We have done well with regulation of PSVs, time to fix roads, fares too

Coast Bus Managing Director Ajaz Mirza

Since privatisation a few years after independence, the passenger transport business in Kenya has undergone tremendous transformation.

The decree by founding President Jomo Kenyatta that allowed private individuals invest in public service vehicles (PSVs), gave birth to a robust industry that would later evolve into a major employer and source of livelihood for many Kenyans.

Of course, this growth was not always orderly. At some point, the Kenyan passenger transport business had all but degenerated into a jungle: an anything-goes, lawless, monster that could no longer be controlled by government. Informal groups, some with criminal bent, would later move in to fill this lacuna, with disastrous consequences for passengers and well-meaning investors seeking a fair avenue to profit. We had plumbed to low depths.

The history of the PSV business in Kenya in the last decade has, in many ways been a story of the Government seeking to reclaim lost ground: moving to stamp its authority, control and oversight on a sector that had nearly gone rogue. It started with the infamous Michuki Rules introduced by late indefatigable Transport Minister John Michuki during the sunrise of a then popular Narc Government. This overall theme of a pushback by Government has continued, and has seen the introduction and overt projection of the National Transport Safety Authority (NTSA) as the industry regulator.

For some of us who invested in and have always ran a timetabled, formal service since inception, with our chosen path being a luxury bus service on the Mombasa-Nairobi route, heightened regulation is something we believe has helped the industry a great deal. For starters, it has helped level the playing field for investors in the sector.

Regulation has also made the industry more predictable. Naturally, it is easy to invest in a business when you know what to expect. This helps in forward planning, which is integral to the operation of a profitable business. This is a far cry from what used to obtain at some point in the past when rules could change overnight, just at the whim of individuals at the apex of an informal regulatory structure, which, unfortunately was not always mobilised or inclined to promote the fair conduct of commerce or uphold consumer rights.

The NTSA, especially, deserves plaudits for what it has done in introducing new rules. Kenya has always held the ignominious tag as one of the leading countries in the world when it comes to the number of deaths caused by traffic accidents, and a large part of this was rightfully blamed on the PSV sector. Granted, the systematic measures taken by the authority were initially seen as intrusive, but they have been widely welcomed after stakeholders saw for themselves the sanity they have brought into our industry and roads.

No frills service

Measures taken by the authority have borne fruit and industry is now more organised. The NTSA regulations have streamlined the industry more for operators and passengers alike. With implementation of speed governors and tracking devices, passenger safety and comfort, which at one point was non-existent, has become the priority that it ought to be.

As someone who has been at the helm of a PSV firm for the last 40 years, I believe the next arena for regulation should be fares. As competition heightens, and the market and various routes almost get saturated by the entry of many new players, we have seen a tendency by certain unscrupulous operators to cut corners and undercut on price.

Such practices may appear innocuous and their effect on the industry minuscule. But nothing could be further from the truth. When an operator uses substandard vehicle parts because they have undercut on price and as a way of compressing costs and maximizing profit; passenger safety, which incidentally is a key objective of some of the NTSA rules, is greatly compromised, with potentially grave consequences for passengers, the health of the national fleet and the industry as a whole. It nullifies all the good work that the authority is doing, when such practices continue unchecked.

I believe any form of fare regulation regime must of necessity also include proper description of services available in the sector to ensure passengers make the right choices and most importantly, they get exactly the service that the operator has promised to deliver at the right price. For instance, what exactly constitutes luxury bus travel as opposed to basic, no frills service? What should the customer expect as a bare ‘irreducible’ minimum from someone promising the said services or advertising the same through the mass media, and most importantly, what should be the acceptable fare range for the relevant type of service on each route?

Finally, as we lay firm and bankable regulatory regime for the sector, one that will hopefully serve us into the next decade, we must never lose sight of the fact that regulation has to work in tandem with other factors to deliver an efficient PSV sector. One key factor, that we must never lose sight of, is infrastructure. The biggest challenge today that has adversely affected our performance is traffic jams, a child of an overstretched and poor road infrastructure.

Traffic jams cause our vehicles and passengers a lot of delays and directly affect our service delivery. Other debilitating factors include rising costs of fuel and a volatile exchange rate. These, and especially the latter, increase operational costs across the board as most of our factors of production solely depend on imports among them tires, fuels, spares and bus accessories.

—The writer is the managing director, Coast Bus Limited.