CREW Project
Research Findings of Diagnostic
Country Report (DCR), Ghana
Bus Transport Sector
OUTLINE
1.
2.
3.
4.
5.
Introduction of mass transportation in urban areas,
aiming to move at least 80% of passengers through the
use of large capacity buses to improve road utilization,
especially in urban areas at affordable prices to support
the poor and vulnerable.
Policy Reform on Strengthening Private Sector Operation
in Bus Transport Industry.
Introduction of measures to ensure road safety
Advocacy Strategies
Concluding Observations
INTRODUCTION OF MASS TRANSPORTATION IN
URBAN AREAS (MMT)
 Policy Goal: To provide mass transit for 80% of passengers in
order to conserve road space at affordable prices to the poor.
 Market Benefit: The expected market benefit was to
subsidize a public transport operation to reduce fares which
will lead to an extension of demand to compete with
alternatives for them to offer cheaper public transport.
 Impacts: MMT entered the market in 2006 on the basis of
Government direct intervention.
 Fares are 40% Cheaper. There is about 90% passenger
preference for its use
 It offers a wider scope of service in terms of route
variation
 Despite the growth in fleet size, the operational size of
the fleet has been under capacity.
INTRODUCTION OF MASS TRANSPORTATION IN URBAN
AREAS (MMT)
 Fleet operation capacity ranged between 81.3 and 54.4 percent at
an average of 63.9 percent per annum.
Description
Average fleet held
% Change of operational fleet capacity
2006
2009
2012
586
61.3
1103
56.0
1,049
77.1
Passenger carried (M)
55
30
38
 The operation is not able to break even and have poor vehicle
maintenance regimes due to price regulation. Other challenges
include fare leakages.
 Competition Concern: Operations of the MMT does not offer any
barriers to its private competitors since the threshold of market
controlled by its operation is low at about 5 percent
POLICY REFORM ON STRENGTHENING PRIVATE
SECTOR OPERATION IN BUS TRANSPORT INDUSTRY
 Policy Goal: The private sector will be encouraged to invest in
transport infrastructure and services
 Market Benefit: Ease of funding for private bus operators will
result acquisition of new vehicle fleet for high quality and
safe services with competitive advantage for both the bus
operator and the user.
 Impacts: 94% of intra-city bus operator use their own
resources while 6 percent used loan facilities. Out of this 20%
benefited from government arranged private partnership
schemes
 89 % of the private operators indicated that it is difficult to
generate own resources towards the procurement of buses
 Loan schemes have stopped due to high default rate
attributed to higher interest rates.
POLICY REFORM ON REGISTRATION OF COMMERCIAL
VEHICLE OPERATORS
 Policy Goal: To introduce efficiency in the industry, enforce
transport regulations effectively and improve performance
standards for quality.
 Market Benefit : Instigate intense competition amongst rival
companies strive to increase market by offer attractive
services to customers through aggressive marketing based on
high quality services with higher safety standards by tender.
 Impact: Route Registration for bus operation could not take
off due to the failure of the BRT project caused by rejection
of agency control and oversight management by an
independent entity.
 Competition Concern: Bus route allocation is still controlled by
unions with the exception of a few free flowing drivers who
refuse to join unions.
INTRODUCTION OF NEW REGULATIONS AND
STANDARDS ON ROAD SAFETY IN THE SECTORS

Policy Goal: To undertake nationwide road safety road safety
planning education, advocacy and resource mobilization for
interventions.
Motor Vehicle Act
 Road Traffic Ordinance 1952 regulate: licensing vehicles,
traffic signs, police traffic control, overcrowding front seat
among others; Enforcement in the road traffic sector is
guided by the following Road Traffic Rules and Regulations:
Road Traffic Regulations LI 953 of 1974, Road Traffic Act 683
of 2004, and Road Traffic Act 761 of 2008
 Market Benefit: Reduce road traffic deaths in the country
from the current annual average of 1,600 to less than 1,000
and to achieve a single digit fatality rate by the year 2015.
INTRODUCTION OF NEW REGULATIONS AND STANDARDS ON
ROAD SAFETY IN THE SECTORS
 Impacts
License
Type
Awarding
Authority
License Type/Awarding Authority for Bus Operation
Operation Insurance Union Tax Road
Drivers
Permits
Worthy
License
MMDA’s
Insurance Unions
DVLA
DVLA
companies
Income
Tax
Internal
Revenue
 48 % of the intra-city bus operators rated the ease of licensing as
being fairly easy, 42% rated it to be difficult with about 10% not
sure
 Road safety remains a major problem and in recent times security
has also become an issue on some routes. For example between
2008 and 2009, occupants of buses recorded the highest
percentage increase in fatalities of almost two-thirds (65.2%).
 Competition Concern: The reform initiative has not created the
level of competitive efficiency of bus service by operators
CONCLUDING OBSERVATIONS
 The proposed policy reform has impacted in different ways and no
single measure has simultaneously delivered all of the expected
objectives.
 The scope for effective competition in terms of costs, market
differentiation, and other business issues in the industry is not
effective.
 With the exception of unions competing with each other in order to
protect their own territories"; and brief periods of intense rivalry
between public and private bus operators competition has
stagnated with each operator not facing any serious challenge from
the other.
 There is no incentive to increase services, improve service quality,
create innovation and even lower fares to the disadvantage of
passengers.
 Correspondingly, there is further need for some institutional
adjustments of the current dispensation, to make the system work
better