Rwanda: PM to Intervene in Transport Fare Hike After Public Appeal

20 October 2020

Rwanda Utilities Regulatory Agency (RURA) has been advised to consider subsidizing public transport companies to help them recover from adverse financial effects of Covid-19 without having to raise the fares at such a time when citizens are still struggling economically.

The agency has become the subject of public scrutiny after it announced new public transport tariffs on Thursday October 15, which are higher than those of pre-Covid-19 period.

This has prompted the Prime Minister to intervene.

"We have taken note of the concerns of citizens regarding transport tariffs and the Prime Minister together with relevant stakeholders will address the issue as soon as possible," the Prime Minister Office said in a tweet.

We have taken note of the concerns of citizens regarding transport tariffs and the Prime Minister together with relevant stakeholders will address the issue as soon as possible.

- Office of the PM | Rwanda (@PrimatureRwanda) October 20, 2020

Due to Covid-19 preventive measures, in May this year, when the lockdown had been partially lifted, RURA increased fares within the Kigali city from Rwf22 per kilometre to Rwf31.8 per kilometre; and for the rest of the provinces from Rwf21 per kilometre to Rwf30.8 per kilometre.

The move was mainly meant to enable operators to sustain the service while observing social distancing guidelines. At that time, buses were only allowed to operate at half their capacity.

Last week, government lifted restrictions on public transportation, allowing buses to fill all their seats and at least 50 per cent of the standing passengers.

Following this, RURA announced new public transport tariffs where journey fares within Kigali reduced from Rwf31.8 to Rwf28.9 per kilometre for each passenger.

Inter-city transport fares were also reduced from Rwf30.8 to Rwf25.9 per kilometre for each passenger.

This means that passengers will have to incur approximately Rwf6.9 extra on every kilometre they travel within Kigali (compared to before Covid-19) and Rwf4.9 on each kilometre for upcountry travel.

RURA's explanation for the new fares is that they are in-line with a routine tariff review that the regulator carries out after every two years.

So, they were not introduced for the short run.

In reaction, some members of the public said that RURA should delay the implementation of new tariffs since people are still grappling with the economic effects of Covid-19.

However, RURA officials also continued to make a case about the welfare of public transport operators.

According to RURA, operators had been working in losses during in the aftermath of the lockdown.

Now, according to an economic analyst, there can be a better solution for the situation.

Here, government can allocate an amount of money to the operators as a subsidy or recovery fund so that they can continue to provide services to citizens at relatively lower prices.

Dr. Canisius Bihira, an economic analyst, just like funds have been availed to the hospitality sector, a special fund should be availed to public transport operators.

"This subsidy can last for some time, say several months or even a year, as citizens recover financially," he said.

Commenting on RURA's new prices, Marie-Immaculee Ingabire the Chairperson of Transparency International also commented on the prices in an interview with The New Times, saying this is a bad time to increase the prices.

"The majority of the population especially in town are really living in hard times. And schools are going to start, and we know their cost also. So this is a bad time to increase the price of transport," she said.

Marie Jose Mukanyamwasa, the managing director of Kigali Bus Service (KBS), said that RURA's new prices are based on consultations with operators.

"When we say the price is too high for the consumers, transporters can also really say it is too low for transporters. But we don't want high prices that are over the ability of the citizens because we also won't get clients."

Mukanyamwasa argued that insurance prices have increased almost six fold.

This, she added, is in addition to issues like increased prices of spare parts for the vehicles.

"Talking about support from government to operators, it's only good if it is a subsidy. A loan is not good for us because we already have loans. In fact some cars that we are using are from loans. We don't want to pile loans upon loans."

Meanwhile, in one interview with the public broadcaster-Rwanda Broadcasting Agency-, Patrick Nyirishema the Director General of RURA said that though they are not promising price changes for now, they are going to continue engaging the relevant institutions to look into the issue.

"I think we can continue to discuss with relevant institutions to look for an alternative way that is to assist the citizen so that they will not be overburdened, but today I won't say that we are going to review these prices because we come up with them when we have examined and studied them well," he said.

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