Commuter bus operator Tondeka Metro loses city commuter business in web of intrigue

April 19, 2024 in Business, Companies, Trade & Industry, Transport by Editor

Tondeka’s Golden Dragon buses now wear a new colour scheme under the brand name Metro Bus

Three years after launching a city bus service on the City Square-Ntinda circuit that seemed to have gained traction and favour with the travelling public, bus operator Tondeka Metro is on the verge of losing the business to yet unknown parties in a web of intrigue involving Nairobi based fleet financier RentCo Africa.

Tondeka unceremoniously went off the market six weeks ago, leaving commuters stranded. Now, while the company is not willing to talk about their apparent predicament, emerging information indicates that RentCo Africa has repossessed the fleet in a dispute over lease payments. Images of the buses, repainted from the original bright orange colour scheme to a blue – green and white coloured scheme and rebranded as Metro Bus, started circulating on social media platforms late April 18.  

RentCo retained the services of renowned city bailiff Moses Kirunda, who impounded the buses a while ago, despite the existence of retraining orders by the courts. Officials at Tondeka declined to comment on the developments, promising they were due to issue a public statement. RentCo had also not responded to our inquiries at the time of filing this story.

According to several persons familiar with the situation however, Tondeka and RentCo have been embroiled in civil court over the past couple of years, wrangling over how to treat the money Tondeka paid in duty on the importation of the components and sub-assemblies and local assembly of the 5 buses that were being used for market validation studies. While Tondeka wants these monies credited against their outstanding lease payments, Rentco is not acquiescing to the request.

256BN has learned from independent sources that according to the initial agreement, RentCo was supposed to supply fully built buses that were ready for the road. Along the way however, Tondeka opted for local assembly. RentCo paid Xiamen China-based Golden Dragon Bus Company, to ship the components and sub-assemblies for the five units to Uganda. Tondeka picked the tab for related import duties and taxes, as well as the cost of local assembly which some sources describe as having been “substantial.”

To Tondeka’s dismay, RentCo ignored to change the terms of the lease contract to account for these costs which the lessee preferred to treat as advance payments on the lease charges. Matters boiled over in March this year, when RentCo moved to confiscate the fleet, and apparently re-assigned or sold it to highly influential but unnamed individuals who intend to take over Tondeka’s commuter contract with KCCA. This move was executed, despite subsisting court orders to the contrary and nobody seems capable of stopping the apparent grab.