5 January 2014

Rwanda: Cash-Strapped Firms Fail to Deliver New City Buses

City commuters will have to bear with delays and rides on old buses for some time after companies contracted to operate public transport failed to beat the December 31 deadline to reinforce their fleets with new buses.

Apart from five 30-seater buses parked at MAGERWA customs yard, the three transport companies that were contracted in August last year to operate public transport in Kigali have failed to ship in 200 buses required to provide adequate services to city commuters

The companies cite delays in obtaining loans they applied for from banks as reason for failure to meet their obligations.

Charles Ngarambe, the Executive Chairman of Kigali Bus Services (KBS) told The Sunday Times yesterday that the loan application his company had placed did not materialise as expected, because in the first place, the transport business was not going all well. "Banks told us to give them more time," Ngarambe said.

"We have already twenty buses with a sitting capacity of 80 in Dar-es-Salam Port. We are going to clear them on January 10 and they will arrive in Kigali in 14 days."

Another company which might not add a single new bus soon is the Rwanda Federation of Transport Cooperatives (RFTC).

Dodo Twahirwa, the company boss said: "We faced financial constraints; the loan we had applied for came in late, and the order made with Akagera Motors could not be forwarded to the factory in Japan. Now that it is settled, we are processing it."

Dodo said they have ordered for 200 buses, but the first lot to be financed by Rwanda Development Bank is made up of 60 30-seater mini buses, each costs Rwf 52 million.

"As of now, we cannot tell exactly how many vehicles we shall get and when. It will depend on the demand at the factory," he said.

According to Jean Claude Rurangwa, in charge of Transport in City of Kigali, the only company that managed to meet its side of the bargain was Royal Express. The company imported five buses now parked at MAGERWA. The company is expecting five more this month.

For the third time, the City of Kigali has given the three companies two more weeks to bring in more buses, as stipulated in the contract.

Companies deserve fines

Delays on a bus stop, conductors and drivers who handle the passengers unfairly, and some other mistakes that were identified by Rurangwa's inspection still persist despite reminders to the three operators to address them.

"The number of passengers keeps increasing but buses are not. Yet, it seems companies do not have qualified staff to handle the clients as we agreed, using the few buses they still have. The bus crew need training and a committee is planning this for us," he said.

About 40 buses were penalized according to the contract, but the inspection team decided not to enforce the fines, saying they were giving them a chance to reform.

"We do not want to discourage them now, we are still looking into how we can first teach them deliver good service; fines might come later," Rurangwa said.

According to the terms of the contract, a company's mistake is punished with a loss of 10-20 points, if one accumulates 100, is fined Rwf 1 million.

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