efficient bus services

A British-led consortium has missed the deadline to buy a 39% stake in the controversial 1.5bn rupee ($9.6m; $15.5m) privatisation of six state-owned bus companies.

The payment was due last Thursday, but managing director of Ibis Transport Consultants Ian Barrett told BBC News Online the deal has not been concluded.

There have been a number of confusing statements made by a number of government officials

Ian Barrett
Ibis Transport
"The equity of the local bus companies has not been finalised," he said.

The first instalment of 60% was due on 13 February with the balance due by March.

Mr Barrett could not confirm if the deal was still on.

"I'm no in a position to make any comment," he said but added that "there have been a number of confusing statements made by a number of government officials".

On the buses

The British-led consortium - the only qualifying bidder - includes Ibis Transport Consultants and Transbus International, which is part of the giant Mayflower corporation.

Ibis project director Ian Bulley told Sri Lanka's Daily News on 31 October that a legal contract had been agreed and payment would be made to the government within three months.

The sale of the bus companies had already been delayed twice - in August and September last year - to allow bidders to arrange finance.

At the weekend, Sri Lanka's Sunday Times quoted transport minister Tilak Marapana as saying to government had promised to guarantee the consortium's investment.

He was quoted as saying that 30% of the value of the shares would be underwritten so that Ibis could obtain loans to operate the bus network.

The conditions are reportedly contained in an agreement being drawn up by the Public Enterprise Reform Commission and Ibis.

Management limits

The privatisation was also conditional on no company managing more than three of the six bus companies.

But Mr Barrett confirmed to BBC News Online that he and Ibis' Ian Bully had been nominated to the board of the local partner and bus operator, Jayalkshmi Transport Services.

He said they have not yet been appointed.

A Treasury official said a meeting of the Cabinet Appointed Tender Board has been set for 27 February to decided the future of the sale.

The six companies run more than 5,400 buses and employ over 23,000 workers.

Unions have opposed the sale because of its lack of transparency and consultation.


Peace efforts

Background

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See also:

14 Jan 03 | Business
14 Feb 03 | Business
10 Dec 02 | Business
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