Taurai Changwa Business Forum
AT face value, the liberalisation of the transport sector in 1993 was largely considered to be a stroke of economic genius. Apart from lessening the burden to central Government, which by then was laden by huge subsidies, it was supposed to empower a new class of budding entrepreneurs.
However, the growth of private transport meant that the influence and dominance of State-owned enterprise, Zupco (Zimbabwe United Passenger Company), naturally waned.
Sanity was traded for insanity. Over the years, Government has struggled to collect any meaningful revenues from the private sector and, more often than not, commuter omnibuses — which have become the face of the private transport sector — have brought disorder in the administration of local authorities.
In view of the foregoing, it is now time of take stock of what benefits are accruing to Government, whether local Government or central Government, from the liberalisation of the sector.
It is also important, too, to research whether centralising and reclaiming the public transport system will not beneficial to the State.
Quite clearly, the transport sector is a money-spinning million-dollar business. Suffice to say, it is time Government considers a huge investment in the transport sector if significant headway is to be made in not only bringing sanity to the sector, but rehabilitating the public transport infrastructure, which is undoubtedly in decay.
Internationally, there are countless examples to prove how this can be successful. In Dubai, for instance, the local public transport is operated by the Roads & Transport Authority and consists of the Dubai metro, buses, water buses and abras (water taxis).
Before you can board a local bus or the metro in the emirate, you must purchase a rechargeable Nol Card (nol is Arabic for fare), which is usually available from ticket offices in any metro and some bus stations. There are also ticket vending machines (with English instructions) in all metro and bus stations, at some bus stops and other places such as malls and the airport.
There are four categories of Nol Card: For those using public transport a few times, a Red Card, which costs Dh2 and may be recharged for up to 10 journeys, is recommended. The fares depend on distance and are divided into five zones. And children under five years of age travel free.
So successful has been Dubai’s various transport ventures that it is realising over US$1 billion of sales per annum from the sector. But the responsibility of providing public transport carries with it the onus to spruce up and renovate the enabling infrastructure, which, at the moment, is not the case.
For Zimbabwe, similar ventures can be equally successful.
With more than two million urban people of the country’s 13 million population using public transport, monetising their movement is very possible.
The potential to generate significant revenues is not in doubt. In addition, it becomes possible for Government to realise revenues that are ordinarily leaking from the system through non-compliant private transporters. Investing in a state-of-the-art transport system will most likely enhance the country’s image.
In any case, there is every motivation to make such an investment since the geographic location of Zimbabwe — as a country that is central to the region and a gateway from Africa’s biggest economy (SA) into the region — can essentially make it a transport hub.
However, proposing that Government services long-term routes is a long shot. What might be convenient is to concentrate on the metropolis. Metro trains and metro buses, just in the same way as they have been done in Ethiopia and Tanzania, have to be seriously considered.
Some independent experts say about US$7 billion over the next five years might be needed for the project. The investment might however be considerably less. For example, the construction of the Dubai Metro project was US$7,8 billion. But there are rich pickings as well.
Authorities forecast US$4,9 billion in income could be generated over the next 10 years. Without only considering profits, such infrastructure can be very beneficial: the metro rail system has proven to be most efficient in terms of energy consumption, space occupancy and numbers transported.
Arguably the greatest benefit lies in the fact that all the monies circulating in the public transport sector can be monitored and accounted for.
A build, operate, own, transfer (Boot) model can work well in the case of Zimbabwe. They are suitors that stand ready to invest in these projects provided that the environment allows and the investment can be recouped.
- Taurai Changwa is a member of the Institute of Chartered Accountants of Zimbabwe and an Estate Administrator. He has vast experience on tax, accounting, audit and corporate governance issues. He is the managing director of Umar & Tach Advisory. He writes in his personal capacity and can be contacted at [email protected] or whatsapp on 0772374784.
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