Report On Consideration Of The National Transport And Safety Authority (amendment) Bill (national Assembly Bill No. 36 Of 2023)

a REPUBLIC OF KENYA THE NATIONAL ASSEMBLY THIRTEENTH PARLIAMENT - THIRD SESSION- ,2O2.I. DEPARTMENTAL COMMITTEE ON TRANSPORT AND INFRASTRUCTURE REPORT oN CONSIDERATION oF THE NATIONAL TRANSPORT AND SAFETY AUTHORITY (AMENDMENT) BILL (NA'I'IONAL ASSEMBLY BII-LS NO. 36 OF e0%) CLERKS CHAMBERS DIRECTORATE OF DEPARTMENTAL COMMITTEE SERVICES PARLIAMENT BUILDINGS NAIROBI FT,BRUARY, 2024. 1L J Fi:B ?!2E 1d't l \ iltt ' ttEt t'Q* 6ft ;iuxft*il8' , , ,_ l.*ir.JAo /t. , P1v:iLtrt4Q teg'on''s^tP;N--

TABLE OF CONTENTS LIST OF ANNEXURES.. CHAIRPERSON'S FOREWORD ..... EXECUTIVE SUMMARY....,.. PART ONE.,..,. I.O PREFACE r.r Mandate of the Committee.... r.c Committee Subjects ................ r.3 Oversight..... l 4. Committee Membership...... t-5 Committee Secretariat 9.O INTRODUCTION........... 9. I Background Information 9.9 Summary of the Bill.... 2.3 Public Participation in the review ofthe Bill ......... 3.o SUBMISSION BY STAKEHOLDERS . 3.r Submission by the Ministry of Roads and Transport ................. g.g Submission by the Federation of Public Transport Sector.. ....' 3.3 Submission by the National Gender and Equality Commission 4.O COMMITTEE OBSERVATIONS 5.O COMMITTEE RECOMMENDATIONS.......... ......9 ....10 .... 11 11 ....11 _...11 ...t2 ...L2 ...L2 ...18 ...19 ....20 .....3 ....,4 .....5 .....5 6 6 6 8 2lPage

a T OFANNEXURES ure l: xure 4 xure ,tr: 6: I Signed list of Members who attended the sitting that considered and adopted the report Minutes of the Committee on sittings considering the Bill and adoption of the report Copy of the National Transport and Safety Authority (Amendment) Bill (National Assembly Bills No. 36 of zosg) Correspondence to stakeholders requesting for submission of comments Newspaper advertisement inviting the public to submit memoranda on the Bill Written submissions received from stakeholders 3lPage

CTIAIRPERSON'S FOREWORD 'l-he National -l'ransl)olt and Salbty Arrtholit,\, r\nren<lnte nt'lllill (|"'dtiontl .'lssenbl.t' Iltll.t No. :t{; ctJ 2o2s) \\.as Ileatl a FiIst 'l-inte ()n t,h ()ctr>ber, 9o93 an(l srtbseqttttttl-\' cotrttnittetl to the l)epar.tn)ental (i>nrmittee on -franspolt and Infi'astrttctut'e lirl't:onsideration antl rt'llorting to the I Iouse pursuant to National Assembly Standing Ordel' 127. 'lhe principal object ofthis Ilill is to anrend the National 'l)'anspolt and Sallty Autholity Act No. s of qot1. 'l'he atnendments seek to introdrrce a new st ction which provirles fbr the developtttent o{ policy guidelincs to legrrlate the thles paJ'able bv l)assengers in the ptrblic sctvice vehit:les sithin the countt'y. The ncs'section will ensrrre that the relevant stakeholdet's att'involretl in the process ol'developing srrch policy guidelines so as to ensur'('that therc arc ntaxinttttrt {hres payable by passenllers in thr public vehicles ljlnr ont'point to another to avoitl lrt'ing sttlr.iectetl to abrrst'. While contlLrcting public palticipation, the (lornrnittee lllacetl atlvertis e ntt'n ts in tlte ltrint trretlia of'6th October, 2o2.9, seeking comnre nts li'orn the ptrblic on the Ilill pulsuat)t to tltt'lrrovisions of Article ii of'tht' (irnstit rrt ion antl Standin g ( )r'del' l 2 t(.3). -l'ht' ('ontttrittct' teceiYt'tl tnelnora tttla fj.om tht' Ministt'y of'Iloatls antl 'l'r'ans1,lort, l''edelatiort ol'l'rrblic 'l't atts;tort St'ctor anrl the National (iender and lhlrralitv Cornnrission. 'l'he (irnrrnittee also vidt' a lettcl ltef. No. NA/ DDC/'l'l/qo2s/ (ttxt) tlaterl l5th November',2023 s()ught the vieus antl cottuttorts on tlt('Ilill from Kenya Private Sectr>r Alliance, (irnsttmers Iietleration of Kcnya, Matattl Ownel's Associatit>n among others. 'l-he Cornnrittee firrther reccived both oral anrl rvritten sttbmissions fl'orrt the Clalrint't Secretar-y ol'Roatls and Tr.ansltort in 8rl,Novernber 2ot25 who was accontpanied by the PI'incipal Secretaly for the State [)epartment lirr 1-ransport anrl othel ollicials lionr thc N{inistrv of'Roatls anrl -l-ransport. 'l'he Conrrnittee is gratefirl to the Oflices of'thc Speakcr and the (llerk ol the National Asst'nrbly fur the logistical antl technical supl)ort accor'(lc(l to it drrling thc consitlcration ol tlre Bill. I rvish to expt'css my appreciation to the (irntnrittr.t'N{embcrs and tlrt'(irrnnrittt'e Secrctariat firl their resiliencc and tlevotion to tltrty rr'hich nrarle the consitleration of'the Ilill sttccesstitl. Iiirrally, I n.ish to t'xltress gratitutle to Membels of thr'lltrblic rllto sttbmitte<l their vit's's atttl colttttlcttts oll the Bill in the corrrsc o1'ptrblic pat'tic il)atior). -l'heir vieus anrl corttttrentls intleetl rrt'te vital in the consideration of thc llill. On behall of the (irmnrittee and pursuant to the provisions ol Standiug Ol'del' l1)l) (o), it is nt1' pleasant privilege and honour to l)r'esent to this llotrse the report t>f'the Cornnrittee on its consideration of'tht National Transport and Safbty ALrthority (Anrenilrnt'nt) (National Asscnlbly Bills No. 36 of ,o2.9). HON. G.K. GEORGE KARIUKI, M.P Chairperson, DePartmental Committee on Transport and Infrastructurc 4lP.ri:e

t*"crrru" suMMARY the National Transporr and Safety Authority Amendment)Bill (National Assembll Bills No. s6 of 'oetS *u" Read a First Time on +rh October 2023 and subsequently committed to the $epartmental Committee on Transport and Infrastructure for consideration and reporting to the $ouse pursuant to National Assembly Standing Order rq;. the principal object of this Bill is to amend the National Transport and safety Authority Act No. dof "2ot.2. The amendments seek to introduce a new section which provides for the development 6f, policy guidelines to regulate the fares payable by passengers in the public service vehicles Jithin the country. The new section will ensure that the relevant stakeholders are involved in tlre process of'developing such policy guidelines so as to ensure that there are maximum fares ppyable by passengers in the public vehicles from one point to another to avoid being subjected t6 abuse. l1 order to fulfill the requirements of Article t ta ofthe Constitution, the Committee placed an a{vertisement in the print media of6th October,20"29 requesting for comments from the general p[bli. on the Bill. The Committee received memoranda F-ederation of Public Transport Sector ahd the National Gender and Fiquality Commission. The Committee considered all the sgbmissions before making its recommendations. The Committee further received both oral and Jritten submissions from the Cabinet Secretary ofRoads and Transport on 8th November 2093 *[ro *u. accompanied by the Principal Secretary for the State Department lor Transport and olher olficials from the Ministry. Ilaving considered the Bill and taken into account stakeholder views the Committee observed that the Kenya operates as a capitalist country and that the legislation might bring more p4oblems than solLttions. Iq view of the foregoing, the Committee recommends that the House rejects the National Tlan.port and Safety Authority (Amentlment) Bill (National Assembt\ Bilk No. s6 oJ:2o2s) in its e rltir"ty. sl Page

PART ONE I.O PREFACE I - I Mandate of the Committee The Departmental Committee on Transport and Infrastructure is established pursuant to the provisions of Standing Order No. 216 (t)and (s) with the following terms of reference: - a. inaestigate, inquire intn, and report on all matters relating to the mandate, mdrogernm| actiuities, administratioq operations and estimates of the assigned Minutries and departmais; b. study the programme and pohcy objectiaes of Minitries and departmcnh and the efectiaeness of the in?bmmta tion; c. on a quartzrly basis, monitor and re?ort on the implemmtation of the national budget in respect of ik mandale; d. study and rerieut all legislation refared to i4 e. study, assess and analyze thz relative success of thz Mhistries and departmmLs as measured b1 the results obtained as compared uith their stated objectiaes; J inaestigate and inquire hto all matters relating lo the assigzed Minttries and departments as thq ma1 deem necessaryt and as may be refen'ed to them by the House; g. aet and report on all a??ointments zohere the Constitution or an1 lazu requires tht National Assemb$ to a??rou, e:LcEt those under Standing Order 9(x (Committee on Appointmnh); h. ctamine treaties, agretmenh and cont,mtions; i. make reporh and recommendations to the House as ofien as possible, including recommztdation of proposed legts htio4 j. consider reports of Commissions and Indepndent Ofices submittcd to the House pursuant to the provisions of Article 25a oJ the Constitution; and k. etamine an1 questions raised by Mtmbers on a matter uithin ik mandate. 1.9 Committee Subjects q. The Committee is mandated to consider the following subjects as per the Second Schedule of the Standing Orders: Transport, including non-motorized transport; Construction and maintenance of roads; Rails, air and marine transport; Seaports and national integrated infrastructure policies and programmes; and Transport safety. l. ii. iii lv. 6lPage

t..t ()versight lj. 'l'l)(.(i)lltr)ittce o\(,rsi!IItts tlre \linistlr'of lkrarls antl 'l-t attslxrlt rlltieh Irrrs t\\o Stat(' I)( l)aI tn)('l)ts nalr)cl,\': II StiIl(' l)('l)illtr)r( rtt lirt llrratls Stirt(' I)( l)ilrtrlr('nt fi)r 'l'l arlsPort l. Irrrltlrt.r , ('orrrrrrittt.r ovt'r'siglrts tlrt,st;rtt'l)t'lraltrttt'rtt lirr SlripPirru itlttl N'[irlitit:le :\llirirs rr Iiclr is Lrrrtlt'r tlrc Nlinistry ol \Iirring. lllttt' Ii ottotllt', lrntl \laritirrrt' ,\llirils 8l

1.4, Committee Membership 5. The Committee membership comprises, - The IIon, Arama Samuel, M.P Nakuru Town West Constituency Jubilee Partv The Hon. Naicca, Johnson Manya, M.P Mumias East Constituency Orange Democratic Movement Party The [Ion. Francis, Kajwang' Tom Joseph, M.P. Ruaraka Constituency Oranse Democratic Movement Partv The Hon. Kiaraho, David Njuguna, M.P Ol Kalao Constituency Jubilee Partv The Hon. Kiunjuri Festus Mwangi, M.P Laikipia East Constituency The Service Partv The Hon. Bady, Bady Twalib, M.P Jomvu Constituency Oranse Democratic Movement Parfv The Hon. Abdul Rahim Dau'ood, M.P North Imenti Constituency Indeoendent The I Ion. ().K (ieorge Kariuki, M.P - Chairperson Ndia Constituency m ratic Allian The Hon. Mutua Didmus Wekesa Barasa, M.P- Vice- Chairperson Kimilili Constituency United Democratic Alliance Party The Hon. Elsie Muhanda, M.I' Kakamega County M vement Part The llon. Chege John Kiragu, M.P Limuru Constituency United Democrat ic Alliance Partv The I{on. Abdirahrnan, } Iusseinweytan Mohamed, M.P. Mandera East Constituency Orange Democratic Movement Part v The Hon. Komingoi Kibet Kirui, M.P Bureti Constituency United Democratic Alliance Party The []on. Saney lbrahim Abdi, M.l' Wajir North Constituency M ent Part The Hon. Jhanda Zaheer, M.P Nyaribari Chache Constituency 9lPage o a ic Alliance P

.5 Committee Secretariat The Committee secretariat comprises: - Mr. Mohamednur M. Abdullahi Clerk Assistant III Mr. Eric Kariuki Research Olficer II Mr. Mabuti Mutua LeEal Counsel Mr. Josphat Bundotich Senior S,rt A Ms. Tracy Chebet Koskei Senior Clerk Assistant Lead Clerk Ms. Clare Choper Doye Clerk Assistant III Mr. Yusuf Moge Fiscal Analvst II Ms. Ivy Maritim Media Rela ions C)fficer 10 I age

g.OINTRODUCTION e. I Background Information ;. The National Transport and Safety Authority (Amendment) llill (National Assemb\ Bilk No. s6. Of 2o%) seeks to amend to the National Transport and Safety Authority Act No. 3 of 2012. The amendments seek to introduce a new section which provides for the development of policy guidelines to regulate the lhres payable by passengers in the public service vehicles within the country. The new section will ensure that the relevant stakeholders are involved in the process of developing such policy gtridelines so as to ensure that there are maximum fares payable by passengers in the public vehicles liom one point to another to avoid being subjected to abuse. 2.9 Summary of the Bill A. CLAUSEBYCLAUSE CONSIDERATION 8. The amendments proposed in the Bill are oLrtlined below (a) Clause 4 ofthe Amendment Bill seeks to renumber the existing provision in section 5'l ofthe National Transport & Safety Authority Act as subsection I and introduce a new subsection (z) which proposes to empower the Cabinet Secretary for Transport & Infrastructure to publish regulations to prescribe the following- ll. lll lv the maximum and minimum fhres payable by the passengers in the public service vehicles within the country; the mechanisms of reviewing fares in the public service motor vehicles; the measures for ensuring that fares imposed are fair and reasonable; the modalities by which public service vehicles retain copies oltimetables and lare tables to be displayed for all passengers to seei and the means ofensuring that salety ofthe passengers in the public service vehicles is guaranteed. 2.3 Public Participation in the review of the Bill g. Article I l8 (l)(b) ofthe Constitution ofKenya provides as follows: - '?arliament shalt facilitate public participation and involvement in the legislative and other business of Parliament and its Committees" Standing Order l2?(s) provides as follows- "The DepuTmntal Committee to uthich a Bill is committed shallfacilitatt public participation and shall take into accounl the vians and recommmdatiots qf the public zthar the Commiltee makes ils recommerdatiorts to the Hotse" 11 lPage

1o. In I e with the Constitution and Standing Orders, the Committee placed advertisements in the print media th October, 2oqg. The Committee further invited the Principal Secretary for Transport to make both on wri en and oral submissions on the Bill vide a letter Re[ NA/DDC/TI/ 2023/ ogs dated 16th October, t t. The Committee received memoranda from, the Federation of Public Transport Sector and The National Gen[er and Equality Commission. on 8th November 2023.The Committee, on the same date, also received oral and written submissions from the Cabinet Secretary for Roads and Transport accompanied by the Prin]cipal Secretary for the State Department for Transport and other oflicials of Ministry of Roads and I ratsPort. llPagt

S.o SUBMISSION BY STAKEHOLDERS s. I Submission by the Ministry of Roads and Transport The Cabinet Secretary for Roads and Transport, Hon. Kipchumba Murkomen, EGH appeared before the Conrnrittee on 9th Novembe'r,2o23 accompanied by the Principal Secretary fbr Roads [')ng.Joseph i\{lrrrgtra, OBS and strbmittcd as lirllorvs, that- t2. 'l'rade liberalization was part of'a broader push in Kenya to decrease the govet nment's t'ole in the econolny and give market lbrces greater influence. I'rict'controls, rvidespread itr the economv lx'lirle thc strtrctrrral adjustment loans, u'ere largely elirninatetl throtlghout the Iate ll)sos and early ll)s)os. ts. 1-he Kenya Institute for I'ublic l'olicy Ilesearch and.i\nalysis (KIPPRA) is an atttonontous institute rvht>se primary tnission is to conduct prrblic policy research leading to policy advice. According to a 1;Lrblication Ir KIPPFL,l., price controls have melit rvhen markets ar¤'not pel'fbct, and dilect pl-ice-controls as a long-ter rneasure have not rvolkc<l in tht' past in Kenya and elservherc. In addition, price controls rvill violate international antl regional t ratlt' agreenrt'n ts that the cottntry has si5;nt'rl. 14. In (lonclrrsion the Cabinet Secretat y recornmentletl fbl a comprehensive study an(l stakc lxrlder engagetnent on the Bill's proltosals to asses practicability and ensure compliance cont entions ot' treaties. 3.2 Submission by the Federation of Public Transport Sector The Federation of Pubtic Transport Sector in theil rvritten menrorandurn liell No. FI''I-S/ t l/2023/ 5 (lirte(l 22u,1 N<x'enrber 202.9 and signed by N{r. Iithlins Mrrkabanah the ()hairperson ol'tlte I'edet'ation sttbmittetl as fullows, that- 15. (;overnments all or.er the rvorltl seek to control lhres to ctrshion vtrlnerablt' and tht' socially excluded nrem}ers of'the society. SLrch art'; the urban poor', the rttral lxror, the sick, petsons living rvitlr tlisabiliti (l'Wl)s), seniot' citizens, school childrcn, pl'egnant motllers, etc. Iti. I)rogressive Clovernments are otien concerned rvith its population's ability to pay lbr I'ublic -l) ansport (l)'l-) services, because I,'f is a fhcilitator of.jorrrney pulposes, such as, school, s'olk, leisure, rr'orship, sports, etc. An efllcient, fhst, comfortable, sal! and aflbrdable I'-I'is an enabler or driver of econonric activities in a 9l- hout'economy. (ixtrol lhres can assist ntanage the cost living. 17. Where l,'f is provitled by the I'ublic Sector, e.g., on rail tlanspolt in Kenya; it is casy fil'the governmt'nt to provide a subsidy as it has often tlone rr'ith Kenya llails'ays' S(ill or Likoni Ferlies. Bttt s here srtch services 12 ll'aBe

are pr.ovide(l (note: contracte(l out) to the private sector, it beconres dillicult to justify subsidy payments to parlianx'nt. trj. l,'l- fhres are controlletl (regrrlated) in nrost ulbanized areas in the rlot'ld. Such cities tlse diflerent tyPe of Ihre strrrctures, such as, gratluated fares, flat fares, mLrlti-journey tickets, zonal fares, peak/ofl'peak fhres, contra-florv llrt.s, seasonal fhres, special fales (school children, seniol citizens, PWI)s, essential services stafF, etc.) 19. Sonle cities in developetl corrntries nolr' provide their citizens rvith fi'ee P'l' sen'ices. 'l-hat means, just like parlianrent apltroltriates rnoncy Ibr inli'astructure developnrent antl maintenance, it also appropliates moncy to llrovide "liee' l,'l' selvices. It is at'grretl that roatl infi'astl'uctut'e is the hardrvale and transport is the solts.are. I.()r'in,iastnrctule to tlt,liver tlanspoltation mrrst be eflicit'nt antl aflbrdable. An eqtritablt' [)-l' neutralises sgcial t:lasses antl pl'otrtott's incltrsivity' "\ good P-f is ofien tlesired to ctlrtail the grouth ol plivate car to tetlttce t<tngestion and firr environntental sustainability rtasons. -O. It shorrltl be trotetl that, using technology, both urban anrl inter'-city [art's at e contl'olled in ottt neighbotrring countr.y o{ ll\1'antla Lrsing the regrrlator IILIltA. In thc city of'I-ondon, rr'e have n)any opel'ators rvhose l'T buses ar.e painted r.ed and operate on one contl'olled rr>rrte network antl a cashless lare platfirrm controlled by an organising authority called 'l-ransport lbr Lontlon. The fi'antes ork to administer regulated firres, as is in Rwantla anrl Lr>ndon. inclrrde all stakeholtlers. 21. 'l'o regulate lh.es, govelnment rerluire policy, legislativc, regulatory an<l institutional ft'anrervot'ks to be able to provide a contr'olle(l ftrre teginre that is based on con'ect cost Pal'atlletel's. It is the duty ofparliament to ensrrre the above fiarnes'orks are in place first befirre allorving governlllent to control f'ares in a fiee market econollty. ,.22. It sholld lr rrott.tl that most governnlent institrrtions use a pl'icc ct>ntrol tnechanisnr on mileage claims 'l'ltey use pletlefirred rates, sttch as,,{tttorrx)l)i]e Association of'Kenya (Ar\) rates. It shopld firrthel be notctl that three rna.jol costs in l''l' opt'rations, that is, I''rrel is regulated by lil'RA and Insurance is regrrlated try IIL\ uith no conrplaints lrolrt tht' Conrl>etition Atrthority ofKenya. Labour Cost is sLrbject to the governnrent contlolletl Minirnuln Wage Ouidelines under the LaboLrr Laws. 3 ,-2.I 25 In fhct, nrost costs of o1>elating a l''f vehicle are insct'il)ed in las. I'-or example, a l'T vehicle must (i) (lonrply rl ith all LaboLrr Larvs (ii) Opelate Ltntler a Sacco or'(lonll)any (iii)l)ay (irurrty Parking ["ees (iv)Clean vehicles at all tirnes (r.) llave cr.erv rvho at'e unilbr.nred, $'ith I'olice L'ornltliancc Ce|tificate and N'I-SA Badgtr (r'i) Issuc l)ass('ngers tl'itlr Cashless 'l'ickct 13 ll',,;e

(vii) I"it a tracking device and a s1;eetl govet nor (viii) P'l- vehicle Iittetl seat belts - even if'one is operating in an ttrban area (ix)Clarly a Fire Extingtrisher and llefleckrrs I Ia't'e a 'fl) InsLtrance (x) I lave a Road Sen'ice I-icense (xi) Inspect vehicles anntrally (xii) l)a1'.r\rlvancc'l'ax zr;. t\ll the above legal re<yuirenrents increase the cr>st ol rloing lltsitress hencc lnaking I''l'opt'ration a krss- nraking enterprise. It should be noted that most P'l- operators collaltse alier a lerv yeals ol ollelation. International investors such Llnited 'l-ranspo|t antl Stagecoach ptrlletl out ofP'l'opelation in Kenya and since then se have not attracted any ne\1 ones.'l-his is becattse ofthe operation antl l>ttsincss environlttent u,here the licencing regirne is not aligned to international best practice. I"ot cxantllle, rotttes ale over l)tlses and P'l' lares applied in Ken1,a are not based on proper costing. Regulated lares sill enstll e opel'atol's charge passengers fhres that have a costing basis. 9;. For the prolit-oriented enterprises such as Kenya's private sector driven P-l', a costing nrodel that pt'ovi<l (iross (lost (lontract - plus nrargin lvill be ideal. 'l'his can only be done in a.jurisdiction s'here rcgttlateo fhres are revieu etl regularly bv a I'-l- N,lanagement Boat'tl. 'l'he Iloartl cornposition shotrltl be matle trp ol'all stakeholders. 'I'he stakeholtlels should sit dorvn to agl e(' on ( ()stirt1 parirlnctr't s ()t' ;l Plicing lirrmula sinrilar' to tlre one rrscd by the [')nerg,\'antl l)etroletttn Ilegtrlatorl' r\utholity (l']l'IL{). a) Rcgulated Fares and a Free Market 2,J.'l'he clrrrent opet'ator is userl to callying at loo% load fitctot at the start of'a.jotrrney and rt'acts to malket ftrrces ol supply and denrand by charging less fares dLrring lorv denrand and high lares rltrring high detnantl. Crrn.ently thc pt'ivate ol)erator adjusts Ihres depending on seasonality t>r peak ,/ oll'pcah. I"actors, sttclt as, school holitlays, rain, tinte of'day, availability of'competition, etc create a spike in firle pricing. Intercity oper.ators, also, atljrrsts flres depending on rvho burked first and rr'lto booketl last, Iirr exanrple, during l'laster' and Ch list ntas seAsons, ('lc. ,21,;. 'l'he above phcnonrenon is typical ol a liee nralkt,t and is olien set'n in airlint's thre plicing. In this scenar' travel is .just like any other valrrable colnmorlity that leacts to the larv of supply antl tlentantl in a perfbc. nrarket. iJo. Llnfbrtunately, there alt' no conrplaints rnatlt' at airlines l hcn thel' rtse Amatletts airlint' tickt'ting systenl to char.ge lhres base<l on nrarkt't ftrrces of'$upply antl tlentand but a lot of contplaints are trtatlt'rvhen I)'1- ttses stage cartels to charge fhres basetl on l)assenl{er tlentancl antl strppll'. -l'his is perhaps }rccattse o['t]rt'inal>ility to pay of'a I)'l- passenger u hose tlisposable irrct>nre is limited cottt;tarctl to the airlint' ltassengers. It cotrld also bt noted that in I''l'a large ntrlnlrt'r of lnembers ol pLrblic (passengt'rs) are alli'ctetl. .gt. Modern principles ofproviding l''l're<luires a controlled market (not a fiec Inarket) rvhele there are rttles ol'entt.y and exit using a Ihir licencing regulatory regime. l)uring the era of -l'l,B .'\ct, r'hen Iires rtere 14 ll'asc

controllc(l, the -fl,B contr'olled the ntrnrber ol yehicles to lre licenced on a route to and fi'onr a destination 'fl,B Iloar.d travelled to e\'('ry t egion and userl data and prrblic palticipation to license oPerators. .gz. Llnder. l'l,B .r\ct thel'e as competition for the routes instead ofcornpetition lor passengers which is the case rrntler thr National -l-ranspor.t Safbty Authority (NTSA) Act nou. Thele wet'e consultatitxs in a public lbrunr betrveen thc regulator, provincial administl'ation, consumel's and all t>pel'ators. -fl,B entleavottred t<r liccnct, an olltirnurn number of'lruses or op('rators to ol fi-oIn a particLrlat destination to rrinilnise unf'air and u astelirl cornpctition. -I'l,B also nrade gleat ellirrt torvards rentoving cal'tels on t'otrtes, stages and terntinals, rvho in ntost cases tletertttine titt'es chat geable. .1.r. l)uring the'l-l,ll r.r'a, r:very ol)el'ator was leqrriretl to file rvith'l'l,ll a falc table, titne tablt'and to display a (londition of ()an.iagc at the heatl oflice. LInder N-I'SA Act, now, it is a fiee lirr all rvhere fiee or perfbct ntal.ket fi)t.ces print:iples have collapsed. Iiares are corttrolled l>y illegal stage cat'tels u'ho are not alive to the rlechanisms of a plicing formrrla. Fales alc eithcr too high or too lorv (predatory pricing). Passengers or vehiclt'orvners are oftt'n held at ransont. t. l.]nlirrce r.nt,nt is lacking or is cornpronrised by collLrption. legal operators * ho are not comPliant rvith the above-mentionerl lau,s ale often leli to roanr the nralket giving compliant opet'atol's a run firr their money. 'lhe rr:sLrlt is; evely opel'ator clccitles to start cutting corners by breaking the larv with linrited revenue, the vehicle osner.s re<lLrce vehicle maintenance expenses leatling to increased accidents. Workers' terms o[' <'nrplo-vmt'nt get $'orse. Investing in nerv vehicles stalls. S5.'l'he fact that tl)el.e is rxr flrt,control nreans l)assengers arrd vehicle o\\'ners ilte leli at the mercy of illegal cartels or.cr.cu.. C)ltelators (Saccos antl Cortrpanies) contintte orve theil Inanagen)ent t:ommissions li'onl vefiicle os.nrr.s u.itlrorrt caring aborrt the vehiclc o\\'ner''s l)rofitability. -fhe orvner ofthe vehiclt'losses c<>ntrol 9f his I,'l'brrsirress brrt he / she is the onc ulro takes the lteating s'hen passengers ate overchat'ged or trntlerchar.ge<I. It is lell kno\\'n tllat the r>r'ercharged arnounts aI'ising ottt ofttralllractices, stlch as, carrying exccss l)assenger-s nevt.r' r car:hes the llLrsiness orvnels brtt lrt'/she o{tt'n takes the lllame rlr insul'ance risk. sr;. 'l'he bt,nelici:rlies rvlro alc. the t'nlirrcenrt,nt oflicers s ho abate traliic violations, the crerv l ho brt'ak the la\ and thc stagt'cartcls \i ho set u n-p t'etlica lrle fhres, olien get away scot-ll'ee. S;. Wht reas passengels ct>nr1;lain of treing charged high fares, often set by stage cartels, dul'ing high demand or. eyen s.hen it rains, r4reratr)rs c()ml)lain ol very lorv lares (pledatory pricing) uhen there are ferv passenger.s (lorv dernand), s,hen the sarne stage caltels, charge fhres that arc belorv the cost of'providing the sel ice. Over-charging or rrntler charging lirres shoLrltl lx>th be prrnishable by the Comlletitiorl Authority of Kenya. Ovt,r supply ol'r.ehicles (legal and illegal) has letl to cut throat, unlhit'and rvastelil cotnpetition. Ss. lt shoLrlcl lurther. be note(l that l)assengels eonrplain only * hen the lht-es are high bttt they nel'er complain 1.hen fares ar.t, |clol the cost ol ploviding the selvice. l'oliticians al'e lt)ore conr:ettted rvith high lares bttt do not try to fiptl orrt s'hy thc (irnrpetition .,\utholity ol Kenya nevel l)l osecutes those oPerators who apply prerlatory pr.icing, s'ith sorne rrn<ler crrtting lirr-es ol even cart'ying ltassenger lol fiee, when they get a license to oper?te a loute rr'here there are other opelatol's. 15 lPaile

s9. Iiares need to be controlled, because Competition Atrthority ol'Kenya shose mantlate is to enfbrce the Competition Act No.l9 of qoto rvith the olrjective ofenhancing the uellare ol'the people of Kenya by promoting and protecting effective competition in markets and prcventing misleatling ntarket conduct throughout Kenya is dyslunctional s hen it comes to overseeing competition in I)'f 1;rovision. Ijqtlally the P-l'regulator NTSA has been unable to regulate the passenger nrarket in tertns ol'standat'tls, tarifli and the entry and exit of I'-f lelticles an<l operators (Saccos and ()ornpanies) .1O. The pal.atransit transport that operates today in Kenya does not benellt the operator, r'ehicle o$'ner (investor, the passenger, the stafl'or the government b) Enablers to a Regulated Fare Regime It.l.ooking at scenarios n)entioned abovt', there is a.irrstilication lbr regulation of'litres in l''l'. II'done rr'ell, operator.s, passengels, stafl'and the f4overnment rvill stand to beneljt. But to do so, the lbllorving meastlres need to be put in place, (i) Frameu,ork - -fhere rvill be need to put in place a Fare Policy, arnend the -fraflic Act and the N'ISA Act, develop regulations and insure Nairobi Metropolitan 'l)'ansport Atrthority (NaMA'|A), N1'SA, Conrpetition Authority of'Kenya, -l't'ansp()rt l.icensing 'l'r'ibrrnal and National l)olict' Service u ork as a tea nl. (ii) Iioute Netrvork Plan - N'I'SA and Cotrnty go\,elnment will have to develop a countrywitle antl countyrvide PT Iiotrte Network Plans.'t-he network plans will havt'to have data on aspt'cts, sttch as, kilornetres, stages, I''l' inli'astrLrctule, stafl, r'ehicle ntakes, types and specilications, ()Pel at()l's, etc. (iii) I-icensing lleginre - N'I'SA u ill have to start issrring [)'f Operatot's rvitlt an Olttratot''s Liccnce of 5 - l.i- yeal's that all()ws operatot's to compete lor rotttes and not llassengers. (iv) Iiegrrlate taxis, t\\'o antl three tvheelet's - Cotlnty governnlent rvill need to pttt nreclranisms ofregulating taxis, probox, tuk tuks and boba boda ln place robust (v) I.ixternalities -'I'he State l)epalunent of'l)'ansport (Sl)o'f) rvill have to devekrp a policy that ivill assis. curtail externalities (listed above) in palatransit operation and pt'ontott' fblrnal I''l'opel'ators (vi) C'apacity Iluilding for Regulator and -l'ransport Committees at County level - I'-or I'are t'egtrlation to take eftbct, there is need to train investors antl operators on plicing.'I'he regtrlator rvill need to caltacitatt'the IrT licencing department at N-I-SA antl in Counties to be able to have both the tools to capttrrt' P-l' operation costs antl to recrtrit antl train stali that can tlo thc.iob. (r'ii) Capacity Iluikling fbr Operators - 'l'here s'ill be neetl lbr Opelators anrl tlteil stafl'to lx' tlained on horv to operate under the neu lat rvhere liles ate regulated. 16 lPage

(r.iii) Enlirrcenrent - 'l-lret e rvill l>e need to ensure that enfirrcement oflicers have the tools and wherervithal to enfirr.t:enrent conrl;liance and here violations are seen legal action to lre taken without taking bribes. Other11ise. t[is rvi]l tre an avenLur fbr en{irrcenrent officers to etrrich thentselves at the expense of OI)el'atol's. (ix) Centralisetl Atrtonratic I.'are (irllcction - -.['here s'i]l be Itecd to put in place a [IoveI'nment firnded central liltech srritch to enable cashless lhle transactions to take l)lac('. 'fo enfirrce ct>Inpliance rvith Ihres regrrlations, cver-1, l)1'opel'atol rvill have to gi'ie each passenger a fblnt of receipt or ticket ftrr eYery .iorrrney nrade. Using technology this should be possible. (x) Ilemor.al ol (laltels li'onr Stages -'l'here s'ill be neetl lirr County gove|nnlents together rvith security agencies to remove cartels fi'orn stag;es / telminals and pror.itle tlteir orvn Courtty stalF to manage the stages. -flris coulrl also be done under a National Youth sen'ice recruitlnent progrant or Kazi Kua L'ijana. (xi) Collection o1'Data - N'ISA and oPeratols rvill haYe to collect data that can be ttsed to cost PT operation and set fhres lirr eaclt category ofvehicle per kilomt'tre or hour ol'operatit>n (xii) Dispute ResolLrtion Mechanisrl - -l'he re s ill be need to rt'iuve nate antl firnd the -l-ransPort (xiii) Licensirrg'l'ril>rrnal so that th()se opelators rvho tnay be denied a liccnce ol fbel that the fhre tariffs git,en to them (lo not rellect the cost oI'opelating the routt: antl are thet'efirl e aggrievetl could seck retlress in the'['ribuna], as rrse<l to be then rvht'n -l'r'ansport Licensing -I'ribtrnal rvas lttnctional. (xiv) Priority Measures - 'lhe governrnent *ill have to put ir) place l'1- priority nreasttres, using both econonric and political instrLrrncnts, over'privute transport, such as, sLrbsidised lares Ibr socially rlisath.antagetl, a progressive licencing regirne, a fiiendly tax regime, traflic managenlent, use of road space, staggeling stalt and finish ofrvorking hottls, etc. (xr.) County l,-I- Las's - I'1- being a devolved lirnction there s ill lre need for the Council of'(iovel'nors (CoG) to harmonise cotlnty transport laws act'oss the'17 counties with the N'I-SA Act' (xvi) Creation of' tnrrlti-s takeholder National P'f Managernent Board or Committee under N'fSA Act u'ith l)o\yers to r.egrrlate fales that rvill *ork closely * ith Corrnty 'l\'ansport and Salirty (--otnmittee at Ootrnty levtll. c) Benefits ofa Regulated fares (i) lrassengcrs - [.'arcs rvill be pledictable. -l'here sill be no overc]rat'ging. Olterators uill now maintain their yehicles uell and be able to invest in new safe, reliable and con)fol'table rolling stock. (ii) Operators - Operators rvill have a level playing lield. -I-here rvill lre no lare undercutting and revenue leakages $ ill ledrrce du(, to cashless Ihre collection system. (lorrect pricing rvill lead to profitability. -l-he ease antl cost of'doing bLrsiness rvill redtrce. (iii)Stall'- -Ihey will get social protection and descend jobs 17 ll'age

(iv)Governnrent - National and County governments will have a quality I)T system which will lead to a better quality oflife. It will be able to bring more operators and workers in P'l'under its tax bracket. +2. The Federation in conclusion, submitted that if the above aspects are considered, regulation of fares is the way to go. The Federation will support the Bill to regulate fares in P'f industry. 9.3 Submission by the National Gender and Equality Commission The National Gender and Equality Commission submitted as follows; +S. The Commission in its submission, proposed that Clause 2 be amended to refer to section 54 of the National Transport and Salety Authority Act which the clause seeks to anrend. l'his wended. oversight since the clause does not make reference to the section ofthe Act being anrended.l'he provision therefore should read- Clause 9 The National Transport and Safety Authority Act. 4ol9 is amended in section 54- by renumbering the existing provision as subsection (t); and by inserting the following new subsection immediately after subsection (l) ..' ++.'Ihe Commission further submitted that paragraph (e) to the new subsection (2) be amended to include the words "dignity and comfort" immediately after the word "safety". Justification of the proposed Amendment 4,5. The effect of the amendment is to require that the regulations made by the Cabinet Secretary should also address issues pertaining not only safety but also the need to maintain certain standards to safeguard the dignity and guarantee the comfort of consumers transport services through public sen'ice vehicles. lSlPage

4.O COMMITTEE OBSERVATIONS t(t. 'l-he Cornnlittee \\'hile collsid('ring the Bill nrade the fi>llorving observations; l) llie proposerl arnendrnents in the Bill corrltl pose rrtole challenges especially administrative challenges ol' irnplernentation and ensuring complianct'. z) '['he ()ornrnittee obsen,ed that irnplementing price controls in the public service' tt'ansport sector rvill conllict u'ith intelnational and regional agl'eements that Kenya is Party to. 9) 'fhe cornnrittee obsen'ed that the pledominant nrarket players in pLrblic transport are private invcstol's organized in lbrrn ol saccos, Oornpanies or Individrrals and inrposition of controlled lht'e pt'ices rvottlcl reqtrire extt'nsive stluctul'e(l er)lSgenrents to takc into itccoru)t extenuitting fitctots associated rvith the tr.alrsport sector inclrrding the unpledictallle lirel prices; the varying cost of sltat'e parts rvhich are nrostly irnpolted; the neetl {br stnrctrrretl torvn planning to ensure tlesignatetl alighting and boarding stations alurgsirlt' u hich sLrch firle plices *'ottld lre tletet ttrined. +) 'l'he (ionunittr:e obser'\'ed that in Kenya, a srrbstantial initiative s'as ttlrdertaken t<r gorr:rnnrent's role in the t'conorny and pronrote free nralket econ<-rrny policies geared to allorv an ar'r'ay of'choice in the nrarket. leduce the coI)sunlet's 5) 'l-he (bnrrnittee oltserved that l'egulating lhle plices nray significantly alhct the public transport sector carrsing a tlecline in s\)ply (tl operatorr arzl) which would consequently halnper ability to commute antl engage in economic activity. 6) -l'he (--orlnrittt,e observed that the costs ol'providing public transport sen ices are significal)t and !{r'ossly rrnpretlictablt. [.'or instance, -l-inrt. r'elated costs, distance related & r't'hicle re]ated. -l'he deterlnination of' consurn(.I' 1;rices in the tlansport sector n)ust take into account tlle tinte ol'travel, the distance to be covet'erl anrl the type o['r'ehicle and also lbctor the labour c<>sts (salalit's Ibr <lrivers, touts, inclrxling their rrnifblrns), costs oftirel, trrsts ol'sl)are l)al'ts antl repair sel vices, cost ofinsut'ance, advance tax costs, road license costs, ticl(rtin!{ costs, coultty seasonal })arking costs, cotnpliance costs, loan repayments and other ovelhea<l costs (r,ehicle cleaning, sacco nrt,nrbership fbes and fianchise rnanagenrent lbe.'fhe committee surmisetl tlrat the tr)etric lbl price tleternrination and tlisaggregation is significantly nuanced lbr any entity to efli'ctively and objectively nrake l)r'ice tleterminatiolt. i) 'l-he irnplenrentation ol'the ploposed an)endnrents in the llill will necessitate a significant nttml;er of tlafiic police ofllcers to ellbctively enfbrce. 19 lPalc 2I FtB ?s:{

5.o c RECOMMENDATIONS 47. Ha ing considered the Bill and taken into account stakeholder views, the Committee recommends as fol s- t the National Transport and Safety Authority (Amendment) Bill (National Assembly Bills No. 36 of s) be rejected in its entirety. TFDAI,IE z- LY SIG HON. G. G , DEPARTMENTAL C ffiffi#?r+ AND ,:rAY. UCTURET. 1'lt]., BYr Cr.) 'fi.:l ilr..-,-. I -t{i q.SSEAdALY \.ID ztF[3 20ll D 1 B 20 I PaBe

Anncrrrrc l: Signcrl list o1'Mcrnbcrs u'lro attended the sittirrg th:rt consitlcrcd and adoptcrl thc rcport

REPUBLIC OF KENYA THE NATIONAL ASSEMBLY ISTI PARLIAMENT . THIRD SESSION _ 9O9{ DEPARTMENTAL COMMITTEE ON TRANSPORT AND INFRASTRUCTURE MEMBERS ADOPTION LIST ooru,....!..g..:.9i.:.e.9+#,rn*r,..?.,.1-o-..P.tl.. "no,............J.-.9.Q.P.r7................ vexur,....S.,.z.? p.r........Lo-dtt.e....,....N.q.;.y.c+.f 3r.. N.9{.134.1.r'......C.:-'..*r.!. n..*r^,.../Jo .Ph.o.::.. .ot. .1:t.t::.......N.:rh.O.n.o.l...1h.tt.>e.ct.......r*tJ....Y.x Nff",iP,,(Ti?Jf;"t ) 6;tt rN"ho "r At\t'qotJ k"tJ NO NAME SIGNATURE The Hon. GK Gc,orgc Kariuki, MP - Chairperson c The Horr. Didruus Barasa, MP- Vice Chairperson s The Hon. Kiunjuri, Festus Mwangi, MP t. Thc Hon. Abdrrl Rahim Dawood, MP c The Hon. Ararna Sanruel, MP q The Hon. Bady, Bady Twalib, MP The Hon. Francis, Kajwang'Tom Joseph, MP a The Hon. Kiaraho, David Njugura, MP \ I Thc Hon. Naicca, Jolurson Manya, MP ID L lo. The Hon. Chege, John Kirag'rr, MP (VlL-l-4* ll The Hon. Elsie Muhanda, MP le. The Hon. Saney, Ibrahim Abdi, MP 13. Thc Hon. Husseiu'Wcytan Mohanred, MP l+. Thc Hon. Jhanda Zahcer, MP l5 The Hon. Komingoi, Kibct Kirui, MP