Saskatchewan sells STC assets for $29M, slightly more than appraised value
'Fair deal for the assets of appraised value,' says Joe Hargrave; province won't release payment breakdown
The Saskatchewan government says it estimates it will receive about $29 million for its Saskatchewan Transportation Company assets — slightly more than the appraised value of those assets.
"Obviously everybody would always like to get more, but a fair deal for the assets of appraised value, or market value, is what we consider fair," Joe Hargrave, the minister responsible for Crown corporations, said on Wednesday.
The appraised value of those assets was $25.7 million.
Hargrave had initially said earlier Wednesday that the government made $25 million by selling the assets and would be "just shy" of the appraised value.
Later in the day, the government clarified that it had in fact brought in $29 million from asset sales.
Hilco, an asset management company based in Ontario, bought all of the former Saskatchewan Transportation Company buses and trailers.
The fleet and equipment sale included:
- 45 coaches.
- a variety of trucks, vans and trailers.
- office furniture and equipment.
- IT hardware, including computers and printers.
- maintenance equipment, including tools, scales, and jacks.
- parts inventory, including windshield wipers, fuel filters and light bulbs.
They see that there's some value that they can retrieve from those assets that we are not realizing here in the province.- Carla Beck, NDP
The government wasn't in a position to sell one bus at a time, Hargrave said, before saying local businesses could have purchased a bus had they wanted to acquire one.
"Any operators in Saskatchewan that wanted to operate a bus service, this was a prime opportunity for them to buy it," he said.
"Had bids come in at a reasonable price on the units, we would have sold them at one bus here, one bus there."
Hargrave "strongly encouraged" people who bid less to approach the liquidation company and try to purchase it from them before the buses leave the province.
STC, a Crown corporation, was scrapped in the March 22 provincial budget, with the government pointing to its declining ridership and high costs — about $17 million a year.
Its buses stopped running at the end of May.
NDP calls for more scrutiny
Carla Beck, the NDP Opposition's critic for the government's Crown Investments Corporation, is concerned the province might not have received what the assets were worth.
She said the company that bought the buses is in the business of re-selling assets.
"They see that there's some value that they can retrieve from those assets that we are not realizing here in the province," Beck said.
"These were our assets. These belonged not to the government but to the people of Saskatchewan. We have a right to insist that we get full value," she said.
Beck said she wants more transparency, including a closer look at the sale of the assets and the winding down of the company as a whole.
"We have four depots that are being sold. One in Regina, of course, a prime downtown real estate location that cost over $20 million to build," Beck said, adding there were also several buses that never drove on the highway.
The province will not release the details of each individual sale, citing confidentiality clauses with businesses.
"I'm sure in due course it will be released but we can't release it today due to the contract obligations," Hargrave said.
The companies must release the information first, he said, adding "they may or may not."
Group calls for provincial audit
One group has called on the provincial auditor to investigate the financial implications of the STC closure.
The government says the closure will save the public $85 million over the next five years, but the group Save STC wants the provincial auditor to look into the validity of that assessment.
"We need an audit that would take into account all the direct and indirect costs, because this can get overlooked whether it's shipping freight or blood samples … or hospital patients," said Martin Wooldridge, a member of Save STC.
The group has sent two letters to government officials asking to halt the divestment of STC pending a review by the provincial auditor, and a letter to the auditor herself.
Wooldridge said auditor Judy Ferguson responded to his correspondence saying she hasn't been given enough information by government to conduct an audit.
He also said Minister Hargrave responded to his correspondence, but "it just kind of repeated the same statements like a sort of record that had got stuck in a groove, really."
"We're just not getting information. It's like getting blood out of a stone, really," said Wooldridge.
Wooldridge said the group just wants the facts to be made public.
- An earlier version of this story said, based on information from the Saskatchewan government, that the appraised value of the assets was $25.6 million. The government later clarified it was in fact $25.7 million.Dec 13, 2017 4:12 PM CT
- An earlier version of this story said, based on information from the Saskatchewan government, that the province would receive $25 million for the sale of STC assets, "just shy" of their appraised value. In fact, the government later clarified the province will get $29 million for the assets, slightly more than their appraised value.Dec 13, 2017 3:15 PM CT
With files from Joelle Seal