Rwanda revolutionizes public transport with acquisition of 200 buses and tax exemption

On 29 November 2023 at 11:02

The Ministry of Infrastructure (MININFRA) in Rwanda has unveiled a groundbreaking initiative to revolutionize public transportation in Kigali. In response to the pressing shortage of public transport vehicles, the government has facilitated the acquisition of 200 buses, streamlining the purchasing process for interested parties through simplified warranties and the exemption of import taxes.

Set to take effect on December 15, 2023, the ministerial regulation outlines that half of these buses will reach Kigali before December 2023, with the remaining fleet arriving in January 2024.

Dr. Jimmy Gasore, the Minister of Infrastructure, confirmed the presence of 40 buses in Rwanda, and an additional 60 are in transit from Dar es Salaam. The initial batch of 100 buses is anticipated to be fully operational by month’s end.

Dr. Jimmy emphasized the close collaboration with public transport operators in Kigali to facilitate investment in the sector, encouraging all Rwandans to seize this unique opportunity created by government measures.

The tax exemption initiative aims to alleviate financial burdens on investors, facilitating easier access to bank loans and reducing costs for end-users. Richard Tusabe, Secretary of State in charge of National Treasury at the Ministry of Finance and Economic Planning, clarified that this move does not signify a government return to the public transport sector but rather a strategic response to the urgent need for additional vehicles in Kigali.

A comprehensive study identified a shortage of 305 buses, prompting the decision to import 200 as the initial phase of addressing the shortfall. Tusabe further highlighted that the bulk purchase of buses resulted in more favorable prices, with the government’s assumption of import taxes ensuring dealers can acquire the buses at reduced costs, thereby preventing fare increases for passengers.

In a bid to facilitate financing, measures have been implemented to encourage banks to lower interest rates and expedite loan approval processes. The Business Development Fund (BDF) has committed to providing guarantees for at least 70% of borrowed amounts.

Interested parties can acquire these buses either through direct payment or by utilizing a bank of their choice. However, it is stipulated that no individual or company can purchase more than 20 buses among the first 100, with purchase requests required before December 8, 2023.

Prospective buyers are required to visit the Rwanda Utilities Regulatory Authority (RURA) to complete an application form before finalizing their purchase. The Ministry of Infrastructure has specified that any bus owner, whether an individual or a company, meeting Kigali’s public transport standards will receive transport authorization from RURA. Each city route is mandated to have at least two service providers, ensuring operational diversity.

To elevate service quality, only buses with a minimum of 29 seating places will receive authorization, with preference given to those capable of accommodating 70 passengers or more for long-distance journeys.

For older vehicles, there is a 15-year age limit for those currently in operation in the country and a five-year limit for imported buses. Additionally, all buses in the public network must be equipped with a digital payment system, and transport permits will be valid for five years.

This visionary initiative promises to transform the public transportation landscape in Kigali, providing innovative and accessible solutions to enhance urban mobility.