$100m up for grabs as transporters eye Dart

An example of the buses that will be used when Dart starts operations. Inset: An aerial view of the bus rapid transit infrastructure in Ubungo, Dar es Salaam.  PHOTOS | FILE 

By Ludger Kasumuni, The Citizen Reporter

Posted  Thursday, November 20   2014 at  09:58

IN SUMMARY

This means all private operators licensed to operate Dart will be scrambling for $100 million revenue yearly during the first phase of the project—and the earnings will surge when more routes are fully completed.

Dar es Salaam. The Dar es Salaam Rapid Transit (Dart), the first public transport mode of its kind in Sub-Saharan Africa, will be a business worth $100million (Sh165.6 billion) a year when its start operating in June, next year, The Citizen has learnt.

This means all private operators licensed to operate Dart will be scrambling for $100 million revenue yearly during the first phase of the project—and the earnings will surge when more routes are fully completed.

It is not clear how much of this money will go to the government’s coffers in terms of taxes.

In a city with about 95,000 minibuses that operate recklessly, the current Dart route will enable private operators of modern passenger buses to ferry an estimated 460,000 people a day.

Based on this number of expected passengers a day, Dart’s initial assessment of market demand suggests that transport operators stand to earn a minimum of Sh165.6 billion each year in the first phase of the project. The earnings of companies will depend on operational efficiency.

A Dart infrastructure engineer, Mr Moses Nyoni, said on Monday that a preliminary market demand analysis had shown that at least 460,000 passengers would be transported each day at a minimum fare of Sh500 in the first phase of the project.

This implies that if all operators are to charge a minimum of Sh500, they will jointly collect a total of Sh460 million per day on a return ticket—translating into a minimum of Sh13.8 billion each month or a total of Sh165.6 billion each year.

“These charges are fair, given the fact that currently many Dar es Salaam residents who use commuter buses spend at least Sh2,000 a day.,” he told delegates at the Metropolitan Lab event who toured the project on Monday. “We have done market demand analysis and established that the fare structure is affordable and cost recoverable.”

Fares range from Sh500 on a normal route but those seeking connecting routes will pay between Sh700 and Sh900. The first phase of the project, which will reduce traffic jams in city roads, includes the 20.9 kilometre busways from Kimara terminal to Kivukoni area, Msimbazi road from Fire to Kariakoo-Gerezani area and part of Kawawa Road from Magomeni to Morocco junction, as well as 27 stations, five terminals and three bus depots.

According to Mr Nyoni, the demand for the services is projected to rise year after year in line with project development and reliability of the services offered.

The project will also include a tender for procurement of buses with unique specifications, construction of three depots at Ubungo, Jangwani and Kariakoo, tender for collection of fares and collection of extra revenue from the shopping centres at the terminals and depots.

The Dart chief executive officer, Ms Asteria Mlambo, said they are set to announce an interim tender for service providers no later than the end of this year.

The interim service providers will start working in June next year while the permanent service providers will start offering services next August, says Ms Mlambo.

Dart Director of Administration Evodius Katare said the tendering process, which is still being prepared, will be based on international tendering procedures and there will be no preferential treatment.

He added: “Whoever wins will be required to absorb local operators in line with the set regulations. There will be no special treatment.”

In the initial stage, the rapid buses will operate between 4am and midnight. But the project is already facing a setback caused by vandalism of infrastructure that has delayed the handing over ceremony. It is not clear what measures will be put in place to address the vandalism of infrastructure by the very same people who are expected to benefit from Dart.

The Dart chief executive officer further says that the project is expected to have a multiplier effect in business and real estate development in that it will attract investors in high rise buildings and growth of Small and Medium Enterprises (SMEs) along the transit roads.

Already, Ashok Leyland—an Indian automobile manufacturing company—announced on Tuesday this week that it had bagged two large integrated transport projects in Tanzania and Zimbabwe worth a total of $79.2 million.

Leyland will supply trucks, buses, light commercial vehicles, spares and allied support services, including training and developmental consultancy. Besides, the company will also address a variety of mobility requirements in various tourism and economic development programmes.

Ashok Leyland Managing Director Vinod Dasari added: “These projects are a continuation of the many pilot projects we have done across Africa to offer integrated solutions and these orders have been won in the face of stiff global competition. The Citizen could not independently verify the firms with which Leyland has struck the deal and whether or not the buses are meant for the BRT.

Funded by the World Bank to the tune of $190 million (304 billion) for the first phase, Dart is set to stimulate more business and formalise slums.