TOUR bus operators with loans to repay for their vehicles are caught between what they feel is an unfair relief scheme and having their buses towed away by creditors.

The tourism industry sub-sector has had almost zero income for more than a year due to movement restrictions to curb the Covid-19 pandemic, yet operators still have to repay their loans from credit companies for their vehicles, said Steven Chong, who represents a group of tour bus operators on the peninsula.

The president of Persatuan Pengusaha Bas Persiaran Semenanjung said there are 2,000 tour bus and minivan companies which collectively own more than 8,000 of these vehicles.

After last year’s movement control restrictions, around 2,000 vehicles were towed away due to operators’ inability to repay credit companies, Chong told The Malaysian Insight.

And if operators shun the government’s special guarantee scheme for bus and taxi loans, he foresees another 6,000 buses being hauled away by creditors, who will usually put them up for auction.

Effective June, tour bus companies can apply to credit companies for the scheme called Skim Rehabilitasi Sewa Beli Bas Dan Teksi, which was introduced under the Pemerkasa Plus stimulus package.

The scheme is for credit companies that provide loans to bus and taxi operators, and is managed by the Finance Ministry’s Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP), a company which administers and manages government guarantee schemes.

The scheme, with RM1 billion in funding, supports credit companies in giving a loan moratorium of up to 12 months and an extended repayment period, as well as a 50% guarantee on restructured hire purchase credit facilities.

Eligible bus and taxi operators are supposed to benefit from a 12-month moratorium and an extended loan tenure of up to 36 months.

Chong said tour bus companies typically do not take bank loans and thus they do not qualify for the loan moratorium.

Instead, they borrow from credit companies, which auction the vehicles when bus operators can no longer repay their loans. If the auction price cannot cover the loan amount, the bus operator is liable for legal action, and in the worst-case scenario, face bankruptcy.

However, tourism transport players say they have difficulty applying for the scheme. One requirement is that the tour company’s 2020 financial statement must show a surplus.

“Travel and tourism companies have had no business in the past year. How can their financial statements show a surplus?” said Ellen Lee, vice-president of the Malaysia Inbound Chinese Association that promotes local tourism to Chinese nationals.

Lee added that the hire-purchase restructuring terms result in interest doubling up to as much as RM150,000 for a RM400,000 loan, she said.

Whereas, under the usual five-year loan agreement for commercial vehicles, interest is usually between RM60,000 and RM80,000.

Lee said the restructuring plan was unequal and unfair but that some operators in dire straits would still opt for it for lack of any other lifeline.

She said credit companies should also share some of the burden of these difficult times as once travel and tourism resumes, bus operators will be able to repay their loans.

Lee added that some tour transport operators also felt trapped into accepting the scheme. Though they might be willing to give up the vehicles, credit companies are no longer keen to tow them away for auction.

“They have no space to park so many buses, and in such times, no one is interested in the auction.”

She said the previous practice of selling old tour buses to factories for transporting workers was no longer done as factories are operating under limited conditions.

Malaysia had thousands of tour buses in preparation for Visit Malaysia Year 2020, said Malaysian Chinese Tourism Association president Albert Tan.

Tourism players were hoping tourist arrivals last year would exceed the 26.1 million in 2019, but these hopes were quashed when the Covid-19 pandemic emerged.

“In April last year, after the pandemic started, there was this parking lot in Tanjung Malim, where you could see around 300 tour buses that were towed away just sitting there,” Tan said.

Tour bus operator Chai Kok Sing, 61, said he is in such dire straits that he is just waiting for his credit company to tow away the five new express buses he bought before the pandemic.

“The loan is RM90,000 each month. In the past year, I have not been able to pay. If they (creditors) want to tow it away, I will gladly give it to them,” said Chai who has worked in tourism for 35 years managing local and foreign tour groups, and has a fleet of 20 tour buses and seven vans.

He doesn’t foresee a recovery for tour transport companies anytime soon, as even when domestic tourism is allowed, he said people would likely rather drive themselves than take group transportation due to virus fears. – July 6, 2021.