Phase out of 14-seater matatus to cost over sh50bn, new study reveals

Plan to phase out the 14-seater matatus and replace them with higher capacity vehicles will be an uphill task, a minister has said.

Co-operative and Marketing minister Joseph Nyagah on Monday said the phase out process would cost up to sh50 billion and shall be conducted over a period to avoid hurting the matatu operators.

The cost includes the projected loss of investment and the expenditure of replenishing the roads with higher-capacity vehicles.

There are estimated 60,000 matatus operating in the country, with about 14,000 in Nairobi.

Speaking during the release of a study on the impact of the new integrated national transport policy on 14-seater matatus at Co-operative College, the minister said the matatus would continue to play complementary role in the transport sector in the country.
The study was conducted by the college.

“The matatus that offer 80 per cent of transport in the country will continue to play a role in the country, mostly in rural areas and ways of phasing them out without hurting the operators will have to be found,” the minister said.

The minister however said the matatu operators would have to change how they conducted their business.

For example, he said, the operators would have to consider merging the existing saccos to form more stable savings and credit societies. He said the saccos should also consider merging their sacco accounts and the welfare accounts to create a larger base of capital.

“With the bigger book, its possible to attract more donors funds and loans from commercial banks,” he said.

He said the transport sector held much stake in the achievement of Vision 2030, and asked the players to work closely with the secretariat to realise the envisaged objectives.

The minister said the findings of the study would assist in helping attract funding from commercial banks to enable the operators upgrade their fleet to higher capacity vehicles.

The government is undertaking major infrastructure projects, particularly in Nairobi with the objective of creating a seamless transport system. This includes highways, railways and the airport.

The matatus, according to the plan are expected to operate as feeders to the major highways, once the projects are completed.

As a first step, the government ordered the operators to band into saccos or companies for better management, while it stopped licencing new 14-seater matatus from January, with objective of phasing them out through attrition.

According to 2011 Economic Survey, the number of registered 14-seater matatus declined by 19 per cent over the year in response to government change of policy.