By Olaolu Olusina


Apparently frustrated by the failure of the Federal Government to pay for the mass transit buses it supplied last December as part of the palliative programme for the removal of petroleum subsidy, VON Automobiles Limited yesterday threatened to pull out its buses and drag the Federal Government to court over what it described as a breach of contract.


Minister of Finance, Ngoozi Okonjo Iweala

The Managing Director, VON Automobiles Limited, Mr. Tokunbo Aromolaran, who issued the threat while fielding questions from members of the House of Representatives Committee on Investments when they visited the company in Lagos as part of their oversight functions, disclosed that his company alone was being owed about N1.6billion despite supplying about 195 mass transit buses so far.

Aromolaran said the debt was affecting the operations of his company as the contract nearly disrupted its production plan.

Describing the whole arrangement as a double jeopardy for his company, he explained that VON Automobiles was made to dump its production plans and assemble vehicles that were not paid for, stressing that some of the vehicles were still waiting at the company’s premises due to the failure of the Federal Government to pay.

“You can see some of the vehicles parked outside there. I can’t move them to Abuja because the ones we have supplied have not been paid for. It is a double jeopardy for us as our fees are now being slashed without our consent. Imagine what we went through supplying the initial batch just less than 48 hours. They wanted the buses in Abuja within 48 hours and we had to mobilise to get the buses there. Four of the buses even got damaged on the way as we couldn’t have gotten 50 drivers to drive them to Abuja in 48 hours,” he stated.

According to Aromolaran, “None of the companies which supplied the buses have been paid. VON alone is being owed N1.6 billion and it’s almost six months now since we supplied.

Imagine the interest we are paying on the money to our bankers. You don’t deal with the private sector as if you are dealing with government. We are a third party to the arrangement and our money is our investors’ money,”   he told the committee, expressing his frustrations.

He called on the committee to impress on the National Assembly the need to initiate laws to protect the local automotive industry, saying the tarrif differential between imported completely knocked down (CKD) components and fully built vehicles which currently stands at between five to 10 per cent should be increased to 40per cent.

Chairman of the committee, Hon. Mohammed Onawo, who was later taken round the company’s assembly plant along with members of the committee, promised to look into the challenges facing the company. “We have seen the frustrations and challenges here despite the potential. We are going back to report to the House what we have seen in order to address the various challenges,” Onawo said.


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