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New order on the buses

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Page context: Home > Transport International Magazine > Issue 27 April 2007 > New order on the buses

A World Bank-supported restructuring plan is bringing bus services back into public ownership in Ghana. Brendan Martin reports on a potentially exciting, but also highly challenging development for the unions

A World Bank-supported restructuring plan is bringing bus services back into public ownership in Ghana. Brendan Martin reports on a potentially exciting, but also highly challenging development for the unions

Ghana’s public transport system was deregulated, with the encouragement of the World Bank, in the 1990s. Since then, transport provision has increased but the cities have had to contend with worsened road congestion, a deteriorating urban environment, and big problems with user safety and security.

The private mini-buses in the capital Accra operate on an opportunistic basis, without any schedule, route licensing or service standards. The licence gives them permission to operate anywhere, resulting in their concentration along the main high-density corridors. According to a World Bank report of 2004, “This situation has particularly worsened the travel environment for the poor, who live in outlying areas and depend most on public transport.”

The problems have been made much worse by Accra’s rapid population expansion (currently 4.4 per cent per annum), which, the World Bank notes, is leading to “heavy congestion, particularly during the peak periods, low vehicle utilisation, weak implementation of traffic management measures, inadequate facilities for pedestrians and bicyclists, poor road safety arrangements and high accident rates.”

The government of Ghana has responded to these problems by recreating a publicly owned bus service, Metro Mass Transit (MMT). Now the World Bank has decided to support this with a project to create an integrated rapid transit bus service in Accra, building in priority road measures and facilities to feed in pedestrians and cyclists en route.

“The World Bank is not only actively supporting Ghana’s re-establishment of a publicly owned urban bus service, but also assisting Ghana in bringing the existing private operators into a regulated, publicly run urban system”

Evidently, the World Bank has ended its damaging commitment to the liberalisation of urban road passenger services. Now it is not only actively supporting Ghana’s re-establishment of a publicly owned urban bus service, but also assisting Ghana in bringing the existing private operators into a regulated, publicly run urban system.

However, evidence from road transport unions obtained during a recent field and desk research programme for the ITF suggests that the new policies are having mixed effects on transport workers, and that a more systematic approach to consulting them is needed.

Jobs and working conditions

The most disadvantaged workers appear to be those who, following liberalisation, went into the informal sector, where overloading and poor vehicle maintenance are endemic. The picture varies in the larger private bus companies that entered the market, but in the companies whose workers were represented there appear to be few complaints.

History of public transportation in Ghana

Following its independence in 1957, Ghana established a public bus transport service through a publicly owned company called the Omnibus Service Authority (OSA). Fares were held down to enable the service to be affordable, but this also undermined the service’s revenue, a problem that became acute once Ghana entered into a Economic Recovery Programme (ERP) under IMF/World Bank guidance in the 1980s.

This was because, like structural adjustment programmes imposed by the IMF and World Bank throughout Africa and the rest of the global South at that time, in Ghana the programme involved big cuts in public subsidies and services.

According to a World Bank report, in the context of public spending cuts as part of the overall IMF/World Bank structural adjustment programme in the 1980s, the OSA was unable to buy spare parts or new buses, but believing these shortages to be temporary was reluctant to carry out retrenchments. This led to an ever-growing ratio of personnel to operational buses.

In response to the declining services and growing demand, Ghana’s government partly deregulated the sector in the early 1990s, encouraging the private sector to participate in the provision of bus services, although their fares were also government-controlled.

Later OSA was privatised and fare regulations for inter-city services deregulated, although fares regulation, through the Road Transport Co-ordinating Council, remains for taxi services in Accra. Regulations covering such matters as driver fatigue remain for intercity services, but are not properly enforced, putting those companies that treat their staff properly and safely at a cost disadvantage.

As a result, according to the World Bank, which encouraged the deregulation in the 1990s: “The fare-controlled private sector bus operators entered the market to fill in the deficit in public service but they found it profitable to operate only at high load factors associated with a low quality of service.

Investment in new large vehicles could not be sustained in this regime. The residual deficit in services was filled by taxis operating outside the fare control, contributing to a proliferation of small vehicles.

At the Intercity company, which emerged from the privatisation of the Omnibus Service Authority in 2000 (see box), it was reported by union representatives that 400 jobs were lost at that time. According to numbers obtained from the company, there were at one time as many as 2,000 workers employed by OSA, but the workforce had dwindled to no more than 800 at the time of the sell-off. By March 2006, there were 596.

For the remaining workforce there were some reductions in terms and conditions. For example, the number of leave days was reduced from 34 to 28. However, salaries are reported to have increased substantially and health and safety arrangements have shown “considerable improvements”. In addition, some conditions have improved; for example, medical insurance now covers staff 24 hours a day, not only when they are at work.

According to union representatives at a seminar convened late last year by the ITF and the Friedrich Ebert Stiftung foundation: “Before privatisation, there was a lot of inefficiency and waste of money. There was also political interference. The output of the workers was weak. Now goals are set and you have to attain them.

Recruitment procedures are better and people are appointed on the basis of competence.”

Positive approach to unions

In interviews conducted after the seminar, management representatives at Intercity reported that the company struggles to find money for training and to compete with other companies that have lower overheads – because they have up to three times fewer drivers and do not observe rules about drivers’ working hours.

“We are perceived as higher quality, and the market trusts us,” one manager said. “But we have low capacity, and the passengers have to go somewhere. We have withdrawn from so many routes. The returns are too low, for example, on Kumasi, Wa and Takoradi (routes from Accra). The informal sector undercuts us, and they are using buses we used to run, that we sold to them.”

The workforce is represented by the General Transport, Petroleum and Chemical Workers’ Union, which is seen by management as playing a positive role. One senior manager commented:

“The unions are doing very well. They have moved away from their militant stand of yesteryear, and now understand the issue. They understand their survival is dependent on the business’s survival. Union activities were nearly killed in the transition from public to private, when most of the union people were victimised. Pressure from unions has restored the situation. They are the workers, so what they say must be taken very seriously.”

Consequently, in meeting the challenges faced by competition from the informal sector, dialogue is seen as important: “We need to cut costs: the ideal is to sit down with the union, discuss the situation as it is, get their views and work out mutual benefits to sustain the organisation.”

The union argues that the major savings should come from a better approach to procurement. It believes a lot of money is being wasted by buying buses cheaply from too many foreign sources, and that the company cannot maintain spares supplies for all of them.

Problems with public company

In the Kingdom private bus company, unions report a “steady decline” in the size of the workforce (largely related to the establishment of the Metro Mass Transit – MMT), but they report levels of pay to be better here than in other transport companies. They appear satisfied with health and safety arrangements, and there is regular training for drivers, although not for other staff.

Sadly, union representatives report that at MMT the health and safety arrangements are less good, despite it being a publicly owned company, and it is a “poor employer, not union-friendly”, and provides inadequate training.

Another problem is that the government is now once again both a service provider and the sector’s regulator. In interviews, representatives of the national centre-affiliated Ghana Private Road Transport Union (GPRTU), which represents some 60,000 self-employed workers in the taxi and small bus services, emphasise what they see as the government’s conflict of interest, for example over regulation of fares.

However one leader acknowledged that his members could not increase fares much in any case because passengers would not be able to afford more:
“We don’t put up fares when the gas price increases, which happened only last month. Gas accounts for 35 per cent of our costs. Our profit margins are very small and we cannot replace our vehicles. If we charged fares to sustain our businesses, they would be two or three times higher. We need government grants to buy new vehicles. Ninety per cent of our members can’t send their children to school.”

GPRTU leaders see the publicly owned MMT as undercutting them on profitable routes while neglecting less profitable ones. Ironically, that is exactly the charge that has often been levelled at private operators entering liberalised markets.
“MMT has no history and knowledge of bus transport. They only go to a few areas. They don’t go to where roads are bad. So they avoid our high maintenance costs.

And they won’t carry foodstuffs,” one GPRTU leader told us. The last point may appear trivial, but as many poor people do carry foodstuffs, and even livestock, on public transport, it is an important issue in relation to passenger transport and poverty.

Union struggles

The picture that emerges is of unions attempting simultaneously to influence the direction of the restructuring of their sectors while dealing with the effects of restructuring. This is not an easy combination for any union to accomplish, and is much harder with the severely limited capacity available to unions in developing countries.

Our research into all Ghana’s transport sectors (see footnote) shows that public employers have not necessarily been better employers or service providers, and private employers have not necessarily been more efficient or effective. These findings challenge assumptions often made, in the former case, by union organisations and, in the latter, by the World Bank and other international institutions.

It does seem clear that social dialogue tends to have overall beneficial effects, while its absence tends to make negative impacts on workers and transport services more likely. Of course the prerequisite is that unions have the capacity and genuine independence they need to reap benefits from such dialogue for the workers they represent.

It is also vital for government and international institutions to commit to policies to improve the way in which transport services operate.

The unions, the transport ministry and the World Bank all now have an important new opportunity to work together to promote the best possible outcomes of the new World Bank project for rapid transit bus services.

The integrated public transport system envisaged for Accra is an exciting development. However it requires not only a participatory approach to its development, but also that the service providers themselves are of sufficient quality. There is a clear need for personnel development and training that involves and builds the capacity of the workforce.

Other issues also need to be addressed with urgency in MMT and other companies. In particular, a more rational approach to procurement is required, so that each service provider can ensure it can maintain its fleet more effectively.

The World Bank project envisages establishing links between Accra and London in planning the development of the new integrated system. Consideration should be given to arranging parallel links between the unions in the two cities, so that the unions in Ghana are well informed about how the system works in London, and can aim to learn from the experience of their colleagues there.

This article is an edited extract of Brendan Martin’s report Labour Restructuring in Ghana, which analyses neo-liberal transport reforms and trade union alternatives in all transport sectors. It is the report of an ITF field research project, supported by the Friedrich-Ebert-Stiftung (FES) foundation in Ghana.

Brendan Martin is coordinating an ITF project to develop trade union alternatives to neoliberal transport restructuring.

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Issue 27 April 2007

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