1. Organisation of transport services in Sub Saharan Africa: Recommendations for reforms in Uganda Mustapha Benmaamar Transport Research Laboratory, UK

2. Background To provide road transport for people and goods requires 1Roads 2Someone to provide vehicle services

3. COMPARISON OF TARIFFS Cameroon Zambia Mali Ivory Coast India Pakistan 0 2 4 6 8 10 12 US cents / ton km

4. COMPARISON OF TARIFFS Cameroon Zambia Mali Ivory Coast India Pakistan 0 2 4 6 8 10 12 US cents / ton km

5. A 10% saving in transport costs in Sub Saharan Africa would save US$2 billion per annum = Cost of the current backlog in routine and periodic maintenance

6. Uganda

7. Objective of the project To identify policy measures to n improve the organisation of transport services n improve the efficiency of vehicle operations

8. Uganda

9. Contents of presentation n Results of the survey of transport operations n Benefits of replacing used vehicles n Vehicle finance n Safety issues n Benefits of reducing taxation n Organisation of transport services n Recommendations

10. Bus survey results

11. Trucks survey results

12. UBOA bus park, Kampala

13. A Mini-bus in Bewenge

14. Kasaba transport, a successful business

15. UCTU workshop

16. Lorry park and Brokers office in Kampala

17. Main conclusions from surveys Surveys main conclusions n 9 out of 10 imported vehicles are used vehicles (15 years average) and High vehicle operations costs n 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) n Operators have a misperception of the life costs of operating used vehicles n High imports duty and petrol taxes, 30% higher than Kenya and Tanzania

18. Main conclusions from surveys n 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) n 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

19. Comparative vehicle operating costs, brand new v used mini-bus over 5 year period 100 200 300 400 500 600 700 800 900 12345 Year VOC in US$/1000 km VOC-new VOC-used Whole-life costs for used and new vehicles

20. 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.

21. Access to vehicle finance n Only possible for established transport companies n Promote the services of equipment leasing companies for financing commercial vehicles n Reduction of interest rate (50% to 20%) and extending period of repayment (5 to 7 years) could lead to significant VOC savings n Provide help to raise the required risk guarantee?

22. Safety issues n One of the highest road accident rates in Africa (116 fatalities per 10,000 vehicles costs between 2 to 3% of GDP) n Principal causes of accidents are poor driver behaviour, poor training, and poor vehicle condition n Drivers have no work contract and no fixed wage. u The use of the vehicle is contracted out to the driver at a fixed daily rate. u 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...

23. Benefits of reducing taxation n Reducing input taxes and interest rates and extending repayment periods of loans could lead to significant VOC savings. n 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?

24. Current organisation of transport services n Unregulated access to transport activity u High or no age limit for vehicle imports u Transport license awarded on simple visual inspection of the vehicle and without reference to transport needs n No planning or regulatory framework u Transport Authorities take few initiatives, have limited budget and are under-staffed u Imbalance in allocation of resources between Roads and Planning u No planning of public transport network u No enforcement of regulations

25. Current organisation of transport services continued n A monopolistic situation where the Transport Association (of service providers) u is the sole service provider u controls bus parks u has, as its main objective, collecting money through membership and park fees u encourages new admissions n An over-supply of old and unreliable vehicles (13 years on average - expensive to run) This leads to -

26. Vehicle performance n Long queuing time at bus parks n Frequent breakdowns and low availability n High accident rates (one of the highest) n High traffic congestion and pollution Leads to n Low vehicle utilisation and therefore n High VOC n High fares n High external costs (congestion and pollution)

27. Options for improving vehicle operations Short term initiatives : n Impose age limit on vehicle imports ? u Set up a support framework for vehicle financing n Introduce a compulsory bus driving license? u Provide bus driver training schools n Introduce effective vehicle inspections ? u Provision of training and technical assistance

28. Options for improving vehicle operations n Allocate bus routes on the basis of transport needs u Technical advise to the Ministry of Transport? n Enforce transport regulations effectively u Set up an independent transport regulatory body? n Enhance competition u Introduce new legislation to limit the size of Associations? n Introduce more transparency u Provision and Management of bus and truck parks using PPP schemes? based on policy reforms and new legislation:

29. THANK YOU