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Kenya Bus Services overcomes debt to shine among top firms

Kenya Bus Service Management Ltd CEO Edwins Mukabanah who has steered the firm from debt

Kenya Bus Service Management Ltd CEO Edwins Mukabanah who has steered the firm from debt

Kenya Bus Services (KBS) is a household name in Kenya’s public transport landscape.

The company established in 1934 by the Overseas Transport  Company of London changed  hands severally over the  years, including being owned  by Stagecoach Holdings Limited.

By the late 1990s, the  company was incurring losses and Edwins Mukabanah, a long time KBS employee who was working in the UK after completing a masters degree in transport planning and management, received a call to come revive the bus service.

“I  declined the  offer. The following year I got another call explaining the dire need so I decided to move  back to Kenya in August 2004,” he says.

The once prestigious transporter was in serious debts estimated at  Sh1.5 billion, had a bloated staff who had pay grievances and there were several accident cases in court.

“It was at the height of Michuki rules where every public service vehicle had to be fitted with  seat belts. This hit KBS hard because the former business model gained from both the seated and standing passengers,”  Mr Mukabanah explains.

This meant redesigning the buses to comply with the rules. “The Michuki  rules … required a lot  of  resources, ordering of extra parts and a lot of  downtime,” he says. When he left Europe, he had a plan to revive the KBS management and this saw him register the company afresh as Kenya Bus Service Management Limited.

At that time the company’s stakeholders opted to invest Sh10 million into the firm but the money was not put in lumpsum, which meant the firm had little cash to operate on.

“It was a very difficult time; I used to come to the office by five in the morning and leave at around nine in the night. We owe so much to the employees who we inherited from the other company because they went for six months without a salary,” he says.

KBS Management Ltd was last year ranked No.15 in the Top 100 — a list initiated by theBusiness Daily and financial services firm KPMG that recognises small and medium enterprises.

Today the company has grown to a turnover of more than Sh70 million. KBS operates buses on behalf of owners with a franchising and commercialisation model.

Car wash, fuelling, training, vehicle parking and an engineering workshop are offered to bus owners at a fee. Apart  from the commercialised services, KBS also displays adverts.

To have their buses listed bus owners pay a one-off fee of Sh60,000, with a commission on their gross income deducted for sustainability of the company’s operations.

“We provided bus owners with convenience. They no longer had to be bothered with council charges, arbitrary arrest and having to fuel the car every evening  because  we  would  do that for them and at the end  of the day provide them with data on how many kilometres their bus has travelled and how much has been collected through the manual ticketing system,” explains Mr Mukabanah.

While bus owners are at  liberty to  hire their own crew provided they undergo the 21-day training, the  company can kick them out if  they fail to meet required standards.

Mr Mukabanah says the cashless Tap and Go system that they have installed in their buses is proving to be a success as many of the customers find it convenient than carrying cash.

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Old Model Kenya Bus

Business Daily

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