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Zupco subsidy gobbles $51m monthly

The ZUPCO bus hire scheme is costing Treasury $51 million a month which is not sustainable, the Parliamentary Portfolio Committee on Local Government said on Tuesday.

Government came up with the Zupco scheme in a bid to cushion the commuting public from high transport costs, but the subsidised fares have been costing government a lot of money.

While kombi operators are now charging $7 to $10 per trip depending on the distance, Zupco buses have been cheap at $1 despite the ever-rising cost of fuel.

The Parliamentary Portfolio Committee on Local Government, chaired by Miriam Chikukwa, in its report on the 2020 national budget said of the $638 million allocated to the Local Government ministry for 2020, almost all that amount would be gobbled by the Zupco subsidy.

"The Local Government ministry planned to undertake projects aimed at poverty reduction, improved sanitation and standards of living in line with vision 2030 growth objectives and to this end $638 million was allocated in the 2030 national budget," Chikukwa said.

"Eighty-five percent of the amount ($638 million) is earmarked for Zupco bus hire management and the current bus hire is $51 million and if the current trend is to go on, the $540 million will only last for 10 months."

The committee recommended that government should procure more buses for Zupco instead of hiring as it was gobbling a lot of money.

"Your committee noted that the Zupco scheme is taking a huge amount of the budget. We also acknowledge the social impact the scheme is having on the citizens. There is need to quicken the procurement of Zupco buses.

"Government is urged to consider a build operate and transfer scheme and public private partnerships to quicken the procurement of buses. Your committee flagged the situation in Harare South as a potential hazard and urged Treasury to reconsider this area," the committee said.

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