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Kenya Bus Service Management Ltd
Kenya’s transport service poses many challenges to bus operators. Edwins Mukabanah, managing director of Kenya Bus Service Management Ltd tells Andrew Pelis how his company is making a real difference in Nairobi
he challenge of running a successful bus service in Kenya is one fraught with difficulties and danger. But against the backdrop of failed enterprises, corruption and gangsters, one company has adopted a new approach—and is now making great headway in Nairobi. The story of Kenya Bus Service Management Ltd has its origins in bus operations in Kenya’s capital city, stretching back over 25 years. That was around the time that the company’s managing director Edwins Mukabanah first became involved with the business’s forerunner, Kenya Bus Services Ltd. “The old company was established here back in 1934 and had a branch in Mombasa,” Mukabanah explains. “It was originally owned by United Transport of London but shares were later sold to Stagecoach, before they sold the business in 1998 to a group of local investors. They operated the company until 2005 when it collapsed and at that point, I decided to create a company based on the principles of National Express [the UK-based coach operator], where a brand is used to run fleets for other people.” Mukabanah had seen first-hand how UK bus companies worked, having spent three years there studying transport planning and management at the University of Westminster and later working for Stagecoach. His knowledge and experience gained while working for Stagecoach under Transport for London was invaluable to the Kenyan company as it sought to develop a new model. It is rare in Kenya to meet one like Mukabanah who combines many years experience of hands-on public transport operation and professionalism. However, the reasons for the old company’s collapse were far from easy to remedy, as Mukabanah explains. “In Kenya, the market is filled with paratransit operations which provide an informal, unscheduled, profit-driven service which is unreliable. These kinds of operations do not pay the true cost of labour. This mode of transport does not offer fixed routes or fares, and the old company was competing against these operations that encourage unfair and wasteful competition. “Furthermore, the industry is unregulated and there has been a succession of failed bus companies in the country as the paratransit model tends to move towards smaller capacity—typically minibuses.” Aside from the competitive nature of the sector, Mukabanah says there are other factors that act to the detriment of legitimate transport
Kenya Bus Service Management Ltd
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operate in the Central Business District of Nairobi and could travel along certain routes. “Today we have grown to run 152 franchises which own up to seven buses each and in total we have 292 buses that operate under our brand,” he continues. The company has encountered many challenges concerning the lack of regulations when it comes to enforcing the brand. “The laws in Kenya on infringement are very weak,” says Mukabanah. “Even so, although many of the vehicles are small, we have a very visible household brand and look forward to the government legislation on an Integrated Transport Policy, which will encourage grouping and franchising.” Aside from the operating model, another big difference between Kenya Bus Service Management and other transport providers is the age of its fleet. Mukabanah says that his company owns fleet assets totalling in the region of 800 million Kenyan shillings (US$10 million) and
“Today we have grown to run 152 franchises which own up to seven buses each and in total we have 292 buses that operate under our brand” providers. “Issues like congestion, accidents and pollution all regularly occur, while the road surfaces are in many places very poor and riddled with potholes; but there are also problems with cartels who control certain areas, making some routes inaccessible. There are also gangsters who extort money from bus companies.” Given the extent of the problems facing bus companies in Nairobi, it is heartening to learn that Kenya Bus Service Management is making good inroads into changing the model of transport in the capital. Today, the company transports around 2.9 million passengers a month. One of the first things Mukabanah did in mid 2006 was to approach local bus companies to join his enterprise as franchises. “I saw that to operate in this situation, one needed an individual operator to apply some degree of micro management with standards that were acknowledged within a brand. I had a small fleet of vehicles and invited small companies to become a part of our enterprise. Although there was initially a lot of rejection, this changed when businesses learned that I had obtained a license to
the average age of a bus within his company’s business is three years (although these are owned by the individual franchisees, including some who only offer services at weekends). Other operators, meanwhile, purchase much older vehicles from countries like Japan and then adapt them to Kenyan needs. Currently Kenya Bus Service Management receives around 40 to 50 buses each year. The next phase of the company’s plan is to create value through associations with other businesses like fuel suppliers. This is especially important, says Mukabanah, as fuel constitutes 40 to 50 per cent of operation costs and has increased by up to 20 per cent over the last couple of months. Other partnerships could include bus suppliers and insurance providers. Maintenance remains an issue, with the vehicles needing durable chassis to drive over the terrain; although Mukabanah feels that the Kenyan government has done a lot to improve the condition of roads in Nairobi over the last two years. The standard of drivers, he says, is more of a problem, so another exciting initiative that
Kenya Bus Service Management Ltd
the company has introduced has been the only Passenger Carrying Vehicle training school in Kenya for drivers and conductors. “Over the last four years we have rented premises, and we spend over one million shillings each month. The site has a garage, which is important as there are no local authority depots in Kenya, and a training school. We charge a fee for each inductee as the people we train will often acquire a Kenya Bus Service Management certificate and find work elsewhere more easily. We have put over 950 drivers through our training and some 1,081 conductors.” Mukabanah says that his company’s approach is redefining the future of public transport operations in Nairobi, and that is likely to magnify with greater use of technology. “The original firm was the only computerised bus company back in the 1980s, and when it went down we decided to create in-house programmes that aide our accounts, maintenance schedules and rotas. We
also use ticket machines from the UK and we are now looking at the option of introducing a pilot cashless ticket system which will help to end corruption, cartels and theft on buses in Nairobi. Information technology is the key to changing this industry in a developing country.” Kenya Bus Service Management being the only member of the International Association of Public Transport in Kenya (where they gain from sharing international best practice), Mukabanah sees a future where his company can help the government to shape definitive guidelines and legislation that may lead to Kenya Bus Service Management moving into leasing and management. Already the business has received enquiries as far afield as Kampala in Uganda, Juba in Southern Sudan and Dar Es Salaam in Tanzania. “We will see if we can operate in Mombasa eventually, but only after we have good legislation and the necessary transport management institutions in place,” he concludes. www.kenyabus.net
Published on Oct 12, 2010
www.kenyabus.net Businessexcellence C O R P O R AT E B R O C H U R E ONLINE ACHIEVING The roahigher T Kenya’s transport service poses many c...