Rwanda Utilities Regulatory Authority (RURA) has been urged to negotiate subsidies for public transport companies so they can stay in business without hiking bus fares.
RURA announced new public transport tariffs on Thursday, October 15, which are higher than those of the pre-Covid-19 period.
The new prices irked the public who took to the popular social media platform, Twitter, to share their frustration.
This then prompted the Prime Minister to intervene, promising to look into the matter.
“We have taken note of the concerns of citizens regarding transport tariffs and the Prime Minister together with relevant stakeholders will address the issue as soon as possible,” the Prime Minister Office said in a tweet.
We have taken note of the concerns of citizens regarding transport tariffs and the Prime Minister together with relevant stakeholders will address the issue as soon as possible.— Office of the PM | Rwanda (@PrimatureRwanda) October 20, 2020
In May this year, after the Covid-19 lockdown was partially lifted, RURA increased fares within the Kigali city from Rwf22 per kilometre to Rwf31.8 per kilometre; and for the rest of the provinces from Rwf21 per kilometre to Rwf30.8 per kilometre.
The justification for the increase was that the buses were operating at half-capacity due to covid-19 restrictions and in the event that the companies maintained pre-covid prices, they would run out of business or not be able to offer transport services as expected.
Last week, the government lifted restrictions on public transportation, allowing buses to increase their capacity. All seats can be occupied and for those standing, at 50 per cent capacity. This new directive was a result of the drop in covid-19 cases.
Following this, RURA announced revised public transport tariffs where fares within Kigali reduced from Rwf31.8 to Rwf28.9 per kilometre for each passenger.
Inter-city transport fares were also reduced from Rwf30.8 to Rwf25.9 per kilometre for each passenger.
This means that passengers will have to incur approximately Rwf6.9 extra per kilometre they travel within Kigali (compared to before Covid-19) and Rwf4.9 per kilometre for upcountry travel.
RURA’s explanation for the new fares is that they are in-line with a routine tariff review that the regulator carries out after every two years.
In reaction, some members of the public urged RURA to suspend the implementation of new tariffs since people are still grappling with the economic effects of Covid-19.
However, RURA officials argued the scheduled price increase was to ensure the privately-owned public transporters stay in business, considering that during the pandemic the transporters were operating at losses.
To solve the impasse, one of the recommendations is for the government to chip in.
According to one economic analyst, government can allocate an amount of money to the operators as a subsidy or recovery fund so that they can continue to provide services to citizens at affordable prices.
Canisius Bihira, an economist argues that the same way funds have been availed to the hospitality sector, a special fund should be availed to public transport operators.
“This subsidy can last for some time, say several months or even a year, as citizens recover financially,” Bihira said.
For Marie-Immaculée Ingabire, an anti-corruption advocate and the country chair for Transparency International, the timing for the price increase was wrong.
“The majority of the population especially in urban settings are facing economic hardships. And, schools are going to start, and we know their cost [school fees] also. So, this is a bad time to increase the price of transport,” Ingabire said.
Marie Jose Mukanyamwasa, the managing director of Kigali Bus Service (KBS), explained that the new prices were reached after extensive consultations with stakeholders.
“When we say the price is too high for the consumers, transporters can also really say it is too low for transporters. We [transport companies] don't push for exorbitant prices that are beyond the citizens' affordability. If we did so, we know we would not get clients,” Mukanyamwasa said.
She further explained the cost drivers for public transport, arguing that with insurance prices going up six-fold, and the maintenance fees for the busses increasing due to high repair costs, they are left with little options than transferring the costs to their clients.
Regarding support from the government, Mukanyamwasa said, it would be welcome if it was a subsidy and not in form of credit.
“A loan is not good for us because we already have loans. In fact. some cars that we are using are from loans. We don't want to pile loans upon loans,” she added.
While appearing on a show aired by public broadcaster — Rwanda Broadcasting Agency, Patrick Nyirishema, the Director-General of RURA said they are going to continue engaging the relevant institutions to look into the issue.
“We continue to discuss with the relevant institutions to look for an alternative way to assist the citizens so that they will not be overburdened, but today I won’t say that we are going to review these prices because we come up with them after a thorough examination,” he said.