Money is rolling in transport sector


Written by Louise Umutoni
If you’ve been wondering how all these newly-created transport companies can still be profitable, the answer is simpleand obvious: there is a big market. Of late a lot of money has been invested in transport by private entrepreneurs, both in intra- and inter-city busses.

Horizon: One of the inter-city busses that take Kigali-Butare route.In Kigali city centre, however, Atraco Town Service appears to be at the forefront, with Onatracaom following closely behind. Other transport agencies which normally traveled up-country, are now also taking on town services as well.
A good example is New Yahoo, which in the past only served the Kigali-Burundi route, but is now also offering inner-city taxi services. They are not the only ones doing this, and yet look how many passengers still fight for taxis at the Rubangura bus stop every evening.
However the biggest number of transport agencies still travel up-country, as it gives them even bigger benefits as many people travel throughout the country. There has apparently been such a boom in inter-city travel that you find up to five transport agencies serving for example the Kigali-Butare route with Volcano, Horizon, Sotra Tours, Belvedere Lines and of course Atraco all vying for travelers.
Some like Atraco basically cover the whole country, but others like Virunga Express, Horizon Express, Karisimbi Express and Volcano deal with particular regions such as Kigali-Butare, Kigali-Ruhengeri and Kigali-Gisenyi. This may cause heavy competition when several companies focus on one particular area.
Olivier Nizeyimana, the owner of Volcano which covers the Kigali-Butare route, says that competition is not a threat but rather a way to improve on services to the people.
“The only way we can keep our customers is to offer the best services, so that they don’t want to go to another company. For us, it’s not about who charges more, we have an association of travel agencies that do the Kigali-Butare route that sets the prices,” Nizeyimana explains. Every agency that travels this route charges Frw 1500, and the difference is in the services offered like comfort, security and travel time.
However, a few months back chaos broke out when some transporters on this route decided unilaterally to lower their prices from Frw 1500 to Frw 1300, forcing others to follow suit to keep their customers. Sotra Tours, for example, went as low as Frw 1000, which tripled its number of customers.
Nizeyimana points out that this was before the association was formed, and there were no rules to govern these agencies. “I have been in the transport business for many years, creating Volcano in 1999, and I have realized that this is a very profitable business but if there are no rules governing the agencies, you could make losses.”
Joseph Nsabimana of Virunga Express that travels the Kigali-Ruhengeri route, says that for them an association has always been in place charging a price of Frw 1000 that was acceptable for both the travelers and the agencies.
“We also have many competitors but we have the biggest clientele because our travel frequency, we travel every 30 minutes which is rare because you need many busses and drivers,” Nsabimana says.
He adds however that the more the transport agencies, the smaller the clientele. “We started out as the only transport company on this route, but now we have to share it with four competitors.”
When asked if there are real benefits, Volcano’s Nizeyimana said that they are definitely there, and this is why so many people are investing in the business. He however said that the price that government set for all travel agencies going to Butare has not yet been reached.
“Government set Frw 1700 as the price we should charge in 2002, but up to date we are still at 1500frw, and yet prices for fuel and other commodities increase every day, so over the years our profits reduce,” he complains.
However, Rafael Rukerikibaye, the owner of ‘new kid on the block’ Belvedere Lines, which started last April, is only smiling. For them there are no losses, traveling to Gisenyi and Burundi.
“We deal with business people and we charge only Frw 2000 to Gisenyi and Frw 5000 to Burundi like all other agencies,” says Felix Karirangabo the manager. “Our busses are very comfortable and this is why we have so many customers, despite that fact that we just started and travel only 4 times a day. In fact, the demand is far bigger than what we can handle.”