Moses Akaigwe
Fola tinubu holds a BA degree in Economics and Politics from the University of East Anglia in Norwich, England, and an MBA from the University of Stirling (Scotland). He is the Managing Director of Primero Transport Services Limited, operator of BRT buses in Lagos.
Three years after Primero first deployed over 400 blue buses on the Ikorodu-CMS corridor, Tinubu concedes in this interview with Daily Sun that the BRT service in the fast growing city has not yet hit the world-class his company envisioned. He reiterates that even in the face of challenges, the target of delivering BRT transportation “Lagosians can be proud of and talk about anywhere,” is still in focus.
He, however, lamented that BRT operation is confronted with challenges, including the inability to generate enough revenue even as costs of running the vehicles keep rising, adding that this is because the service is regulated, and as such, fares cannot be fixed to cover costs and make profit. “You cannot cap our revenue generating ability and watch our costs continue to gallop. It is a recipe for disaster. The danfo buses are making profit because they are not regulated and they can charge any amount they like. We can’t do that because we are regulated.”
The Primero boss hinted at the plan by his firm to commence the assembly of its buses in Epe this year, in order to save the foreign exchange spent on importing them. He also spoke of the impending introduction of cashless ticketing.
Excerpts:
BRT concept, journey so far
The Bus Rapid Transit (BRT) was conceived by the Lagos State government under Asiwaju Bola Ahmed Tinubu and LAMATA. They called for bidding for Ikorodu-Tafawa Balewa Square (TBS) corridor, and we submitted our own bid. Luckily, we won. That was about four years ago. We brought in 434 buses for that corridor alone and we have been operating on that corridor for years now. We have had ups and downs. There have been challenges because there is no way you can run something this big in Nigeria without its ups and downs. But we are still there and we hope to still continue.
I would not be the best person to say how the service has faired because it is always better for others to evaluate you than for you to evaluate yourself. I believe we are trying. We may not have achieved our own goals or targets but we are working and we will not relent until we provide a world-class service for Lagosians that they can be proud of and talk about anywhere – that they have world-class BRT service in Lagos.
Designated corridors
The Lagos State government has 13 BRT corridors planned. The Ikorodu-TBS is the first one. It was planned and designed by the Lagos State government, not Primero. So, credit must go to Lagos State government. What we did was that we submitted our own bid and we won the bid. The second one is Abule Egba-Oshodi, which I think will be ready this year. We have submitted our bid also, but the Lagos State government will have to decide who wins. They will go to third corridor, fourth, fifth and so on. They already have the master-plan for the whole of Lagos State worked out.
Challenges
Our biggest challenge is the naira, which affects all strata of our businesses. When we started, we took a foreign loan to buy buses. We bought the buses from outside the country and we took a dollar loan. We did it when naira was N168 per dollar. We all knew what transpired when the dollar was N520 before it went down to about N360. So, that created a big problem for us. This is because our debt doubled. But more importantly, because every component we use on the buses is imported, our costs also went up. You can see that it is not only that our debt doubled, our costs of operations went up. For example, tyres went to about N50,000, N70,000 to about N140,000 and now N150,000. When we started we were buying diesel at N119 per litre or N150, but now it has jumped to N250, N260. So, the cost of operation went up and debt doubled, which created a kind of crises for us. Luckily, our bank, Sterling Bank, stood with us and we were trying to find a way to make things work. It has been a very big problem for us. We thank God we weathered the storm and there is light at the end of the tunnel.
Why no fare increase?
We are regulated by Lagos State government. I cannot just wake up tomorrow and say I want to increase my price. In the last 13 years in Lagos State, there has been only one increase in bus fares. Everything goes up in Lagos with the exception of bus fares. There has only been one increase and I fought for it last year. It took me almost six months of yelling and begging and eventually, it was increased but even that increase did not satisfy the situation; although it provided some succour. That is why I keep saying that we must have an honest conversation about bus transportation service in Lagos State. Do we want a world-class service or not? If we want it, then it has to be paid for. The question is, who pays for it. You cannot transfer a governmental social responsibility to a private company. It is not fair. While we agree that there is a social element in our business, it does not mean you should transfer a governmental social responsibility to a private company. If we are a government agency, we can continue to accumulate losses because there is taxpayers’ money to back us up. We are not a government agency but a private company. People believe Lagos State owns part of Primero but Lagos State does not own a single share in Primero. Lagos State does not have one single kobo invested in this company.
So, you cannot cap our revenue generating ability and watch our costs continue to gallop. It is a recipe for disaster. I have been saying it for almost two years now and I guess people are beginning to understand. The danfo buses are making profit because they are not regulated and they can charge any amount they like. We can’t do that because we are regulated. And we do not enjoy any kind of subsidy.
Long queues, delayed bus arrivals
We have actually addressed the problem. What happened was that about six or seven months ago, we made a decision in the company. We made the decision because some of the parts we bought locally were of inferior quality and they were not durable. For this reason, our buses keep breaking down fast. We made a decision to go and source these parts ourselves so that we can trust the integrity of the parts we get. I actually travelled to China myself and bought parts to last us for six months, but unfortunately, there were delays and bottlenecks at the Customs. What happened was that we had lots of buses we needed to fix with parts. While we waited for the stock to arrive, we didn’t have parts to fix them. But the parts came in a couple of months ago, and since then, the number of our buses out there have been increasing. By end of this month (December 2018), we should have minimum of 300 buses out daily. By end of January, we should have 360 buses out daily to alleviate and ameliorate the issues they are having. Even now, commuters are seeing the difference. Our service, I agree with you, is not where it is supposed to be, but we are working round the clock, seven days a week, to try and make sure the service improves. We want to ensure that nobody waits more than 10 to 15 minutes to board our buses but the system costs money. We must make money and we are not making money; the board may decide things like, “why not remove the air conditioning system to reduce cost of fuelling?” or “why don’t you stop washing the buses everyday so as to reduce cost?” We may eventually get to that but I don’t want us to get to that. That is why I keep talking about the challenges.
BRT lane violation
It affects us. Traffic in Lagos affects us. First of all, there are lots of breaks in between the dedicated lanes. When a BRT bus gets to such points, it means the driver needs to go into the traffic where everyone else is. Like this December, traffic is high all over Lagos and it affects us. All the major roads are blocked. Everybody comes to our corridor. And what they do that drives me crazy is that, not only do they come into the corridor, they now go to the other side and block the incoming buses also. It is part of our lawlessness and indiscipline in this country. A journey that is supposed to take 45 minutes or an hour, takes two and half hours. And people keep blaming Primero and I keep telling them that Primero is not a law enforcement agency. I cannot arrest anybody because I am a civilian too. I can only complain. I have been complaining. However, I want to thank LASTMA and the police for working with us, trying to make sure that all is well.
Assembling BRT buses in Nigeria
We have signed an MoU (Memorandum of Understanding) with Yutong, which is the number one bus manufacturer in the world. This is the first time Yutong will invest outside China. What they normally do is to tell you that it is okay, “we send bus to you and you pay us.” But we were able to convince them. So they are coming as partners in business and they are putting their own money in the scheme also. The plant will be in Epe. We have already had the plan.
We planned that the 350 buses that would be used in Abule Egba will be assembled locally. And almost additional buses that we will bring in must be assembled locally. And the good thing about these set of buses is that they will use gas instead of diesel because we are trying to go to the next level. We equally have to care about our environment. We don’t think using buses with diesel engines are the way forward. So, the next set of buses will be assembled locally, and will be using CNG (compressed natural gas).
Wi-Fi, cashless ticketing
The Wi-Fi is just to make commuters experience better service while they are in traffic. They can work and surf the net. They can enjoy themselves right in the traffic. And the card (payment system) makes planning easier because with it, you can plan what you need for the month. It makes life easier and for us, it gives us revenue assurance. It reduces the amount of cash circulating in the system. I don’t care what you do. If cash is circulating, people will always find a way to create leakages. With cards, we block the leakages and it gives us our revenue assurance.
Fleet size
We have 434. However, there is nowhere in the world where you have 434 buses and put all of them on the road. This is because some of then would be in for maintenance, involved in accident and different other reasons. So if you can do about 80 per cent of your fleet, you are doing a very good job. We have our own maintenance design. It is because of that that we realised that the parts we are buying locally are not of good quality. That was why we went to buy the parts ourselves. We have a very robust maintenance department that employs over 100 people. There is one in Ikorodu, and there is another at Ojota. As we go to Abule Egba, we will set up another maintenance yard there if Lagos State approves it. We learnt a lot in the last three years and I believe that puts us on a good stead for Abule Egba-Oshodi corridor.
Expansion plan
Like I told you, we have already submitted our bid for the Abule Egba-Oshodi corridor. We are waiting for Lagos State to approve it. If it is approved, we will bring another 350 buses. To also serve our bid to operate the buses that Lagos State brought in for their buses reform, if they approve that also, we will get more buses. My dream is that by this time next year, Primero will have about 1,200 or 1,300 buses that we are managing. Eventually, my dream is that I want Primero to have at least minimum of 2,000 buses taking up one million passengers daily all over Lagos. That is my goal. That is my dream.