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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
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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
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
Main conclusions from surveys Surveysmain 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
Whole-life costs for used and new vehicles Comparative vehicle operating costs, brand new v used mini-bus over 5 year period 900 VOC-used 800 700 VOC-new 600 VOC in US$/1000 km 500 400 300 200 100 1 2 3 4 5 Year
Benefits of replacing used minibuses Each dollar invested in replacing minibuses will save around two dollars in VOC to transport operators. 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
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 This leads to - • 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)
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 based on policy reforms and new legislation: • 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?
