Organisation of transport services in Sub Saharan Africa:
Recommendations for reforms in Uganda
Mustapha Benmaamar
Transport Research Laboratory, UK
Objective of the project
To identify policy measures to
improve the organisation of transport services
improve the efficiency of vehicle operations
Uganda
Contents of presentation
Results of the survey of transport operations
Benefits of replacing used vehicles Vehicle finance Safety issues Benefits of reducing taxation Organisation of transport services Recommendations
UBOA bus park, Kampala
A Mini-bus in Bewenge
Kasaba transport, a successful business
UCTU workshop
Lorry park and Brokers office in Kampala
Main conclusions from surveys Surveys main conclusions
9 out of 10 imported vehicles are used vehicles (15 years average) and High vehicle operations costs
High queuing time (1 hour minibuses up to 3,5 days for trucks) and Low utilisation of vehicles (35,000km/year for mini-buses and 45,000km/year/truck)
Operators have a misperception of the life costs of operating used vehicles
High imports duty and petrol taxes, 30% higher than Kenya and Tanzania
Main conclusions from surveys
Limited access to vehicle financing, Only one leasing company, Only 500 commercial vehicles financed so far (30% guarantee+22% interest rate over 2 yrs period)
Low safety and security on the roads, one of the highest accident rate in Africa (160 fatalities per 10,000 veh)
High association and park loading fees and ‘’excessive competition’’, meaning oversupply of vehicles
Comparative vehicle operating costs, brand new v used mini-bus over 5 year period
100
200
300
400
500
600
700
800
900
1 2 3 4 5Year
VO
C i
n U
S$/
100
0 km
VOC-new
VOC-used
Whole-life costs for used and new vehicles
Benefits of replacing used minibuses
These savings do not include gains associated with reduced external costs (accidents, congestion, pollution) and savings related to increase in level of service and reliability.
Assumption: The overall serviceability of used vehicles decreases by 10% per year while labour and spare parts maintenance costs increase respectively by 15% and 20% per year
Each dollar invested in replacing minibuses will save around two dollars in VOC to transport operators.
Access to vehicle finance
Only possible for established transport companies
Promote the services of equipment leasing companies for financing commercial vehicles
Reduction of interest rate (50% to 20%) and extending period of repayment (5 to 7 years) could lead to significant VOC savings
Provide help to raise the required risk guarantee?
Safety issues One of the highest road accident rates in Africa
(116 fatalities per 10,000 vehicles costs between 2 to 3% of GDP)
Principal causes of accidents are poor driver behaviour, poor training, and poor vehicle condition
Drivers have no work contract and no fixed wage.
The use of the vehicle is contracted out to the driver at a fixed daily rate.
Drivers daily wage will be any additional amount generated on top of the fixed rate after deducting fuel cost, police fines and brokers and park loading fees.
Therefore drivers overload vehicles and speed ...
Benefits of reducing taxation
Reducing input taxes and interest rates and extending repayment periods of loans could lead to significant VOC savings.
However, this can only be effective in competitive markets where benefits of gains in productivity are transferred to transport user.
Is the transport market competitive?
Current organisation of transport services
Unregulated access to transport activity High or no age limit for vehicle imports Transport license awarded on simple
visual inspection of the vehicle and without reference to transport needs
No planning or regulatory framework Transport Authorities take few initiatives,
have limited budget and are under-staffed
Imbalance in allocation of resources between Roads and Planning
No planning of public transport network No enforcement of regulations
Current organisation of transport services continued
A monopolistic situation where the Transport Association (of service providers) is the sole service provider controls bus parks has, as its main objective, collecting money
through membership and park fees encourages new admissions
An over-supply of old and unreliable vehicles(13 years on average - expensive to run)
This leads to -
Vehicle performance
Long queuing time at bus parks Frequent breakdowns and low
availability High accident rates (one of the highest) High traffic congestion and pollution
Leads to Low vehicle utilisation and therefore High VOC High fares High external costs (congestion and
pollution)
Options for improving vehicle operations
Short term initiatives: Impose age limit on vehicle imports ?
Set up a support framework for vehicle
financing
Introduce a compulsory bus driving
license? Provide bus driver training schools
Introduce effective vehicle inspections? Provision of training and technical assistance
Options for improving vehicle operations
Allocate bus routes on the basis of transport needs Technical advise to the Ministry of Transport?
Enforce transport regulations effectively Set up an independent transport regulatory body?
Enhance competition Introduce new legislation to limit the size of
Associations?
Introduce more transparency Provision and Management of bus and truck parks
using PPP schemes?
based on policy reforms and new legislation:
THANK YOU
