CREW PROJECT BRIEF OVERVIEW OF THE PASSENGER TRANSPORT SECTOR IN GHANA Dr PAULINA AGYEKUM 7th MAY 2013

REFERENCE POINTS FOR TRANSPORT DEVELOPMENT Policy Vision Provide an integrated, efficient, cost-effective and sustainable transportation system responsive to the needs of society, supporting growth and poverty reduction and capable of establishing and maintaining Ghana as a transportation hub of West Africa. Shared Growth Agenda Provision, expansion and maintenance of transport infrastructure of all kinds business

REFERENCE POINTS FOR TRANSPORT DEVELOPMENT Provision of affordable, safe and accessible transportation system for Develop and strengthen the appropriate legal, institutional and regulatory framework Ministry of Transport Create a well regulated market for the provision of transport and infrastructure services which is: Fair, efficient, orderly, and non-corrupt; to meet the needs of customers; Safeguard the interests of the users and private sector operators; and Prevent discrimination against the vulnerable

CHARACTERISTICS OF ROAD TRANSPORT SYSTEM The Transport sector is made up mainly of road, maritime, water air and rail. Road Transport Road transport is the major carrier at 98% of freight and 95% of passenger traffic carriage. It may be categorized into 4 main segments, namely urban, express services, rural-urban and rural Ghana has 65,000km of road made up of .. Trunk roads, ;;;;Urban roads and …Feeder roads

CHARACTERISTICS OF ROAD TRANSPORT SYSTEM About 1,300,000 Vehicle fleet About ..passengers are moved annually Passenger Characteristics Trip purpose: Work, Education, Health, Leisure, Social Level-of-Service : Affordable Price, Efficient travel time, minimum waiting time, availability based on service frequency, Comfort, Reliability, Availability, Safety, Security

CHARACTERISTICS OF ROAD TRANSPORT SYSTEM Percentage of Income: 17% -25% Waiting Time: 30 minutes Urban and 2hrs rural Travel time peak period urban – 15km -25km /hr Approx 450 passengers of cars and buses are killed annually There is a lack of current data on the size and characteristic of transport demand Vehicle Characteristics Passenger cars refer to road motor vehicles, other than two-wheelers, intended for the carriage of passengers

CHARACTERISTICS OF ROAD TRANSPORT SYSTEM Vehicle Fleet : Taxis, Shared Taxis or hired taxis (15%), . Private Cars (10%), Tro tro and Buses (60%), Passenger cars (per 1,000 people) in Ghana is 18 Vehicle per 100,000 pop: Taxi 21, Trotro 42  Used vehicles form 90% at an average age of 15 years

CHARACTERISTICS OF ROAD TRANSPORT SYSTEM There is an oversupply of low capacity buses minibuses.  Cars and taxis take up 55% road space and carry 26% passengers – Trotros and buses take up 32% of road space and carry 68% of passengers

SERVICE PROVIDERS Public transport companies: Government is the majority share holder. Government exercises dominant influence on the companies Fares are subsidised. Private Sector Private transport sector is made up of individual transport owners 9 out of 10 drivers do not own the vehicle; The majority of public transport vehicles are in single unit ownership only a few such as VIP OA etc has larger fleet sizes

SERVICE PROVIDERS The vehicle owner is a semi-passive investor with no direct involvement in its day-to-day operation His commitment to the industry is not strong, and he may withdraw from it when faced with major problem Most of them operate through controlled transport associations such as GPRTU. Associations charge various fees for the usage of bus terminals (Monthly, daily and park loading fees);

SERVICE PROVIDERS Associations set fares, allocate routes and carry out self-enforcement on their operations, regardless of transport needs and efficiency. The association increases its revenue and its political power Ownership pattern restrict the likely level of capital investment that may be made. It produces incentives for maximising short-term cashflows.

SERVICE PROVIDERS Emphasis on short-term cashflow for the owner results in the setting of daily hire rates that leave little margin for the driver after meeting his unavoidable costs This leads to deferral of repair expenditure on the vehicle and avoidance of preventive maintenance. Association do not allow any form of competition and shows strong resistance to any changes/reforms There are compromises on safety standards since tehy are not professionals

SERVICE PROVIDERS Access to finance for the purchase of vehicles is only possible for established transport companies. The initial capital required for new large buses is high and therefore more difficult to raise by private operators, Only a few operators use financial institutions (Banks and leasing companies. Most operators finance their vehicles using traditional channels through down payment or the ''work and pay'' system, which predominates among mini-buses.

OPERATION PROCEDURES Operating procedures designed to maximize their own returns (and those of their members) rather than prioritize customer needs Distribution of routes among operators remains a major issue It is often decided without reference to transport needs It is a subject of frequent disputes among association members

OPERATION PROCEDURES There is no centralized bus routing and scheduling plan for most private sector operation The route network has developed over time on an ad hoc basis as demand has been identified There is high queuing time at loading points. Low vehicle utilization  - High breakdown and low frequency  - High accident rate  - High traffic congestion and pollution in some cities

OPERATION PROCEDURES Terminals are poorly designed, planned and in unkempt conditions Comprehensive transport planning is not given as much importance it deserves The state of public transportation imposes high costs on the economy in terms of high VOC, long uncomfortable commuting times that ruin the productivity of workers. The liberal regulatory / institutional environment does not enhance competition and growth of the industry

MARKET STRUCTURE There is competition between individual transport operators because of free entry and exit, Entry is by: Registration of vehicle with DVLA and certification of road worthiness Registration with respective District Assembly Route licensing system is being done in under the UTP but not on the basis of transport needs. There is no route franchise, this creates conflicts in some situations

MARKET STRUCTURE While fares are controlled by governments in a manner which tend to satisfy social rather than economic factors, fuel prices are determined in relation to crude oil. This system of inconsistent price determination for fares and fuel prices leaves management of public transport always in deficit The re is no entry barrier There is complete absence of governmental policies to regulate the activities of the operators

MARKET STRUCTURE . Much of the private commercial bus sector is self-regulated by the various associations and is made up of numerous small operators working under their name with very little central control. Individual operators work, as they please, and the whole operation can be likened to an uncontrollable franchise operation, with financial contributions to the central body. At present each of the local assemblies issues its own permits for the operation of commercial passenger transport services in its area,

MARKET STRUCTURE Their validity is accepted in the territory of the neighboring assemblies. Permits are issued on demand to any vehicle meeting the basic requirements of roadworthiness, and having a properly qualified driver. These permits are for the whole licence area, and are not tied to specific routes. In practice these regulations are not applied to Metro Mass Transit Ltd

REGULATORY INSTRUMENTS Road Traffic Ordinace 1952, Repealed to road traffic act 683, 2004 and road traffic act 761 2012 It enjoins formation of transport authority Requires all drivers to form management associations Issuance of commercial drivers operating permits Refresher training for commercial drivers New Licensing procedures New DVLA service outlets

REGULATORY INSTRUMENTS Road traffic offenses 1974, LI of June 2012 Towing, use of LPG in vehicles etc, setbelts, helmets, mobile phones

POLICY ISSUES Transport infrastructure investment will be targeted to better serve population, production and aiming to reduce overall transport costs to government and users Mass transportation will be prioritised in urban areas, aiming to move at least 80% of Passengers eg is Pilot BRT project   There are consideration for the introduction of bus priority lanes, measures to form bus operation companies traffic management planning eg Intelligent Transport systems, route franchise, scheduling, safety etc.

POLICY ISSUES Non Motorised Transport (NMT) Infrastructure shall be developed to improve affordability and accessibility for urban and rural communities – Aiming for 10% of passenger movement, eg. Introduction of cycle lanes. Accessibility for women, children, the aged and physically challenged shall be considered in Transport facilities eg. BBRT

POLICY ISSUES Integrated Modal Transport planning fully integrated with, dev. plg and service provision. Eg. Study on ITP, dev planning policy The private sector will be encouraged to invest in transport infrastructure and services where commercially viable. eg Leasing companies etc The ‘user pays’ principle shall be applied to all transport services and maintenance of infrastructure eg. Road fund Act

POLICY ISSUES Explore PPP and Concession options for investment in transport infrastructure and services (single and multi-modal options). Dev of PPP policy and desk at MOF.

POLICY ISSUES Government will provide alternative financing mechanisms including bonds and tax Incentives for investors in transport infrastructure and services, Apply the principles of market regulation to transport services by an independent body ALL Transport Infrastructure development and maintenance projects (above a certain threshold) will comply with existing environmental safeguards

INSTITUTIONAL SET UPS Ministry of Transport and Communication (MOTC) is responsible for the development and monitoring of transport policies and regulations for both private and public sector Driving and Vehicle licensing Authority (DVLA) is responsible for vehicle inspection, to ensure that the safety standards are met Police Motor Transport and Traffic Unit (MTTU) fall under the Ministry of Interior (MOI). This agency is responsible for the enforcement of traffic laws and the collection and preparation of road

STATUS OF POLICY IMPLEMENTATION No planning and no regulatory framework: - Transport authorities take few initiatives because of limited budget, under staffing and no incentives - No administrative planning of transport operations and of public transport network lack of enforcement of regulations creates a chaotic environment which is one of the prime causes of unreliability of public transport

STATUS OF POLICY IMPLEMENTATION Mass transport systems for moving large numbers of people at least cost have not been well developed. Obsolete transport and information technology makes the movements of goods and services less efficient than necessary Policy reforms in the sector need to be directed towards strengthening the institutional and regulatory framework is not in place

STATUS OF POLICY IMPLEMENTATION Academic institutions have failed to introduce transport courses in their curriculum. Not much is known of transport as a profession in the country. Experts in the profession are few they have failed to assert themselves by contributing to national development on transport related issues.

CONCLUSION The high population growth that leads to greater demand for public transport shows no sign of subsiding hence pressure on the transport system is likely to increase substantially. If resources and efforts are not directed to deal with the problems the country will continue to have transport systems that fail to achieve their goals and impair efficiency. These problems have a complex character and constitute a real challenge to government policy makers and transport operators. While the problems can be easily identified the solutions remain distant and afar