Yangon Govt Invites Bids for Cashless Payment on Buses

By Tin Htet Paing 25 August 2017

YANGON — Yangon Region’s government invited consortium bids on Friday for a cashless payment system to service the city’s public transport system, with the aim of launching a pilot scheme next February, its tender scrutinizing board told The Irrawaddy.

As part of its effort to reform the former capital’s mass transit service, the regional government launched the Yangon Bus Service (YBS), replacing 300 bus lines under the Yangon Motor Vehicles Supervisory Committee—known as Ma Hta Tha—on Jan. 16.

The new system—operating under the management of the Yangon Region Transport Authority (YRTA)—downsized the bus lines to about 80 to stop overlapping routes and replaced bus conductors with fare boxes.

A 10-person scrutinizing board has been formed for the shift to a card payment platform – the Yangon Payment Service (YPS). It is chaired by the regional government’s planning and finance minister U Myint Thaung and co-chaired by its electricity, industry and transportation minister Daw Nilar Kyaw and Karen ethnic affairs minister Naw Pan Thinzar Myo.

The board will review tender proposals from different consortiums before choosing finalists for the regional government cabinet to consider. The cabinet will then pick two tender winners in December for the automated fare collection, U Chit Tun Pe, a board member and the principal of Tun Group Asia advisory firm, told The Irrawaddy.

“The purpose of choosing two consortiums is to create competition between the service providers,” U Chit Tun Pe said. “We are worried about service quality if there is only one group operating under the platform with no competition.”

The two winning consortiums will sign five-year contracts in the last week of December. They will issue YPS cards, and install machines and the technology for the operation, which will initially be tested on 4,000 buses.

Once the system is established, said U Chit Tun Pe, it may be implemented on the city’s new water buses depending on an agreement between the government and the ferry operator.

YBS will gradually progress to a cashless payment system, although it will accept cash in the initial months of the new system, according to U Chit Tun Pe.

The bidding consortiums can choose banks to issue cards and receive payments, but Ayeyarwady (AYA) Bank, owned by tycoon U Zaw Zaw, will operate as a settlement bank to manage payment transactions between the card issuers and bus operators, according to the tender scrutinizing board.

U Chit Tun Pe told The Irrawaddy that YRTA has authorized AYA Bank to collect and deposit bus fares into the accounts of the bus operators since YBS was launched earlier this year. It will continue to use the bank as a medium when the system shifts from manual to electronic payments.

U Chit Tun Pe declined to comment on the selection of AYA Bank without a tender process, saying that he could not answer on behalf of YRTA. The Irrawaddy was unable to reach YRTA for comment at the time of this report.