Pioneer Easy bus (PEB) recently weighed the prospect of ending its operations in the capital, Kampala, citing Kampala Capital City Authority's (KCCA) failure to stick to the concession requirements.
Now Parliament has ordered for a review of the concession agreement between PEB and KCCA. Last year, district leaders from Mpigi, Mukono and Wakiso petitioned the parliamentary Local government's committee arguing that PEB was only paying KCCA for their part of the concession and not the other districts. Although the report mentions Mpigi as one of the districts in the concession, PEB has never operated in that district.
Under the concession, PEB was supposed to provide bus transport services to all four districts at an affordable and sustainable fare, under the Metropolitan Physical Planning Authority. In exchange, the districts were supposed to offer special lanes, in which the buses would operate exclusively. The concession is silent on how much PEB was required to pay as licence fees to the four districts, although KCCA later demanded for Shs 300,000 per month per bus.
However, before the terms of the concession could be implemented, KCCA, through an executive order from the president, allowed PEB to begin operations following a strike by taxi operators. The report recommends that the executive order should be revoked by January 15, 2013 and a new concession renegotiated.
"The contract should be negotiated, taking into account operational losses incurred by the Local Government and PEB, expectations and interests of the stakeholders and the short and long-term plans and policies of the government," the committee report reads.
The commitee report reveals that, "KCCA does not have the mandate to enter into contracts binding neighbouring local governments without their involvement and approval."
PEB is yet to pay for the 100 buses operating in Kampala, arguing that KCCA has not met its part of the concession either. Consequently, the committee recommended that the concession should be reviewed and a new agreement entered involving the Central Government, KCCA and the local governments of Wakiso, Mpigi and Mukono Municipal council. According to the Local Government Act, 1997, every district and urban council can independently plan for services in its area of jurisdiction.
The committee also recommends that a new concession should be between 25-30 years and not five years as stated in the current agreement.
"A concession is typically for 25-30 years period. The duration of the contract should be long enough to enable the private company to at least amortize its initial investment costs," the committee report notes.
According to the report, Matthew Rukikaire, is the biggest shareholder in PEB with a 41% stake. Other shareholders include; Fred Senoga, Executive Director (PEB), Mark Gabuza, David Baingana, John Nsamba, Suleiman Nsubuga, Fred Golola, John Kirangwa, John Tinkasimire, Albert Muganga, Moses Kiiza, John Masanda, Nicholas Opio, Nicholas Ocimu and James Yefeo.