Are Bus Owners Operating at Loss?

A recent hike in passenger tickets by transport operators in Kampala has been attributed to the high costs of operation, the COVID-19 loading restrictions and the soaring fuel prices.

The explanation follows a decision of the Uganda Bus Owners Association – UBOA to increase the fares along major routes effective December 2. This was on the basis of a resolution made in their meeting held on November 22.

Patrick Bongomin, the Manager of Makome Bus Services Ltd told URN that meant bus operators were not breaking even but rather incurring losses in the sector due to the stringent COVID-19 restrictions in which they are only allowed to carry half of their capacity.

“Our 67 capacity bus now carries only 33 passengers, each of whom pays 40,000 Shillings or less. With the soaring fuel prices, we spend at least 1.2 million Shillings on fuel to cover a distance of 666 kilometres,” Bongomin said. He added that buses are serviced before they embark on each trip and they also have to pay journey allowances for the driver, conductor, turn-man and loaders for each trip.

At Larem Bus Safaris, an employee who preferred to remain anonymous for fear of being reprimanded by the bosses said that a bus is averagely serviced at a fee of 500,000 Shillings before a trip, and drivers are paid at least 100,000 Shillings in allowance for each trip. The conductor is paid 80,000 Shillings and the turn-man gets 30,000  Shillings, which implies that they require 610,000 Shillings for overhead costs on each trip.

Based on the estimates, the source said that a bus, with four staff aboard operating at half capacity from Kampala to Gulu, Kampala to Soroti and Kampala to Mbarara can collect at least 1. 3 million Shillings for each trip.

Caroline Apalat, an official with Gogolon Transporters Ltd, says that they also charge 40,000 Shillings in transport fares from Kampala to Soroti, a distance of 324 kilometres, nine kilometres shy of the distance from Kampala to Gulu but end in negatives. "With such high costs of operation, you may not believe we that incur losses and sometimes, the company is forced to withdraw money from the savings to cover some of the expenses just to keep the business active.

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Meanwhile, Rose Najjuuko, the administrator of Buscar East Africa Ltd, a transboundary bus service that plies Kampala to Malindi via Nairobi and Mombasa, a distance of 925 kilometres (724) miles disclosed that loss is real in the transport sector.

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However, the announcement about the hiked transport fares was on Thursday halted by Gen. Edward Katumba Wamala. The Minister said Uganda Bus Owners Association should first write to the Ministry to justify their rationale for the proposed increment in the bus tariffs.

According to Gen. Katumba Wamala, they will have to sit in a meeting next week on Monday with the bus owners to find an agreeable position on whether to give them a green light to increase passenger fares or not. Meanwhile, the bus operators warned of further hikes in the transport fares as the festive period draws closer, adding that that the influx of travellers around the festive will make high charges enviable.

In October, Uganda recorded unprecedented fuel price increment, due to a combination of factors ranging from the global impact of Covid-19 on the supply chain, the resurgence of the global demand and new tax regimes in East Africa.

Later in November, the government, through the Ministry of Energy, advised Ugandans to brace further spike in fuel prices in a liberalized market. The pump price for petrol currently stands between 4,020 to 4,700 shillings from the previous 4,190 per litre range.