The yet-to-be signing of a contract enabling Pioneer Easy Bus to operate in Mukono and Wakiso districts is the final hurdle for the city company to resume operations, The Observer has learnt.
However, even after the beleaguered company resumes operations, following a nearly two year interruption, it is likely to lock horns with Kampala Capital City Authority (KCCA) over conditions in the new contract.
One of the likely sticking points is the gazetting of bus lanes to enable Pioneer Easy Bus (PEB) commuters to ply the minimum number of daily trips agreed upon in the contract.
In an interview with The Observer on Wednesday, the PEB corporate and legal affairs manager, Esther Kemigisha Tayebwa, said KCCA would have to fulfil its end of the bargain on bus lanes.
“We have an agreement that is giving the [bus] lanes; so, it is an issue of ‘if you are not giving the lanes, then you cannot really expect money from us’ kind of thing,” she said.
“If you can’t give us the lanes within a certain period of time, then don’t expect to tax us at the end of the month.”
According to the contract between KCCA and PEB, the latter is to remit Shs 300,000 per bus to the city authority on a monthly basis. That money is independent of the taxes that it is expected to pay to URA. Tayebwa added that once PEB resumes operations, the company will need to erect bus terminals in different parts of the city, which is likely to put them at loggerheads with a city authority undertaking road infrastructure re-development works.
“We just have to look for land, but KCCA has plans to do their own so that contradicts our own plans. We will see how to share,” she said.
Having started operations in early 2012 as the contracted provider of public transportation in Kampala, PEB ran into trouble with Uganda Revenue Authority (URA), barely a year later. In February 2013, URA impounded 100 PEB buses over failure to pay tax arrears amounting to Shs 8 billion.
PEB’s tax troubles have since been sorted. In March 2014, PEB signed a memorandum of understanding with URA, giving the bus company the go-ahead to resume operations whenever they were ready.
“We will pay our taxes four months from the time we start operations,” Tayebwa said, adding that the MOU was valid for two years.
Plans to resume operations early this year were, however, put on hold, pending a review of the contract signed with KCCA. According to Tayebwa, a new contract needed to accommodate the interests of authorities in Mukono and Wakiso, since PEB buses would ferry passengers to and from the two districts as well.
“We realised that KCCA’s boundaries are limited to Kampala and yet the buses were going to Mukono and Wakiso,” she said.
In response, KCCA spokesman, Peter Kaujju, said KCCA has not been directly involved in any negotiations between PEB and authorities in Mukono and Wakiso.
“As regards the neighbouring districts, it is a matter outside the jurisdiction of KCCA but consultation is ongoing. Pioneer is at liberty to engage with them,” he said.
The fresh contract, although eventually drafted and agreed upon by all four parties, could not be signed until the government had revised its Road and Public Safety Act to regulate the activities of city commuter buses. Kaujju said the city authority “has only just learnt” of the statutory instrument by the ministry of transport on buses amending the city bus transport regulations of 2011.
“We are reviewing it with a view of engaging Pioneer [bus] on modalities regarding the resumption of services,” he noted.
Nevertheless, Tayebwa says they have cleaned up their house and are only waiting for KCCA and their counterparts from Mukono and Wakiso to set a date when they can sign the contracts that will pave the way for resumption of their services. Asked how they would resume operations before KCCA fulfils pending issues such as bus lanes and terminals, Tayebwa said they would “have to enter negotiations” to ensure that those conditions are met along the way.
“Everyone has their obligations and they have to meet their obligations,” she said. “What we have agreed [so far] is that where it is possible, they are going to put the lanes, for example that [newly-expanded] road from Nakawa to ministry of Internal Affairs.”
At the time of its suspension, PEB had purchased 100 buses and planned to bring in a similar number, progressively, until it met the 522 total agreed with KCCA. With some of the buses purchased using bank loans, Tayebwa said PEB shareholders had had to shoulder the burden of repaying the banks during the suspension of its services.
“This was a financed business; so, it is still being charged monthly. Shareholders are chipping in but also the banks have been kind enough to halt some of the penalties. We are looking at only the interest,” she said.
PEB, who vacated their offices at Plot 31, Mpanga Close, Luthuli avenue in Bugolobi, sent its staff of at least 400 personnel on indefinite unpaid leave, pending a resolution of the problems that halted their work. Tayebwa said all their employees who were still available would get their jobs back when the company resumes operations.
According to Tayebwa, the company will be under largely new management when it returns to work, and is currently improving its transport fare management systems.
“The fare structure is going to be only strictly cards,” she said. “We are also talking with some telecoms to see how we can use mobile money so that it is easy for people to pay.”