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Transport operators fret over Zupco scheme

By Brenna Matendere

Transport operators that are part of the Zupco franchise scheme are up in arms against the government-owned company, which they say is underpaying them for the use of their vehicles.

Last year the government introduced the “Urban transport mass mobilisation” scheme where bus owners were allowed to operate under the Zupco franchise as a form of subsidy following the bloody January protests that were sparked by a steep increase in the price of fuel.

Commuter omnibus operators were also added into the scheme.

Authorities are reportedly mulling a complete ban on privately-owned commuter omnibuses that were pushed out of the roads at the onset of the ongoing lockdown to curb the spread of coronavirus.

Under the Zupco scheme, transport operators with public passenger vehicles certified fit by the Vehicle Inspectorate Department (VID) hire them out to the government-owned company and they are paid after some period.

Cleopas Nyika, a Gweru-based transport operator, who hired out his kombis hoping to get rich pickings, says the deal has caused him more stress.
“Firstly we are underpaid,” Nyika lamented.

“To be specific, for commuter omnibuses we are paid at a rate of $750 a day, which is slightly above US$10.

“However they deduct 10% of it for those without tax clearance certificates.

“This money is supposed to be paid into bank accounts after every 10 days, but it can take over a month and, as we speak, we last received for the period up to the end of March
“Our kombis start operating at 6am to about 8pm or beyond at night non-stop except for staggered lunch hours, meaning the wear and tear is serious.

“At first contracts we signed with Zupco were saying we make nine trips per day, but they have changed them to say we will be on the road until all commuters have been picked up from bus stops.

“It’s so painful when we are being paid peanuts.”

Regis Munhenzwa, the Zimbabwe Buses Association chairman, said although bus operators negotiated for United States dollar-based contracts, they were being paid based on the official exchange rate.

The gap between the official and parallel market exchange rates has been widening in recent weeks.

As of Friday, the US$1 fetched $80 on the parallel market while the official exchange rate is fixed at US$1:25.

The majority of businesses peg their prices using the parallel market, pushing the inflation rate up. Munhenzwa said payment delays by Zupco rendered the money worthless by the time it was paid out.

“Our spares and other accessories for servicing the buses are charged in US$ and where we buy it the rate is $70 for one US$,” he said.

“So that is how we are suffering. “How do you break even or make profit under such a situation? We are in a fix.”

Greater Harare Association of Commuter Operators secretary-general Ngoni Katsvairo said plans to ban kombis from operating as public transport vehicles were unreasonable.

Katsvairo said it was also impossible for Zupco to absorb all the commuter omnibus operators under its scheme.

“There is a lot that still needs to be done to re-organise individual kombi operators into effective associations or companies that are able to operate profitably while observing the loading capacity, social distancing and sanitisation regulations,” he said.

“Kombis on their own will not be able to operate efficiently and profitably on eight passengers, let alone break even.

“However, our biggest worry is how many kombis will Zupco be able to absorb and whether government will be able to subsidise them all.

“There are over 50 000 kombis countrywide, 15 000 in Harare alone, upon which over 800 000 crew, mechanics, auto mechanics, food vendors and all their families as well as the downstream industry are dependent.

“Our understanding is that Zupco is looking to enrol less than
1 500 kombis.

“So what will become of the rest, is there going to be a buyout programme for these as happened in South Africa where they phased out old models and provided loans to operators to buy new kombis and buses or buy them out completely?”

Katsvairo said transport operators were willing to be part of the Zupco franchise scheme, but only after its conditions are improved.

“The programme will provide an organised transportation system if managed well through making sure that franchisees are paid hire fees commensurate with the costs of operation, paid and reviewed in time, cheaper spares are organised centrally by Zupco and a fleet replacement/upgrade system is urgently put in place,” he said.

“Commuters will benefit from absence of harassment by touts and better ranking infrastructure investment put in place at drop and pick-up points.”

Katsvairo said post-lockdown, government must put in place a workable system that would also accommodate transport players outside the Zupco scheme.

“In the long-term and post-lockdown and opening up of industry, government must put in place a transport policy and laws to assist with the organisation of those left out of Zupco that they don’t come back and operate again as individuals, but under associations or companies in order to maintain an orderly and professional transport system,” he added.

“Stringent laws must also be put in place to deal with touts and protect the organised transport companies from mushika shika operators and pirating by private motorists for sustainability of the sector.

“What we need post-lockdown are major reforms and tighter controls and new regulations on the sector than a total ban.

“Why ban everyone because of a few errant ones? Many official ranks were always full of compliant kombis that do not even pick up/drop passengers at any place other than the designated rank, so why punish these as well?”

Settlement Chikwinya, the MDC Alliance secretary for transport and Mbizo MP, said the Zupco scheme disadvantaged private transport operators.

“The Zupco model has never been ideal for private players, who are expected to supply their vehicles only to be managed by the parastatal,” he said.

“Zupco has proved since time immemorial that its management systems have led to failure and disservice to the commuting public.

“With the tumbling exchange rates on the actual market, it would be suicidal for any transport operator to expect monthly payments at a time that rates are falling every day.

“What makes the whole business model a circus, is that transport operators are expected to foot maintenance bills where prices for the spares are pegged in US dollars.”

However, government spokesperson Nick Mangwana defended the Zupco scheme saying the pay-outs to transport operators were enough for them to service their vehicles.

“The private players have already made their representations to government with a proposal for an upward review of agreed rates on contract payments and this was approved,” Mangwana said.

“The increment was meant to cushion them on their spare parts expenses.”

He said the government would never pay the transport operators in foreign currency as demanded by some of them.

“Naturally government can only pay for local contracts in local currency. In which country does a government pay its service providers in forex?” Mangwana.

He said delays in payments were due to the need to verify claims made by the operators.

“Due to transparency and accountability issues, checks can take longer than planned to make sure only the right people are paid,” Mangwana added.

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