16.4Outreach to Impacted Operators

16.4.1Industry Engagement in Bogotá, Colombia

In Bogotá’s TransMilenio, the transition process began in 1998. Mayor Peñalosa hired a businessman named Ignacio de Guzman to learn what he could about the structure of the bus owners and the bus enterprise owners. He established a task force that approached the heads of several of these associations to explain the new BRT system.

De Guzman’s research indicated that there were some eleven affected associations active in the field. Some of them were drivers’ unions, but the most important were five associated enterprise unions:

Source: Bocarejo, Pablo. Ingenieros Consultores - EUROESTUDIOS S.A. – ETT S.A., Mejoramiento del Sistema de Transporte Público Complementario a TransMilenio de Bogotá Informe Final.

The associations and their members were invited to discuss the initiative with the City of Bogotá. In these early meetings, virtually all of the associations rejected the idea of TransMilenio and the public transport reform process that it involved. They argued that 25,000 families would be badly affected and some transport companies would disappear. They felt that smaller companies and collectives would be particularly hard hit. The mayor took a pretty hard line, and said that the project was going to go ahead with or without them, and that if they resisted the project or caused any civil disobedience they would be disqualified from bidding.

Most of the power in the industry was held by a small number of large bus enterprises that controlled the licenses in the TransMilenio Phase 1 corridors. These enterprises were owned by wealthy families, and there was generational change taking place in the control of these companies. While the patriarchs of the families were resistant to change, a subgroup of the younger generation of leaders understood the potential of becoming something more. This subgroup of better informed owners of transport enterprises understood faster than the others that the tendering system might offer them some advantages in the long run. While it meant that part of their current market was at risk, it also gave them a chance to move into markets currently closed to them. They helped convince the others that competitive tendering would be fine if the tender were written in a way which heavily weighted “experience in the corridors.” Under these conditions, many impacted enterprises agreed to participate in a managed tender. Those that agreed to participate were given voice in the way in which the tender was structured, and those that refused were excluded.

The chief executive of TransMilenio, Edgar Sandoval, carefully controlled the information released to the impacted owners. Information about the project was released only once the government had made clear decisions. He believed in negotiating with the industry from a position of strength, and he always tried to have more information than the industry about the operational costs. With the existing industry, he built public discontent through regular releases to the media of the many problems with the existing public transport services. He always got the backing of the mayor on key decisions, and he never wavered from the position that the industry would be forced to competitively bid and meet strict minimum qualification criteria to win the right to become a BRT operator. Though eventually TransMilenio operations came under criticism for declining performance, TransMilenio operations were for years considered the gold standard in BRT service provision.

16.4.2Industry Engagement in Johannesburg, South Africa

Johannesburg and Cape Town were the first two South African cities to implement BRT corridors, both of them managing to incorporate existing informal operators. In South Africa these are the minibus-taxis, mainly sixteen-seaters, that began competing with the subsidized bus and passenger rail industry in the 1970s, and which presently command about 60 percent of the modal share in the country. In Cape Town, they have a 29 percent share and in Johannesburg a 72 percent share of the public transport market. They are owned by numerous individual owners, the majority owning one or two taxis only, who employ drivers that provide the owners with a target income daily or weekly. They are organized into route-based taxi associations, which play a strong role in controlling new entrants on the routes, through high joining fees, patrol vehicles, an informal sticker system controlling the right to use city-owned facilities, and at times intimidation and violence. Both cities also have formal private bus companies operating services in terms of contracts with the provincial sphere of government, while Johannesburg also has a city-owned bus company called Metrobus.

Johannesburg engaged its existing operators from the outset. It gave up on the idea of competitive bidding of the contracts fairly early on, which perhaps reduced the risk of social unrest but increased the operating cost and perhaps compromised some elements of corporate formation.

There were some thirty route-based taxi associations active on daily routes in the city (as well as numerous long-distance groupings) that belong to one of two umbrella bodies in the city—called Top Six Taxi Management and the Greater Johannesburg Regional Taxi Council (GJRTC). (These umbrella bodies are each affiliated with provincial and national structures as well.) The leaders of each of these, as well as of the two main bus companies active in the city, were initially cultivated by the BRT project team, and then invited to join the city’s initial BRT study tour to South America, in August 2006, when BRT was being considered. Once Johannesburg made a decision to plan and build BRT, which it called Rea Vaya, the participants in these study tours became proponents for the project within the minibus taxi industry. The city held in-depth discussions with these “early adopters” among the minibus-taxi industry representatives on how to structure their participation in the BRT project. It settled on a business model that would make affected taxi and bus operators shareholders in the VOC that would operate the first Phase 1A of Rea Vaya. Initial discussions were held separately with the two umbrella bodies, but in February 2007 the two bodies agreed to represent the industry as one entity. They set up a steering committee, made up of the executives of Top Six and the GJRTC, chaired respectively by the two structures’ leaders, Sicelo Mabaso and Eric Motshwane, respectively. These bodies each signed memoranda of understanding with the City of Johannesburg, setting out the mechanisms for cooperation and liaison (another was signed with the city’s bus operators the following year). The TSC was given office space and meeting facilities alongside the BRT project offices. In addition, the city paid a full-time technical adviser chosen by the TSC, and office support staff to assist the TSC. Additionally, it paid an independent facilitator to manage the engagement process.

A long period of consultation, debate, information sharing, and discussion took place from 2007 to 2009 among city officials and industry leaders, steered by the facilitator appointed by the city. Apart from the TSC, other structures were also convened for these engagements, including a committee of four leaders each from eighteen taxi associations that would be affected by the first full phase of Rea Vaya. An even larger structure was sometimes convened made up of the executive committee members of all eighteen associations. Roadshows were embarked upon to explain the proposed rollout of BRT to individual taxi association members. The engagement included raising awareness of BRT, education about BRT, change management workshops, engagement on infrastructure rollout and taxi routing during construction, and communication about affected routes and vehicles in the various proposed phases.

This period was used highly effectively by the industry to secure reassurances that it would not be harmed by the BRT project or be left worse off by it in terms of profits. The taxi industry held several conferences and workshops where resolutions were taken to be part of the project and to support it. Additionally, they insisted on having 100 percent stake in operations, a share of other contracts, and various other measures to ensure the industry’s interests were looked after (McCaul C. and Ntuli S., 2011; City of Johannesburg, 2011, pp. 29–31).

Significant reassurances were also secured by the minibus-taxi industry at the national level, which were binding on all city BRT projects in the country. In addition to local engagement, a significant amount of engagement about BRT was taking place separately at the national level, between the national taxi umbrella bodies and the national department of transport. These talks, as well as several protest actions and strikes by minibus-taxi operators across the country, resulted in public undertakings and guarantees by the minister of transport that there would be no loss of legitimate profits and jobs among operators and workers who moved into the BRT systems. He also expressed the government’s willingness to explore legal options to make the long-term contracts renewable subject to good performance.

The city, for its part, made clear its proposals that, in exchange for participation as operators of the new system, existing operators would need to withdraw their vehicles from BRT routes. The Phase 1 Operational Plan detailed which routes should be “cancelled,” diverted, or reduced.

After the Phase 1A service design was revised and finalized in August 2008, the process concentrated on the operators who would be directly affected by it—namely taxi operators on routes of ten taxi associations. From early 2009 the city expanded the technical support it was giving to representatives of the taxi industry, and paid for additional technical advisers of their choosing. In addition to the transportation engineer supporting them full-time, the city paid for a lawyer, a bus operations expert, and a management and business adviser. It also funded all the meetings, workshops, and breakaway sessions required in the engagements.

To ensure that all affected operators on the Phase 1A-affected routes had the opportunity to be involved, the city placed advertisements listing the Phase 1A routes and the ten associations it believed were affected, and it asked individual operators to come forward to register their interest in participation. It also wrote letters to the affected taxi associations in this regard. A process took place by which these registered operators nominated representatives in negotiations—either existing leaders in their associations or other candidates.

Despite these extensive engagement and communication efforts, the BRT project divided the industry in Johannesburg, and those opposed to the project organized themselves into a body called UTAF (United Taxi Association Forum). The planning and initial implementation periods were characterized by protests and strikes, intimidation of participants, violent attacks on participants, and violent attacks on the system itself in 2009 and 2010.

16.4.3Industry Engagement in Cape Town, South Africa

Cape Town managed interactions with the affected minibus taxi industry somewhat differently. It held out the possibility of having a competitive bid longer, and retained the concept of having multiple operators on the Phase 1A corridor.

The operators impacted by Phase 1A of the Cape Town BRT system were of three types:

• Members of the Peninsula Taxi Association, a well-organized, sophisticated, and diverse association heavily dominant in the Cape Town city center;
• Golden Arrow, a bus company under contract to the Western Cape Province, largely under white ownership;
• Smaller associations.

The process of transitioning the existing public transport industry into a new BRT business model was sensitive and required careful planning. Several months of engagement with the industry were necessary before a formal process of transition began. During this time, a series of meetings was convened with members, at many levels, from associations directly affected by the new system as well as with members of the broader industry. Additionally, pamphlets and other forms of media were distributed as a way of disseminating as much information as possible, and as broadly as possible. In early December 2008, a study tour to South America was arranged where representatives of the taxi and scheduled bus industries and city officials visited three cities in South America where BRT systems have successfully been introduced. Many of the taxi and bus industry organizations affected by Phase 1A participated, with the intention of briefing the remaining members of these organizations regarding lessons learned. One of the major taxi associations, the National Taxi Alliance, refused to participate.

The first formal engagements between the City of Cape Town (CoCT) and the existing industry took place in November 2008. The first meetings were intended to be informational meetings geared to the directly affected industry. As such, only members of the directly affected industry—minibus taxi and bus—were invited. But, in addition to the invitees from the directly affected industry, members of the broader industry attended uninvited. The CoCT made the quick decision not to turn anyone away. But this caused friction between the directly affected industry and the broader industry and the meeting ended in a stalemate.

Meetings were also convened with the Western Cape Provincial Taxi Council (WCPTC) representing the broader minibus taxi industry. This council has been positive about the IRT. At an IRT Summit on November 27, 2008, two representatives from all minibus taxi associations in the Western Cape were invited to hear a presentation on IRT and to discuss the project. Further, the CoCT met with a wide range of interest groups within the broader transport industry, such as the Touchdown Metered Taxi Association (servicing the airport), small bus operators, and the Metered Taxi Council and taxi associations operating outside Phase 1A, or not directly affected by it. In addition, the CoCT started meetings with the affected private bus operator, Golden Arrow.

The head of the Peninsula Taxi Association (PTA) was generally supportive of the BRT system plans, and was rapidly able to convert his association into a corporate entity. Golden Arrow already existed as a corporation, and was also readily capable of providing BRT services. They were conditionally supportive.

One group of associations, however, organized in opposition to the project. A grouping split from the WCPTC in December 2008, and called itself the National Taxi Alliance (NTA). Though the opposition of the national NTA began to soften as the prospects of success in Johannesburg improved, the local associations within the NTA-Western Cape umbrella that have been identified as part of the affected industry remained opposed to the IRT system longer. These include DuNoon Taxi Association (DTA), Ysterplaat Taxi Association (YTA), Maitland Taxi Association (MATA), and Devils Peak Vredehoek Taxi Association (DPVTA).

The NTA ran two work stoppages, one in December and another during 2009. The city met numerous times with the NTA, without being able to resolve their differences. NTA’s position, however, was not that strong, as the majority of the impacted routes were under the control of the PTA, and there was always a significant threat that the city would simply turn over operations to Golden Arrow and the PTA. Finally, with the direct intervention of Mayor Zille in March 2009, there was a successful meeting with the whole minibus taxi industry where more of the industry decided to support the project.

The industry was asked to select a steering committee, and to form other committees, and from that time forward regular meetings were held between the city and the various committees, particularly with the steering committee.

Cape Town decided to write down all of the information that it was in a position to share with the impacted industry in a living document called the Vehicle Operator Prospectus. This document, drafted initially by the city’s business planning consultants, was the basis of formal discussions, and negotiations and workshops resulted in significant changes to its content before the next formal release of the prospectus in August 2009. Other issues worked out in the meetings were how to handle threats on the lives of the attendees.

Eventually, due to internal cleavages within the industry, Cape Town decided to organize the services into three separate contracts: one led by PTA, one by Golden Arrow, and the third led by the smaller associations. As negotiations were not concluded in time for the 2010 World Cup, an interim operation was put into place with the company created by PTA. This company operated during the World Cup, and put pressure on the other companies to conclude their contracts.

16.4.4Industry Engagement in Dar es Salaam, Tanzania

In Dar es Salaam, the existing minibus taxi, or daladala, owners that would be affected by the DART BRT system, were less well organized than in most other cities developing BRT systems. Initially, there was only one association of daladala owners, DARCOBOA. The de facto head of this association, Sabri Mabruki, owned a fleet of vehicles mostly concentrated on a parallel corridor, Uhuru Road, that were only indirectly affected by the BRT system. The owners association only represented part of the daladala industry affected by Phase 1. Sabri Mabruki was included in most of the DART visits to other BRT systems in Latin America and was in contact with the BRT operators in South Africa as well. Route licenses were reasonably well organized in Dar by a national government agency called SUMATRA. Most of the owners were not active participants in the business, and they simply leased their vehicles to drivers for a flat rate. As such, the drivers had relatively more power and the owners relatively less in Dar than in other places.

DARCOBOA’s leadership, and some of its members were informed about the DART BRT project since the earliest plans for the project, and were always told that they would be given an opportunity to become the operators of the new system. Information, however, did not pass to many of the affected owners who were not well organized or easy to identify. The project was frequently delayed, and information flow between the DART agency and DARCOBOA was infrequent. Many project documents were prepared by the BRT consultants, but few of these documents were ratified formally by the government, and few of them were shared with the impacted industry. The impacted industry operated under relatively short-term contracts, and as such, had no legal rights to compensation.

The business plan developed by the original project team proposed having a competitive tender where two vehicle operating companies would be chosen to operate the BRT, both run by new consortia composed of international operators in joint venture with impacted and nonimpacted local owners. The World Bank loan, which paid for the infrastructure, stipulated that the impacted owners be given preferential treatment with respect to operating the BRT system. It also required competitive tendering of the operations.

The idea of having multiple operators was not supported by DARCOBOA, which wanted one big consortium to operate 100 percent of the BRT system in joint venture with a single international operator. The World Bank and its consultants also felt a single operator contract, more typical of the European public transport systems, would be easier to manage. The World Bank’s consultants felt that the trunk BRT routes should be operated by an international operator selected through international tender. And they wanted this to happen with no involvement of the daladala owners, who would be given the right to operate the feeder routes and possibly other forms of compensation to exit the industry. The government of Tanzania never took a position with respect to these matters, leaving the daladala owners and potential investors unsure of the government’s position.

Complicating matters, licensing of public transport routes was handled by SUMATRA, which is under the ministry of transport, while the DART agency is under the ministry of regional and local government, reporting to different ministries. Communication with affected industry was spotty. There was an initial meeting held with over two hundred daladala owners in the fall of 2013, as the infrastructure began to progress. The meeting included those with operations on the planned BRT corridor and those with operations unaffected by Phase 1. The Ministerial Advisory Board, under pressure from Darcoboa, abolished the distinction between “affected” and “unaffected” daladala operators.

At this meeting, the owners then organized themselves into three stakeholder groups, Darcoboa, UWADAR, and another group of otherwise unaffiliated daladala owners. From these, six individuals from a working group of representatives were selected with whom the regional commissioner was to continue to have more detailed discussions. There was little formal communication again until May 2014. Part of the delay was a result of cumbersome World Bank procurement rules, and by this time a “transaction adviser,” the Rebel Group, had been hired, as had a local expert. At this meeting, about 35 percent of the impacted operators showed up and registered as impacted owners or drivers. About 85 percent said they wanted to have shares in the DART operating company, and only a few were looking for compensation to exit the industry.

Then, in May 2014, there was a “road show” where potential bidders were invited to visit the DART BRT infrastructure. The information given to the potential international investors was prepared by the World Bank consultants, the Rebel Group, and it indicated that one company would be selected to operate the entire BRT system, including the bus operations, the fare system, and the operational control system. There was no mention of any requirement to include impacted daladala owners. As a result, the representative of Darcoboa renounced the meeting, and he was supported by the mayor of Dar es Salaam, leaving many of the investors unsure of government policy.

Of the international visitors who participated, only one bus operator, Gursel from Turkey, participated, and the firm does not operate a BRT service but an intercity bus service. Some fare system operators also participated, as did some bus manufacturers and some banks. As the formal tendering process would take more than two years to complete, well after the infrastructure was to be completed and well after the national elections, DART was in a position of needing to find an interim operator.

Meanwhile, the moribund government-owned bus operator, UDA, that had the right to operate many of the routes affected by the DART BRT, but which had not operated any routes for many years, was suddenly resurrected. As the DART corridor moved toward completion, a powerful private investor purchased a majority share of UDA and immediately began operating vehicles in DART affected corridors. This company had the rights to operate given to it by the ministry of transport.

By August 2015, UWADAR, DARCOBOA, and UDA’s new private owner (Shirika la Usufiri Dar es Salaam Ltd.), with the endorsement of the DART Agency, signed an agreement. This agreement stipulated that the two daladala owner associations would compensate impacted owners on the BRT corridor in exchange for the right to buy shares in UDA and have representatives on its board. UDA in turn promised not to sign any joint venture with an international company to operate BRT operations on the BRT corridor. Since UDA still held the legal rights to operate vehicles on the corridor, this agreement seems to have legally foreclosed vehicle operations by any foreign company.

As of October 2015, this company had procured 138 vehicles to initiate BRT operations. As of this writing the vehicles were still stuck in the port and operations had yet to commence despite the presidential elections that returned the ruling party to power in November 2015 in a relatively closely contested election.

16.4.5Industry Engagement in Lagos, Nigeria

LAMATA, the Lagos transport authority, engaged extensively with future users, communities, and existing operators in the design of the BRT-Lite system. There was a significant publicity effort and community outreach, as well as mobilization of key community supporters and opinion-makers. Design and operational decisions were workshopped with stakeholders and the informal transport sector leadership, NURTW, became convinced to change its business model to become more efficient and sustainable. They also convinced their membership of this. Study trips to South America were undertaken in 2004 and 2006. This long process of consultation seemed to have ensured widespread buy-in.