1. CREW Project Research Findings of Diagnostic Country Report (DCR), Ghana Bus Transport Sector By Paulina Agyekum Dec 2015

2. INTRODUCTION Road Transport handles 98% of freight and 95% of passenger traffic in Ghana Passenger Bus transport was regulated in 1969 under Omnibus Services Authority Decree (NLCD 337) It was deregulated in the eighties aimed for competitive purposes Currently, bus transport service about 95 percent private and 5 percent public for intercity and intra-city bus service CREW study reviewed impact of policy reforms in the industry on operators and users

3. POLICY ON MASS TRANSIT BUS TRANSPORT SERVICE OF NTP SECTION 4.2.4.3  Policy Rationale: To provide mass transit for 80% of passengers to conserve road space at affordable prices to the poor.  Current Scenario: Metro Mass Transit (MMT) was set in 2003 with 45% Government share and 55% private share. GoG subsidises the operation with bus recapitalisation and non payment of taxes It provides intra-city, intercity as well as rural urban transport Fares are regulated by GoG at 20% cheaper rate than private operation High occupancy rates offers environmentally friendly operation  There is about 90% passenger preference for its use  The service is considered to be much safer with 77% of passengers using it for safety purposes.

4. POLICY ON MASS TRANSIT BUS TRANSPORT SERVICE OF NTP SECTION 4.2.4.3  Despite the growth in fleet size, operational fleet has been under capacity ranging between 81.3 and 54.4% at an average of 63.9% per annum. The operation is not able to break even due to price regulation, poor maintenance and fare leakages. It does not offer any competitive advantage in terms of customer service It is is financially supported by GoG to stay afloat It has good competitive prospects due to the fact that 18 % of passengers use it despite the fact that it has only 5% market share.  Competition Concern: It does not offer any barriers to its private competitors due low operation threshold.  It should find a ‘niche’ market and deploy to fleet to strategic and poorly served areas to make effective impact Description 200620092012 Average fleet held58611031,049 Passenger carried (M)553038

5. POLICY REFORM ON RECAPITALISING INVESTMENT IN THE BUS OF NTP SECTION 4.2.4.1  95% of privately operated are second hand with only 4% in good condition  Policy Goal: To restock the bus market with new and high occupancy vehicles for good quality service in terms of safety, comfort reliability etc. through equity shares.  Current Scenario:  Various funding PPP arrangements were applied such as  Provision of Leasing Facilities  Provision of Access to Bank Loans  Establishment of PPP Arrangements  Only 6% of intracity bus operators and 7% intercity have benefitted from such schemes  Out of these 20% were arranged by Govt; 70% were arranged by private people and formal funding institutions whilst 10% arranged with private funding institutions  Loan schemes have stopped due to high default rate attributed to higher interest rates.

6. POLICY REFORM ON RECAPITALISING INVESTMENT IN THE BUS OF NTP SECTION 4.2.4.1 Only about 12 % have seating capacity of 60 and above 90% of operators think it is not easy to get funding support for new good quality high occupancy buses Acquisition of Govt supported loans takes about a year private arrangements takes longer with demands for expensive collaterals Govt regulation of fares; matched with expensive fuel prices and operational cost makes cost recovery difficult and debt servicing difficult. Govt is seeking to promote PPP arrangements where vehicles will be procured for private company operation with cost recover though a similar trial with transport unions failed in the past Competition Concern: Market is still dominated by 63% single bus ownership, 25% have two (2) vehicles and just about 12% more than two (2) vehicles There are proposal for tax incentives for bus importation and transport operation

7. POLICY ON ROUTE REGISTRATION FOR COMMERCIAL BUS TRANSIT SERVICE IN REGULATION 121  Routing for commercial bus operation is controlled by transport unions.  There is self regulation with no competition on quality of service.  Also lucrative routes have more regular service than non lucrative ones.  Policy Goal: Proposal was to issue route license by competition with Route Service Contracts (RSC) for better service.  Current Scenario:  So far, route rationalization has not been effectively implemented in Ghana  Most (55 %) ply on single route whilst 14% ply on double routes. The remaining ply between 3 to 6 different routes at different time schedules  Nearly 60% of the passengers have not seen any positive developments regarding availability of private buses in the last 5 years  Competition Concern: Policy Reform was never implemented  It is expected to be one of the priorities of the impending National Transport Authority (NTA) to be established by the MoT would be to integrate a route rationalization system in the licensing process

8. INTRODUCTION OF NEW REGULATIONS AND STANDARDS ON ROAD SAFETY IN THE SECTORS  Between 2008 and 2009, occupants of buses recorded the highest percentage increase in fatalities of almost two-thirds (65.2%).  Policy Goal: Development and Implementation of a multi component National Road Safety Strategies and action plans to reduce road traffic deaths in the country from an annual average of 1,600 to less than 1,000 and to achieve a single digit fatality rate by the year 2015  Current Scenario  Motor Vehicle Act was amended along with Road Traffic Rules and Regulations: Road Traffic Regulations LI 953 of 1974, Road Traffic Act 683 of 2004, and Road Traffic Act 761 of 2008 were formulated .

9. INTRODUCTION OF NEW REGULATIONS AND STANDARDS ON ROAD SAFETY IN THE SECTORS  48 % of the intra-city bus operators rated the ease of licensing as being fairly easy, 42% rated it to be difficult with about 10% not sure  100 % of bus operators and 36% of passengers said there has been changes in RTC due to new traffic safety regulations eg. checks on tyre condition, adherence to general vehicle standards, driver training in defensive driving, control of fatigue driving, alcohol checks, speed control etc.  Bus transport safety is still a challenge  Competition Concern: The reform initiative has not created the level of competitive efficiency of bus service safety as required

10. RECOMMENDATIONS MADE MMT should be sustained because it offers a wider scope of service in terms of route variation New and additional strategies to enable easier access to financial support eg. low-interest rate loans. Route allocation’ reforms with incentives for operators who operate in poorly serviced areas should be undertaken NTA should be established to ensure effective regulation and strict enforcement of ‘quality standards’ Civil society organisations for passenger welfare should be established

11. USE OF EVIDENCE IN GHANA ADVOCACY AGENDA CUTS Accra serves as a knowledge partner to the Ministry of Transport on public transport reforms issues to facilitate the establishment of Road Transport Authority (RTA) in Ghana. The Accra Centre is also examining the ‘political economy factors’ affecting the lack of implementation of the route rationalization policy in Ghana. Initiating evidence-based discourse on making fertiliser transport in Ghana pro-competitive (focus on port handling and clearance and internal transportation costs). A proposal has been established to facilitate the decentralization of road safety in Ghana has been submitted to the Global

12. CONCLUDING OBSERVATIONS  The proposed policy reform has impacted in different ways and no single measure has simultaneously delivered all of the expected objectives.  The scope for effective competition in terms of costs, market differentiation, and other business issues in the industry is not effective.  With the exception of unions competing with each other in order to protect their own territories"; and brief periods of intense rivalry between public and private bus operators competition has stagnated with each operator not facing any serious challenge from the other.  There is no incentive to increase services, improve service quality, create innovation and even lower fares to the disadvantage of passengers.  Correspondingly, there is further need for some adjustments of the current dispensation, to make the system work better