RWANDA: A SMALL NEIGHBOUR WITH A TRANSPORT POLICY. Baker Mayambala. Tue, Jun 18th, 2013 Rwanda Govt to spend Rwf 5b to revamp Onatracom The Government is likely to spend Rwf5.5 billion to replenish debts that the struggling national public transport agency, Onatracom, owes to different creditors and launch the body’s new model of operation that will put its management under private operators. Some of the Onatracom buses in a state of disrepair in the agency’s garage. The New Times/ Timothy Kisambira. The new plans were revealed by the Principal Senior Engineer for Transport at the Ministry of Infrastructure (Minifra), Eng. Peterson Mutabazi, during an exclusive interview with The New Times. Mutabazi revealed that a roadmap to revamp Onatracom which was approved by last week will see the government pay the agency’s debt of Rwf3.5 billion while an additional Rwf2 billion will be invested in the company as part of a plan to revamp its operations. Private operators The engineer said the entire plan to make the agency self-sustaining will include the recruitment of private operators to manage its services and make it profitable enough to be self-sustaining within the next three years. “Things are going to be implemented in a much more competitive way. There will be no more losses,” Mutabazi said. He said after three years, government hopes to turn Onatracom into a public limited company with private investors fully or partly owning shares in it. The State-owned public transporter, which was set up in the 1970s to provide and promote public transport in the country’s most isolated regions, has been constantly reporting losses and requesting more money from the government. The government has constantly decried the poor management that characterised the agency. While the agency is not expected to make profits because it operates under the social aspect principle to support the public, government has at least kept faith that it would make enough money to sustain itself. Mutabazi said the money made by the agency is either mismanaged or embezzled, leaving government with no option but to invest Rwf2 billion every five years to keep it afloat. “It means that the replacement capital was never accumulated. Along the way, there was abuse in Onatracom management,” he said. The agency, which used to operate more than 100 routes with more than 100 buses, is currently serving 37 routes with a fleet of less than 40 buses as the bulk of the vehicles are either grounded or are damaged beyond repair. Private operators to be hired Mutabazi said Cabinet decided that government should hire private operators to manage Onatracom to ensure that it operates in a more accountable way and drive its revenues towards sustainability. The engineer said Mininfra is working on a modality to hire a private person or company to take over the agency. “The approval of the proposal is timely. Rural transport has a great potential for the country’s economy,” he said as he explained the benefits in revamping the public transport agency. He said if government invests some Rwf2 billion in the agency in the next fiscal year to hire private managers and buy new buses, among other things, the number of routes served would move from 37 to 80 and passengers are likely to be served at stable schedules. A welcome move The plan to put the agency’s management under private hands was welcomed by MP Evode Kalima, the deputy chairperson of the Parliamentary Committee on Public Accounts, which had once decried mismanagement of funds at the agency. “It is one of the answers we have for Onatracom. The government needs to employ people with expertise and make sure that they will benefit while also serving the government’s interest,” he said. Mininfra estimates that Onatracom loses Rwf500,000 and a 15 per cent depreciation of assets every month, leaving government with the only option of investing more money to keep its buses on the road. By Eugene Kwibuka, The New Times
Posted on: Tue, 18 Jun 2013 10:39:48 +0000
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