Benchmark transport industry cost and revenue — Nana Akomea

There is the urgent need for the government to put in place a mechanism for realistic benchmarking between cost and revenue in the transport sector, the outgoing Managing Director of the Intercity STC Coaches Ltd, Nana Akomea, has proposed.

In his view, benchmarking the cost of fuel and transport fares would allow for some predictability and planning to promote a vibrant transport industry.

Again, he said such a move would boost investment in modern transport.

In an interview with the Daily Graphic at a farewell staff durbar held in his honour in Accra last Friday (January 31), he said the high operational cost as against low revenues had stifled the profitability of transport companies and made it impossible for public transport operators to deliver quality services to members of the public. 

Mr Akomea explained that the transport industry was such that the main cost items - the prices of fuel and spare parts, depended directly on the dollar.

He said anytime there was a fall in the value of the cedi against the dollar, fuel and spare parts prices went up automatically, increasing the cost of operation. 

"However, the main revenue, which is the fare, is not responsive to the rising prices of fuel and macro instability.

The fares are determined by a bureaucracy at the Ministry of Transport; so we have a situation where when there is macro instability, the cost of transport rises but the revenue is the same. 

"So, it gets to a point where you cannot pay for spare parts, and you owe oil companies," he said, adding that such a situation was inimical to the country's quest to have a robust transport industry. 

Ideal situation

The former STC MD said although he was aware that the government could not do a one-to-one benchmark between fuel prices and transport fares, some mechanisms needed to be implemented in that regard, given that transport was central to the economy.

"It will not be feasible to do a one-on-one benchmark of the dollar and transport fares, but there has to be a predictable benchmark.

We can, for example, say that when the price of fuel goes up by 10 per cent, there should be a corresponding rise in price by five per cent.

That will make the cost-revenue structure more responsive. 

Bus lanes

Touching further on how to promote a vibrant public transport industry, he said it was important for the government to create dedicated lanes for buses.

Mr Akomea said the creation of bus lanes would help to reduce traffic congestion, especially in the capital city, and also help to reduce travel time.

He noted, for instance, that Accra to Kumasi was about 270 kilometers (km), and under normal circumstances, such a distance should not take more than three hours if one was driving at 100km per hour.

"But, now it can take you more than six hours because of vehicular traffic," he said.

He noted that if the bus lanes were created and enforcement done by wardens, it would help to deal with the gridlock during rush hours.

Mr Akomea said apart from helping to decongest the city of vehicles, such a move would reduce the cost of fuel, travel time and give comfort to passengers.

Taxes

He also called for a reduction in the cost of importation of vehicles to help boost the transport industry.

"Look, STC is trying to bring in 22 new buses into the country in April, this year; but the importation cost of these buses is $20,000 per bus. That is a lot of money.

"So we are using our subsidiary in Abidjan to bring in the buses through Cote d’lvoire which has five per cent tax," he said.

He called on the government to consider benchmarking tariffs at the ports with those of neighbouring Francophone countries. 

Legacy

The Deputy Managing Director in charge of Technical Services, John Awuku, commended Nana Akomea for his sterling leadership that helped to transform the company.

"I am a member of the National Democratic Congress (NDC), so when Nana Akomea came, there were calls for him to sack me, but he resisted.

"This decision was a mark of patriotism and thinking beyond political colours; and I have worked with him for almost eight years,"  he said.

Mr Awuku said the best tribute to Nana Akomea would be to ensure that the legacy he had left at STC was sustained and improved upon.

Appreciation

During the staff durbar, the workers of STC paid glowing tribute to Nana Akomea for his sterling leadership. 

Speaker after speaker described him as a legacy leader who did not show any biases or played one staff against the other.

The workers union leaders and departmental heads presented plaques and other gifts to him in appreciation of the work he had done over the years.