Despite High Operating Costs, CEO of Yangon’s New Bus System Remains Optimistic
By The Irrawaddy 18 December 2017
YANGON— Dubbed one of the first big reforms made by the National League for Democracy government in Myanmar’s financial hub Yangon, a new public transport system known as the Yangon Bus Service (YBS) will turn one next month.
The new system was aimed at replacing the former capital’s old bus service—the Rangoon Motor Vehicles Supervisory Committee, also known as Ma Hta Tha—notorious for its worn-out fleets, unruly drivers, and conductors known for verbally and physically challenging any passengers who dared complain about their services.
Blessed by Yangon Regional Government head Chief Minister U Phyo Min Thein, YBS was heartily welcomed by the city’s commuters who had grown weary of Ma Hta Tha’s poor services despite its successor’s bumpy start. The early days of YBS saw an insufficient number of buses traversing the routes, resulting in overcrowding at bus stops, as some buses scheduled to start on the first day of the service were not ready due to insufficient planning.
Nearly 12 months later, with newly imported yellow and red city buses plying the busy roads of Yangon, the regional government seems committed to making the new system a success.
At the helm of YBS is its CEO, Saw Bo Bo. A former cooperate banker at Citi and KBZ banks, the 35-year old has more than 10 years of international business experience. At Citibank, he closely followed Myanmar’s economic and political transformation as part of his job grading the country’s credit rating in 2014 and 2015. One of his areas of expertise is mergers and acquisitions, an aspect of strategic management that involves combining companies and unlocking synergies to help the new entity grow in a sustainable manner—making Saw Bo Bo a good choice for YBS, a public company made up of 15 units, including government firms.
On the eve of YBS’s first anniversary, Saw Bo Bo responds to The Irrawaddy’s questions about the bus system that is currently used by the city’s 2.5 million commuters on a daily basis.
What is your assessment of YBS today?
The most visible thing is commuters are enjoying the new buses. You can say our bus fare—200 kyats—is probably the cheapest in the world. The government has imported 1,000 new buses. Another 1,000 will join the fleet next year. We have also taken serious action against those (drivers, bus owners, operators) who violate our regulations. As we have opened a diverse range of complaint channels—social media, call center and a mobile reporting app—passengers can now file their complaints much more easily than before. As a result, we have had some 5,000 reports. We take action on those complaints—in a real time manner if needed—lest we disappoint our passengers. Mobile teams are now in action to check to see if bus operators follow the regulations.
How many buses are running under YBS? Please tell me in detail how the government invests money in the system.
So far, there are 95 lines. The number of buses approved by the government is nearly 3,000. Under YBS, there are 15 bus companies and 17 individual operators. The Yangon Regional Government has provided 80 percent of the needed investment, or 35 billion kyats each in Yangon Urban Public Transportation Public Co., Ltd (YUPT) and Yangon Bus Public Co., Ltd. (YBPC). We imported 1,000 yellow buses—500 for each company—at a cost of US$56 million from China. Currently, both companies are running fleets of 700 buses. Another 300 will hit the road soon.
Why Chinese buses? There has been criticism that those buses are about half the price of international rivals and they will wear out and need to be replaced sooner than international standard vehicles.
We had to think holistically before the purchase. The price gap is true. On the other hand, we also had to think how much we could invest and the number of buses we would need. Whether they wear out sooner depends on the road conditions as well as the maintenance they get. If we reach breakeven in the next five or six years and manage to turn a net profit in another four years, I think we’ll have a sustainable business with those buses.
The grandson of former dictator Ne Win is also an operator of YBS. There are also reports that another tycoon, U Zaw Zaw of Max Myanmar, is joining in. Please explain their involvement?
Omni Focus Company run by U Kyaw Ne Win has applied to run 500 red buses. So far, more than 100 buses owned by the company are on the road. Max Myanmar will operate as Ludu Mateswe (People’s Friend) in cooperation with Power Eleven Company. They will run 500 red buses as well soon.
What are the challenges YBS is facing?
Bus operators still can’t manage the operational cost. It has impacted their profit margins as 75 percent of the revenue goes to covering costs. If we could raise operational efficiency, it would be OK. With the guidance of the chief minister and cooperation from the operators, this problem can be overcome.
Has Daw Aung San Suu Kyi made any comments about YBS?
I just met her on Friday at a Karen New Year Day celebration event. She told me to make YBS successful. Given the system’s outreach—2.5 million commuters mostly at the grass root level— all of Myanmar’s leadership will surely want to see it as a success story.
YBS is under the Yangon Region Transport Authority (YRTA), an umbrella organization for transportation in Yangon. We learned that an YRTA law has been drafted. Any updates?
Yes, it’s now underway with input from JICA (the Japan International Cooperation Agency) and the ADB (Asian Development Bank) based on models other countries are using. It will lay a foundation for self-sustainability for the future of Yangon’s transportation as it will include organizational structures, roles and responsibilities in detail. For YBS, for example, the law will help provide a more systematic approach when it comes to job scopes and contract terms for the operators.
How is it running currently in absence of the law?
The YRTA is chaired by Chief Minister U Phyo Min Thein. The president is Electricity, Industry and Transportation Minister Daw Nilar Kyaw. For YBS policies, they are discussed at YRTA meetings and implemented with the endorsement by the Yangon Region Government.