(Yicai Global) Feb. 23 -- The Shangqiu municipal government has intervened to keep bus services in the city in central Henan province running smoothly after the public transportation operator said it will be suspending all urban bus services from March 1 due to severe financial difficulties.

Shangqiu Municipal Public Transportation, which operates bus services in downtown Shangqiu, will continue normal services and public transportation will not be affected, the firm said today, retracting its previous statement.

The announcement comes after the municipal government said that a special team has been tasked with helping the company overcome the crisis and ensure the normal operation of city buses.

Shangqiu Public Transportation has been badly affected by the fallout from the pandemic, the end of government subsidies for new energy vehicles as well as a lack of financial assistance and is running at a loss, it said earlier in the day. The firm is unable to pay wages and social security payments, can no longer afford to charge its electric vehicles and is unable to buy insurance for its autos.

Shangqiu Public Transportation, which was set up in 1958, employed more than 4,000 employees as of 2018, and had a fleet of 2,578 vehicles, 2016 units of which were electric buses. Each year, the company’s services cover a mileage of 81 million kilometers and transport 83 million people.

Editors: Shi Yi, Kim Taylor