Public transport operators at a crossroads over new tariffs
Monday November 02 2020
Efforts to streamline mass transport service have hit fresh hurdles as investors in and Government are at crossroads over modalities of compensating for losses. PHOTO | Cyril Ndegeya
Efforts to streamline mass transport service have hit fresh hurdles as investors and the government are at crossroads over modalities of compensating for losses arising from new tariffs.
An earlier move to ease operators’ financial woes through increased tariffs at Rwf25.9 and Rwf28.9 a kilometer in Kigali and provinces respectively, hit a wall amid public outcry that prompted their suspension.
Despite the government offering to salvage the situation by putting in subsidy, operators indicate that it was still unclear what form it would be, timelines and modalities of its disbursement.
“The details are yet to be communicated to us, but there are agencies working on it,” said Innocent Twahirwa, managing director at Jali Transport Ltd which runs Rwanda Federation of Transport Cooperatives (RFTC).
Mr Twahirwa, however, confirmed that parties held negotiations over the issue.
Details by individual operators shared with the regulator for consideration show that meeting their contractual terms would call for a bailout from a combined loss of Rwf8 billions incurred over several months.
They indicate for instance, that the Rwf25.9 per kilometer city tariff decided by the regulator after series of negotiations held since late last year was way below their proposed rate of Rwf27.9 per kilometer based on accurate computation of what they incur in terms of operational costs.
The revised tariff had been in the pipeline awaiting publication by the time the coronavirus hit, then it was raised to Rwf31per kilometre against a Rwf52 per kilometer tariff computed by operators to compensate for reduced carrying capacity and social distancing rules.
“We accepted it because we were convinced that it was going to be a temporary situation. More than six months into the pandemic, we have been operating at 22 per cent loss.
That’s how we came to a combined loss of Rwf8 billion,” Nille Muneza, head of Royal Express, a Kigali City based transport firm told Rwanda Today.
Operators say despite the economy slowly returning to normal which allowed them to resume carrying 100 per cent fleet capacity, they were still operating at between 30 and 40 per cent due to reduced traffic.
The government responded to public outcry by slashing tariffs to pre-covid-19 rates of Rwf22 and Rwf21 per kilometer in Kigali and upcountry respectively, but the regulator hinted that the reduction was temporary and subject to change depending on the pace of economic recovery from the Covid-19 pandemic.