What does the new bus contracting model entail?

The government has signed agreements with various private operators on performance-based contracts to deliver public transport services using buses owned by Ecofleet Solutions, the newly created state-owned company. According to the Ministry of Infrastructure, the new bus contracting model is a new way of engaging public transport operators. It is performance-based, and is built on service-level agreements. ALSO READ: How Kigali's new public transport model will work The role of Ecofleet Solutions is to acquire and own assets in different ways, officials said. The state-owned company can design and optimise routes, and then award contracts to public transport operators based on service levels and key performance indicators (KPIs). All companies involved including bus operators, fuel providers, maintenance providers, and others were selected through competitive tenders. “There were separate tenders for bus leasing, bus operations, fuel supply, fleet maintenance, and cleaning. Each category has its own competitive process,” Jean de Dieu Uwihanganye, the State Minister in charge of Infrastructure at the Ministry of Infrastructure, told The New Times in an interview. He said that out of eight companies that participated in the bidding process, four were selected for bus operations. Those providing buses also bid, and three companies were selected for bus leasing, with the minister explaining that all were assessed based on their ability to provide services under a KPI-based system. ALSO READ: Kigali City names three roads to be dedicated to public buses The buses will have to run on fixed and predictable timetables. Previously, operators waited for buses to fill before departing, in an effort to maximise revenue. With the new model, buses will not wait until they are full, as Ecofleet Solutions will compensate operators within the ecosystem. “Now, even if only 10 passengers board, the bus must depart according to schedule. The bus cannot remain in a bus park for more than 10 minutes without departing, and no longer than three minutes at bus stops,” Uwihanganye explained. “Faster movement increases productivity, which contributes to GDP growth and government revenue. Covering the deficit is therefore considered an investment, not a loss,” he added. ALSO READ: Kigali City names three roads to be dedicated to public buses Private operators will be paid based on outcomes in terms of service delivery, as per the agreements. However, he did not provide details about the investment in the new public transport model or how much private operators might be paid. “The details of individual contracts remain confidential, but the key principle is performance-based payment,” he noted. Key performance indicators He said there are about 10 Key Performance Indicators (KPIs) used to assess operator performance. “Some examples are that a bus cannot spend more than 10 minutes in the terminal, nor be delayed by more than three minutes at a bus stop. Buses must meet cleanliness standards,” he noted. “Drivers must treat passengers well, as reflected in user feedback. Fare evasion management is also included, since the government now assumes most of the financial risk. Payment to operators depends on meeting these requirements,” he added. ALSO READ: Transporters push for dedicated lanes for public buses According to the minister, if an operator meets the KPIs, they receive full payment. If not, penalties apply for each unmet KPI, and accumulated penalties can lead to removal from service and replacement by another operator. “Conversely, strong performance can earn bonuses. The system incentivises operators to deliver high-quality service because that is how they make a profit,” he said. Every contract is offered through a competitive bidding process. “Some operators provide drivers and manage them. Others lease buses to the government, others handle fleet maintenance, and others provide fuel. All operate under performance-based, KPI-linked contracts. This is the core of the new bus contracting model,” he said. “The government’s goal is to improve service levels for commuters in urban areas. By placing itself at the centre—managing risk and tying operator profitability to performance—the government ensures better service delivery,” he added.. There was a separate tender process for maintenance providers. “For example, Yutong, being the manufacturer of most buses, was selected to provide performance-based maintenance services. Other companies also competed,” he noted, emphasising that Ecofleet Solutions can retain or remove service providers based on performance. Fleet management The state-owned company owns some buses and leases others. Ecofleet Solutions will start with 190 buses, plus another 110 it has leased from different private operators. According to the minister, decisions on which buses to lease are made through competitive tenders. Ecofleet Solutions designs routes, evaluates the number and condition of buses needed, and tenders accordingly. “Buses are selected not just on availability but also on age, condition, performance capacity, and ability to undergo major repairs all of which are part of the KPIs,” he said. ALSO READ: CoK mulls new transport system to ease traffic congestion Some private operators who previously provided public transport services have expressed concerns, particularly regarding the leasing of buses to the government. Charles Ngarambe, Chief Executive of Kigali Bus Services (KBS), said only 30 per cent of KBS’s fleet of 76 buses was leased to Ecofleet Solutions. “These buses had bank loans and staff attached to them. We are working with the government to see how these challenges can be addressed,” he said. Nilla Munezero, Chief Executive of Royal Express, said the company saw 22 of its buses selected to operate under the leasing model which is around 30 percent of its fleet. “Royal Express, like other operators, has bank loans tied to buses that were not selected under the new system,” he said. He noted that the company is waiting for a clear solution regarding the fate of the affected vehicles. Cashless payments For now, the Minister said, the system will continue using the existing ACP Group solution. “However, the government’s goal is a seamless cashless system where passengers can use any card or payment method. This requires complex technology integration, currently being developed and tested under the Ministry of ICT. It will take time, but that is the direction,” he said.

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What does the new bus contracting model entail?