Transpoters now plead for bailout in fresh restrictions

Wednesday July 28 2021
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Transport operators in Rwanda are pleading for bailout as revenues losses from on-and-off movement restrictions and limitations on carrying capacity among other challenges. PHOTO | CYRIL NDEGEYA


Transport operators are pleading for bailout as revenues losses from on-and-off movement restrictions, limitations on carrying capacity, reduced operating hours and lockdowns continue to mount in the wake of successive virus waves.

Already, the disruptions linked to the first wave of the virus during April to August last year saw licensed public transport companies in Rwanda counting a combined revenue loss of over Rwf8 billion, which has since accumulated to a yet to be computed figure.

Despite government intervention to subsidise an inevitable tariff hike induced by limitations on carrying capacity, the sector contracted and had not seen itself out of the woods yet when a third virus wave saw the capital Kigali and key virus placed under yet another total lockdown effective July 17.

Equally, many operators indicate they could not tap into the multi-million dollar economic recovery fund instituted by the government to help businesses affected by the pandemic as most grappled with bad debts and operational challenges, hence failed to meet key eligibility criteria with regard to creditworthiness.

“The pandemic only exacerbated a pre-existing financial situation because we have since been operating at between 30 and 40 per cent due to restrictions meant to limit transmissions,” said Nille Muneza, Managing Director of Royal Express, one of the four licensed operators in Kigali.

“We are pleading with the government to devise ways to bail us out. Anything in the form of unconditional low cost loan or grant is all that can help players in this sector confront accumulating debts from service providers such as fuel suppliers, and the banks, among others,” he said. In December, utilities regulator resolved a dispute that threatened to paralyse the commuting service as the Rwanda Association of Petroleum Products Importers declined to lend more fuel to the transport firms over unpaid debtamounting to Rwf4 billion.