*Says operational cost is recipe for disaster *Govt must subsidize to make it affordable *Why we can’t increase fare amid high cost of diesel
Aftermath of the sad incident of Bamise’s murder in a BRT bus, the Managing Director/Chief Executive Officer, Primero Transport Services Limited, Fola Tinubu in an interview with Ishola Balogun dismissed the fears that BRT may not be safe after all. Mr Tinubu said with the visible bus codes, the driver can be tracked. Also, in this interview, he lamented the rising operational cost and called for government subsidy to make transportation affordable and effective as it is done in other parts of the world. Excerpts:
How has the recent ugly incident of Bamise affected your operations generally?
The bus involved was not one of those managed by Primero. It was one of the buses managed by another entity completely. We really don’t have anything to do with that issue. But people don’t know the difference between Primero and other Bus Operating Companies (BOCs). When people planned to protest over the incident, the Lagos state government asked all BRT operators to shut down to dampen the pressure. It was really a sad incident. I feel so sorry for Bamise’s family. I pray God will console and give them comfort and succour because no matter what we say, it is only God that can console them. I am happy the culprit is being prosecuted and I am happy the Governor has said he will prosecute him to the full extent of the law. Let us leave the court to decide his fate.
At this juncture, it is very important to point out that BRT is safe. If the ugly incident had happened in a danfo or okada, the guy would have gotten away scot-free. Bamise was a very smart girl. She felt she was in danger and she took the number of the bus and passed the message onto others which led to the arrest of the driver. The good thing about BRT is that you can see the bus codes both inside and outside the bus. Our system of operations is such that if I know the bus code and the exact time that an incident happened, I will tell you who was driving the bus and the location of the bus. These make BRT different from other public transportation systems. People should feel comfortable and be rest assured that BRT is safe.
I will like to emphasise that we all need to be security conscious. We need to be aware of our surroundings. If you feel threatened, please say something and leave the place. Bamise tried and I doff my hat for her. As the government is trying to improve security, we the citizens as well need to be security conscious. Provisions of security gadgets and police personnel here and there alone are not enough without us the citizens being safety conscious. We need to know and understand our surroundings, be vigilant and if we feel threatened, do something or call somebody like Bamise did. May her soul rest in peace as I also pray for God to console her family.
The standard of your buses and services cannot be compared with when you started. Now, air conditioner buses are not there, no WiFi compared to when you started, what is responsible for the slide?
First of all, the buses are old, you can’t expect a seven-year-old bus to be like a brand-new bus.
Secondly, the cost to keep the buses on the road is very high, in fact, it is outrageous. Whether we like it or not, we don’t manufacture these automobile parts in the country. We buy everything from abroad, and as Naira loses value, the cost of spare parts rises.
Even at that, our price has not increased in the last two years. Naira has gone up from about N360 it was a couple of years ago to about N600 to a dollar now. All the spare parts we use on the buses have gone up in price; diesel is about N650 now. How do you expect us to provide a world class service? People complain and compare the services they get in Dubai, London and other parts of the world, and I always tell them, it is because their governments subsidize it. We have to do the same in order to get similar services. It is not rocket science.
Some people would say, ‘Fola, in London, when the bus gets to a station at a certain time, whether there is one person there or nobody at all, the bus will not wait, it goes on to another station, then to its destination. What they failed to know is that it comes at a cost. If I decide to increase the price to meet those needs, it will certainly be high, it will not be affordable and commuters will scream. Yet the government is not ready to bear the cost. Everyone wants AC buses, WiFi, and arriving at your destination in record time, even with the high cost of spare parts. Who will bear the cost? The government is not subsidizing it. You don’t pass the social responsibility of the state to a private company. You leave my cost to be determined by the market and it keeps going up even out of control and you leave my cost of operations to be determined by the market and it keeps going out of control. And you control the price that we charge. It’s a recipe for disaster.
If you Google how London transport is funded, you will discover that about 35 percent of their revenue comes from the government as a subsidy. There is nowhere in the world where public transport makes profit. It is only in Nigeria that we think it can make profit. Nobody asked me how I manage to keep those buses on the road. Diesel is now N650 and I am still charging the same fare I was charging when diesel was N250. Every trip we make now is at a huge loss. To pay my staff, over 1500 employees who work on the project, right now is an issue. Yet everybody says they want this and that, who will pay for them?
Have you engaged the government in finding solutions to these issues you have raised?
We have engaged the Lagos state government, we are still talking, we have not reached an agreement, but it is not just the state, it also concerns the federal government. Lagos state is the backbone of Nigeria. The federal government needs to step in. If we don’t do something urgently, it will collapse. Look at the airlines, they increased their fare by 100%. We can also do that but we are not allowed. Yet, I am expected to go buy the diesel at N650 per liter and provide a world class service. I am a businessman and not a magician. If I tell your newspaper not to increase the cover price amidst the huge rising cost of newsprint, ink, diesel and overhead cost, how will it survive?
Considering the critical nature of the transport sector, what is the way out?
Yes, the transport sector is a critical sector that drives the economy. People have to move from point A to point B. If we want to charge the full market price, people will not be able to afford it and it will negatively impact the economy. That is where both the federal, state and local governments need to do the needful. Like it is done all over the world, there is no country with a good and effective transport system that its government doesn’t subsidize. This is because the full market price will not be affordable and it will negatively impact the economy. Certainly, you need an affordable transport system to keep your economy going. That’s what they do all over the world and I don’t know why ours is different.
If government is not interested in transportation business, yet, it builds roads, is that not enough social responsibility?
All over the world, do they not build roads and yet they still subsidize the transport system? If the government says ‘go and charge the market price, and if the people are satisfied with your service, they patronize you, I can understand that,’ that is another option. Or they can as well say, ‘ because we want it to be affordable, we will do A, B, C to subsidise.’ But the present system where you artificially keep our fares low and leave the market to determine our cost of operations, i.e., diesel, tyres and spare parts; is a recipe for disaster. Look at the airlines, they have all increased their airfares. Even other sectors like the banks are reducing their hours of operations. Whether diesel is N1000 per liter, I have to buy to keep the buses on the road. But if I can’t increase my price, who will take the losses?
You just cited an example of airlines increasing their airfares, so, why don’t you do the same?
We can only do that if the government agrees to the increase. In the last 25 years, BRT bus fares have only gone up twice in Lagos state. I fought for both increases. It does not make sense; you can’t have your cake and eat it. If Primero is owned by the government, then we can keep piling up losses. At a certain time, the taxpayers will be there to write off the losses. But we are a privately owned company and whether you like it or not, the people that invested in this are expecting some profits. The government alone cannot run the public transport system. If we want to encourage private companies to come into the sector, then they need a system where some modicum of profit is guaranteed. This is a sector that needs a huge amount of money for investment. To bring in 100 buses into the country, you will be talking about $10 million. Then you will think about support infrastructure. You need good capital to do it. Therefore, if you want the private sector to come in, you have to make it attractive. We can debate the level of profit to curb excesses. Right now, the system is not viable, it is not sustainable.
Right now, the socio-political atmosphere is all about the 2023 elections, what decisions do you think leaders should make in order to greatly impact the transportation sector?
There are some tough political decisions that have to be made. I agree that there are lots of interests competing for the government’s attention. They have to worry about education, healthcare, and workers’ welfare among others and government funds are not infinite. But what do we really want? Do we want a world-class transport system or do we want ‘danfo’ and ‘okada’ mode of transportation? I commend the Lagos state government on its rail project but even the rail also needs to be subsidized to work effectively. This is because all over the world, public transport system does not make money. There is nowhere it makes profit, but they are subsidized by governments. I am hoping somebody can prove me wrong. I would like to see for myself. The London system has about 35% of its fund coming from the government as a subsidy annually. The congestion charge that the government collects in the City of London does not go to the British government nor the City of London government. It goes to London transport. Not only do they get a 35% grant annually, but they also get to keep the congestion charge. It is the same in America, China, Kuwait and other parts of the world where they have efficient transport systems. That is why I say we have to be ready to take tough decisions and make our transport system a world class arrangement. Again, if we want it to be profitable, it will not be affordable. If I should charge the full market price, I will most likely be charging three times what I am charging now. That will not be affordable. The minimum wage is low in the country, an average worker spent about 50% to 75% of his salary on transportation. But all over the world, people spend between 15% and 25% of their income on transportation. And this is why it will not be affordable if you increase the fare to a level where you can provide a world class service. It can only be done with government intervention in the form of a subsidy or grant annually.