Government scraps Zupco service contract

THE Government has terminated the service contract with the Zimbabwe United Passenger Company (Zupco) to provide urban mass transport which was gobbling US$6 million a month, saying the company has been subsidised enough and must be running profitably and efficiently without hiring buses.

Zupco has in turn terminated contracts with the private players that were operating under its franchise. In a correspondence seen by Sunday News, Permanent Secretary in the Ministry of Finance, Economic Development, and Investment Promotion Mr George Guvamatanga informed the Ministry of Local Government and Public Works about the development.

"Given the foregoing intervention by Treasury and mindful of the need to create fiscal space for the procurement of an additional fleet of buses from savings on the hire of private buses, your ministry is hereby advised of the termination of the financial support for hire of private buses by Zupco, with effect from February 1, 2024. Treasury will continue to avail support for Zupco to seamlessly transition from the hire of private buses. Accordingly, Zupco is requested to provide a status report on the condition of the current Zupco fleet and immediate financial requirements to support the transition process," said Mr Guvamatanga in the letter.

Mr Guvamatanga highlighted that through the National Budget statement  Government had expressed the intention to give a greater role to the private sector to provide mass urban transport system for major cities.

"The policy decision entails a review of the current framework of cooperation, whereby Zupco is hiring buses from private bus operators to provide a subsidised urban mass public transport service at an average monthly bill of about US$6 million," he said.

However, the Government further said Zupco needed to be viable during this transition and would continue supporting it.

"As part of measures to support the implementation of the Government decision, and also sustain the viability of Zupco operations, Treasury has availed resources amounting to US$500 000 towards procurement of spare parts, adequate to repair 120 non-functional buses. The repair of non-functional buses, complemented by a programme to procure over 520 buses during the first six months of 2024 is designed to capacitate Zupco to anchor the provision of mass urban transport system without recourse to private buses," further wrote Mr Guvamatanga.

Following the developments, Zupco indicated to private bus operators where it was hiring buses that they were not going to renew the  contracts which expire on February 28, 2024. The acting chief executive officer, Mr Tineyi Rwasoka, said in the notice, that they were going to engage private owners as and when their services were needed in the future.

Zupco announced at the end of 2023 that they were set to procure 550 buses including electric models in a bid to boost the public transport system. The company said by acquiring electric models, the country would be aligning itself with the global climate change mitigation commitments in which countries have undertaken to cut fossil fuel usage and increase the adoption of clean energy sources. This they said will also limit harmful environmental emissions.