Rwandan Government introduces 29.3bn Rwandan Franc subsidy to ease the burden on hard pressed public transport service providers
The New Times in Rwanda on 11 February 2021 leads with the good news that the Rwandan government has allocated a subsidy of 29.3 bn Rwandan Franc (RWF) in the 2021 financial year as a relief payment to hard pressed public transport operators. Under the now extended COVID–19 regulations, Rwandan public transport operators are required to reduce their load factor to 50% of carrying capacity.
Over the period 2018 – 2020 three South African companies ODA, TESS and Go Metro, joined Swiss Transport and Traffic Engineers Transitec in developing the 2nd generation public transport service contracts for the city of Kigali.
According to ODA Managing Director Nico McLachlan, the action by the Rwandan government is laudable and clearly based on a sound understanding of the cost structure of public transport operations as well as the fare revenue yield and fare system elasticity.
The professionalisation of the governance and management of public transport services in Kigali started in 2013 with the introduction of a zonal regulatory system formalising the operating rights the (at the time) three main paratransit groupings into their de facto areas of operation. This step was complemented by a policy decision that operators needed to meet certain targets regarding the shift to higher occupancy vehicles and the introduction of a cashless fare system that today is universally applied by the three operating companies in Kigali.
The work done by the Rwandan Utilities Regulatory Authority (RURA), the Ministry of Infrastructure (MINIFRA), the City of Kigali (CoK) and the Rwandan Transport Development Agency (RTDA) in conjunction with the Transitec /ODA consortium, in preparing for scheduled services contracts further enhanced the authorities’ understanding of the cost structure and fare revenue capacity of the Kigali public transport system.
What we are seeing in Rwanda is the ability of a government that has invested in the systematic improvement of the governance and management of its public transport system to act in a well–informed manner as it sets out to mitigate the prolonged impact of COVID–19 measures on the viability and sustainability of its public transport sector. The lessons to be learnt are invaluable.
Nico McLachlan, Director ODA
