It’s been
more than a month since the Pioneer Easy Bus Company was pulled off the
streets.
Interestingly, after only a year, their removal
from the Kampala streets has caused a transport crisis. Investors in taxis
probably sold out and left the business altogether and in the last year maybe
no more new taxis joined the ranks, hence our current situation.
Pioneer found their fleet grounded by Uganda
Revenue Authority (URA) due to an accumulated tax bill of sh8b.
This tax bill came about because Pioneer was
allowed a twelve month holiday to pay the import duty on the buses. Maybe they
thought URA would forget.
The case of the Pioneer Bus Company raises several
issues about how business is done in this country.
No one will deny that Kampala is in dire need of an
efficient public transport system, especially when this lack means that lawless
taxis and irritating boda bodas rule our streets.
It does not take nano technology to work out that
with an ever expanding day population and the sprawling growth of Kampala’s
suburbs that our transportation needs are growing.
Up to this point we have been content to let public
transport grow as it may and in the process we ended up getting held hostage by
Uganda Taxi Owners and Drivers Association (UTODA).
So desperate were we to be rid of UTODA that
Pioneer was like rain in the desert.
The business potential of running a transport
service seems quite obvious. So calls for the Government to run the service are
really unnecessary.
What the Government can do, however, is to open up
the sector to businessmen in an orderly fashion, but not before carrying out a
thorough study of environment, which study would serve as a basis for
businessmen to make informed decisions of the viability of such an industry.
An open bidding process would be the logical
progression that would attract time tested operators with the financial muscle
to do the business. And, maybe, city authorities would give different routes to
different service providers – as I know is the plan, instead of direct competition
on the routes.
Government would have factored in the possibility
of tax breaks and other concessions it would have made to the business
operators to make the endeavor more commercially viable.
Government has its share of blame to carry but also
the promoters of Pioneer have shown themselves to be clearly out of their depth
on this deal.
It’s
amazing how the populists who barely a year ago were criticising the Government
for helping force UTODA off the streets are now the very same ones who are
saying that Pioneer’s tax should be waived.
Government
subsidies to private businessmen are always a sticky issue and are likely to
cause more damage, which damage would be masked by the service provided however
inefficiently, never mind that the distortion to the playing field may have
discouraged more credible operators.
There has
to be a coincidence of needs by the technocrats and businessmen.
The
current mutual distrust between technocrats and businessmen has to be bridged.
Technocrats
view businessmen as cunning and always angling for advantage at the expense of
the public while businessmen see technocrats are bribe seeking good for nothing
other than throwing up impediments to progress.
The
preferred attitude would be for the public sector to see their role as enabling
businessmen to thrive so they can pay more taxes, which taxes can be employed
in improving the provision of public goods.
It is
unlikely to happen soon.
In the
Pioneer case such an attitude may have ensured that we have a better quality
promoter of the project – never mind what country they are from, provided a
transparent raft of incentives to ensure the business succeeds and cooperated
with the businessmen to vault the inevitable challenges that come with doing
business.
The
solution to the Pioneer saga is not for government to take over the service,
neither is to forgive the company the taxes that are rightfully due to the
country, the solution will come with a sincere appreciation for a working
service by the powers that be and a genuine search for the best possible
provider available to get the job done.
