Windhoek spends N$70m on buses, earns back N$10m

The City of Windhoek spends about N$70 million annually to operate its municipal bus service but recovers only N$7 million to N$10 million, leaving the municipality to absorb a funding gap of about N$60 million each year.

City chief executive officer Moses Matyayi says the gap is covered through cross-subsidisation from other municipal resources, a situation he says is unsustainable without financial support from central government.

“We only have buses in Windhoek. And the limitation that we have is that, for us, in terms of governance prudence, it is a cost that we cannot be able to sustain,” Matyayi said during an interview with Nampa's Behind the Wheel.

Asked about revenue generated by the buses, Matyayi said the cost of running the service vastly exceeds the money collected from passengers.

“We spend N$70 million on these buses just to be able to operate that specific area. Our investment is about N$70 million, yes, on an annual basis,” he said.

“And we only receive from whatever little that we have, what you're actually mentioning, N$7 [million] to about N$10 million. But that's not sustainable.”

The figures mean the bus operation recovers only about 10% to 14% of its annual operating expenditure through the revenue Matyayi cited, leaving between N$60 million and N$63 million to be funded from elsewhere.

Matyayi said the municipality currently makes up the shortfall by cross-subsidising public transport with money that could otherwise support other municipal activities.

“Of course, where do we get the difference of N$60 million to cover for public transport? We need to get it somewhere. And somebody must pay for that,” he told Nampa.

Matyayi argues that central government should subsidise the service because public transport performs a social function and cannot presently operate on a cost-recovery basis.

“There is a need for government to come in in order for them to have goodwill for the people to actually subsidise that difference,” he said.“There is a need for City of Windhoek to be subsidised.”

Poorest pay highest price

According to Matyayi, the financial pressure extends beyond buses because money used to keep loss-making but essential services running cannot simultaneously be spent on development priorities such as serviced land.

He warned that without subsidies, the cost ultimately affects residents, particularly lower-income households.

“One is that life will continue to be expensive for the residents of Windhoek, especially those that are within the lowest echelons of the income-earning category,” Matyayi warned.

“Secondly, the funds that would have actually also helped to alleviate the burden in terms of other developmental activity will now have to be channelled to cross-subsidise the services that are needed.”

System under pressure

Matyayi placed the financial problem within the wider challenge of providing public transport to a rapidly expanding city.

He said Windhoek's public transport system historically developed mainly to move lower-income workers, including domestic workers and gardeners, between residential areas and places of employment, but the system has not evolved sufficiently as the city has expanded.

The City has previously participated in initiatives to develop an urban transport master plan with government institutions and development partners, but Matyayi said implementation remains a challenge.

“It’s one of the biggest challenges that we currently have,” he said.

Windhoek's population growth compounds the pressure. Matyayi said the capital has gained about 12 000 residents annually over the past decade, and population growth has outstripped the City's ability to provide infrastructure and services.

That expansion increases demand not only for transport, but also for roads, water, electricity and serviced land.

For the bus service, however, Matyayi said the immediate problem remains the gap between what passengers can reasonably be charged and what it costs the municipality to provide the service.

The City is required to provide public transport, he said, but recovering the full cost from users is currently unrealistic.

“It’s a public transport. It’s a service that we need to provide. Unfortunately, we are supposed to provide it at a cost-recovery basis, but at the moment that is not feasible,” Matyayi said.

“And it’s not going to be feasible in the nearest future if we do not get government support.”