Monday 21st January 2019 saw the return of the Zimbabwe United Passenger Company (ZUPCO) on the roads in and around Harare. This follows combi price hikes which were triggered by fuel price increases announced a week ago. Just as the commuter fares increased, there was a complete shutdown of the country. Everything ground to a halt. An estimated 1 million commuters a day were left stranded, some had to walk into town and back. Then the government thought of ZUPCO. Is this the solution to our transport system or it is just a stop-gap measure? We look at the ZUPCO arrangement in more detail in this article.
History and demise
ZUPCO was formed in 1980. By 1993, the company was operating on more than 450 routes, with a fleet of 1200 buses. At its peak, the ZUPCO transport system ran like clockwork, with strict adherence to timetables and an effective ticketing system. However, following the deregulation of the urban transport system, ZUPCO started to face stiff competition from combis and private bus operators. Their market share started to dwindle. This almost coincided with internal problems that ZUPCO had. Key among these problems were gross mismanagement and unpaid debt. Staff salaries would go unpaid from around 2009. Those who were retrenched in 2010 struggled to get their dues paid. The ship began to sink. Late last year, Local Government Minister July Moyo told parliament that ZUPCO has a debt of $16.1 million. He added that the company has only 56 buses and a disproportionate workforce of 351 employees. Most ZUPCO buses lack proper repairs and maintenance. As such, government is mulling partial privatisation of the parastatal in order to resuscitate it. Minister Moyo advised that 22 local and international investors are currently lining up to partner government in this endeavour. At the moment, ZUPCO is not doing well. They are operating at a loss.
Can ZUPCO deliver?
This is not the first time that government has attempted to reintroduce ZUPCO as a viable alternative in mass transportation of commuters. Many have questioned if at all ZUPCO can manage to alleviate current transport hassles given its past failures. 56 buses are not enough to cater for Harare alone. This is the reason why government has invited other private players to come and work with ZUPCO this time around. From the onset, it is clear that capacity is very limited. If Harare needs 158 buses and they are not even covering all suburbs, Bulawayo and other towns would need much more. It looks like the system will fall short. There are not enough buses to cater for demand.
A more critical question is whether this arrangement is sustainable at all. ZUPCO is charging $1 per trip in all other areas except Chitungwiza which is $1.50 and Norton which is $2. Government may be over-subsidising its citizens once again. This has consequences. Funds for spares may soon run out. Salaries may become hard to pay. Remember, this is a company that bought 100 buses just in 2013. What happened to about half of those buses? According to the ZUPCO website, the 100 buses were procured and custom made by a Chinese manufacturer, First Automotive Group Corporation, previously known as First Automotive Works (FAW). Despite the fact that FAW has a team on standby to provide support and back up on site, the fleet is reducing in number. Somehow, ZUPCO is already operating from hand to mouth. Something is wrong somewhere.
Some might argue that ZUPCO can afford to lower their fares since buses carry more people at once. To an extent, this is true. With diesel now costing $3.11 per litre, we need to understand where ZUPCO are getting their fuel. We cannot rule out the fact that they may even be getting it at subsidised rates from CMED. In any case, private players like Inter Africa would not join in a loss making arrangement. There is certainly something to be gained. Fuel aside, money for spares for repairs and maintenance still needs to be made. Salaries need to be paid. Time will tell if the arrangement allows them to make enough to cover those operating costs.
While the return of ZUPCO is a massive stride in the right direction, there is a lot of work that needs to be done to ensure its viability. At 351, its staff compliment needs to be downsized. With only 56 buses, ZUPCO may be paying people for doing nothing productive. Secondly, the $16.1 million debt needs to be settled to avoid disturbances. Disgruntled creditors have previously sought to attach some of the buses before. This is not good for business. More importantly, the fleet needs to be increased. Perhaps the coming in of investors to partner with government will settle this. Unfortunately, talk of privatisation is not new. This has dragged on for many years without tangible results. The sad fact is that combis will always be there to provide tough competition and ZUPCO needs to pull up its socks up in order to survive in this environment.
Commuters have already welcomed ZUPCO’s return. They have to. It is a cheaper option. A more vibrant ZUPCO may just be the solution to our mass transport system. Sadly, at the moment, ZUPCO is far from being vibrant. The next weeks and months will be critical in determining whether we have found a lasting solution to our problems.