Daewoo Intercity

completed

The project is to invest up to US$20 million in construction of new terminal(s), upgrade of the existing terminals, purchase of 60 new buses and refinancing of the existing debt at Holding Level, in the form of an A loan with warrants to Daewoo Pakistan Express Bus Service Ltd (“DPEBSL” or the “Company”), Pakistan’s largest intercity bus service. By investing in DPEBSL, IFC would be supporting a safe, affordable, and reliable transportation service provider in an IDA country, where alternative transportation means to the middle income bracket are limited.DPEBSL has been in operation in Pakistan since 1998 and at present serves approx 4.5 mil passengers/year in 43 cities/towns in Pakistan with 292 buses in operation, which make 450 departures a day in average; in addition DPEBSL provides bus transportation in Lahore city (city bus service) with 69 buses servicing 5 mil of passengers/year. The majority of the intercity bus fleet comprise of buses with 40 seats, however, for better maneuvering in hilly areas, around 10% of the fleet includes 30 seater buses. For the city bus services buses with capacity for 41 passengers are in operation. DPEBSL operations include 16 main terminals and 23 workshops (including 4 mobile workshops). DPEBLS also provides cargo transportation service using eight 16 feet container trucks, equipped with GPS tracking systems, delivering 46 tons of goods daily consisting of general goods like appliances, food, etc. Gas, chemicals, oil cans, cylinders, alcohol/drugs, weapons/explosive are not allowed in the bus or its luggage compartment. Presently, the cargo service is operated between Karachi, Lahore and Rawalpindi. The majority of the terminals and workshops that DPEBSL operates are from leased properties. Lease arrangements are negotiated directly with owners on willing basis. DPEBSL owns several terminals (Rawalpindi Terminal Land, Sunder Workshop Land, Chowkbahadurpur Terminal, Mianwali Land, Sukkur Land). Each of the above mentioned properties were purchased through direct arrangements on willing buyer /willing seller arrangements. The Sunder workshop land was procured from Volvo Pakistan Company. In acquiring land for new terminal(s) there will be no need for expropriation of privately owned land or physical displacement of people i.e. DPEBSL will follow the established procedure which include (i) a survey to determine location and size and a short-list of potential sites, (ii) negotiation on price and other details of the various properties by a joint DPEBSL Construction, Operations and Legal Department, (iii) the legal verification process (iv) a bid and if agreed a down-payment is made, (v) after 90 days the property is purchased.