Tondeka Metro at risk of losing city bus service

Kampala, Uganda | THE INDEPENDENT | Tondeka Metro, which has operated the City Square-Ntinda bus circuit for three years, faces the loss of its business due to a dispute with Nairobi-based fleet financier RentCo Africa. The bus service was suddenly halted six weeks ago, stranding many commuters, according to 256Businessnews.com.

RentCo Africa repossessed the fleet over a leasing payment disagreement, and images of the buses – originally bright orange but now repainted blue, green, and white and rebranded as “Metro Bus”- surfaced on social media on April 18. Despite legal battles, including restraining orders, city bailiff Moses Kirunda seized the buses for RentCo. Tondeka has remained silent pending a public statement, while RentCo has not yet responded to inquiries.

The core of the dispute lies in how Tondeka’s payments for import duties on locally assembled bus components should count against their lease payments, a credit RentCo refuses to acknowledge. Initially, RentCo agreed to supply fully built buses, but Tondeka later opted for local assembly, bearing substantial costs for import duties and assembly work – expenses they believe should reduce their lease obligations.

In March, RentCo escalated the situation by repossessing the fleet, reportedly transferring or selling it to influential but unnamed parties poised to take over Tondeka’s contract with the Kampala Capital City Authority (KCCA). This action proceeded despite legal injunctions, underscoring the severe legal and operational challenges Tondeka now faces.