Pioneer Easy Bus was poorly run but here’s why government should save it

Solving Kampala’s traffic and transport challenges requires investments in physical infrastructure, such as wider roads and commuter railway lines, among others.

The Pioneer Easy Bus project, much heralded at its launch earlier this year, is now on its last tyres, as it were. Business school students would have a field day deciding which of the many problems has contributed most to the company’s woes.

They would have to choose between undercapitalisation and mismanagement, the lack of physical infrastructure to the lack of a financial management system, among others.

People familiar with the project say, some of the directors were also suppliers to the company and insisted on their, often inflated, claims being paid before more pressing obligations. Other employees, whose job was to collect money on the buses, sometimes also chose to pay themselves by simply disappearing with the day’s collections.

The capitalist sentiment, is to allow a market correction in which Pioneer is either allowed to die, or in which it ruthlessly adjusts itself in order to stay alive. The smart thing is to ignore the former and assist in the latter. For all its problems and shortcomings, the Pioneer Easy Bus project is a useful effort to address the chronic problem of mass rapid urban transport in Kampala and neighbouring towns. That function is too important to be left to private individuals.

Pioneer and its backers can bring in a couple of hundred buses but they cannot single-handedly change the way people move in and out of the capital. Solving Kampala’s traffic and transport challenges requires investments in physical infrastructure, such as wider roads and commuter railway lines, among others.

Whereas the project brought in some buses, they were too few for the task and ended up spending hours in traffic in the absence of bus lanes. They were never going to break even, let alone make a profit.

The bus project returns us to the old argument that government cannot do business and that we should let the free markets regulate everything. The problem with free market theory is not that it is inefficient; rather that it is oblivious to social considerations, while contradicting itself by seeking, in its more extreme forms, to keep out government, either as a contestant or as a regulator.

The economic troubles in the West in the last five years have seen ultra free market governments bail out private sector players, from the auto industry in America to the banks in Europe. Our biggest challenge is not to keep government out of business, but how to keep government in key business areas and ensure it is efficient and profitable.

In some areas profit must come second to the provision of an efficient public service. Urban transport reform in Kampala and surrounding areas is one of such key areas.

Few private actors have the deep pockets necessary to make the required capital investments or the physical infrastructure improvements. Government can provide shoulder capital, guarantee long-term credit, and push necessary legislative proposals, such as by-laws to create bus lanes, to credible local and foreign investors in exchange for equity participation in the project.

The current shareholders would have to bring in professional management and credible equity partners with experience in managing similar projects, and remove themselves from the running of the project. They cannot and should not simply be handed a blank cheque.

Similar arrangements can be made for other companies with licenses to manage transport in the city (the thugs in Utoda need not apply) with a requirement for them to list on the local stock exchange once they are profitable.

The Kenyan government did it for Uchumi; the US for General Motors; UAE does it for Emirates; the South Africans do it for their airline and more; why can’t we do it formally and transparently for local companies that are deserving?

Revelations from the Public Accounts Committee of Parliament in the on-going investigation into the Office of the Prime Minister continue to beggar belief. The latest is that Geoffrey Kazinda, the rotund alleged ‘burglar of Bukoto’ has been blocked from coming to meet his accusers, including permanent secretary Pius ‘Pious’ Bigirimana, who has been blowing the Whistle since 2010.

A story of theft has now been reduced to semantics and legal gymnastics. Where is strong, resolute leadership when you need it? Idi Amin must be turning in his grave in Saudi Arabia! Wouldn’t many of the said suspects already be six feet under were he still in power? Would we be better off?