Why Is The Fare In Obsolete And New Buses The Same?

Reports of new bus acquisitions by Baku’s bus companies are interspersed with news of breakdowns and malfunctions. Two major companies, Bakubus and Xaliq Faiqoğlu, bring in new comfortable buses. However, according to 2021 official data, there are 21 bus passenger transportation companies in Baku.

The mentioned two companies operate modern buses. The remaining companies put old, sometimes unsafe buses on the routes. Even among the fleet of leading carriers, up to half of the buses need major repairs or have exhausted their technical resources.

The buses vary – from new air-conditioned ones to dangerous ones. About a third of buses in Baku and its suburbs still lack terminals for card payments. Nevertheless, citizens pay the same fare, regardless of the bus condition.

Starting July 1, 2024, bus fares increased to 50-70 qepik (0.50-0.70 manats), depending on the route and distance.

Before the fare hike, bus company owners complained about the lack of funds for purchasing new vehicles. Three years ago, information was published about some carriers selling buses due to the unprofitability of the business.

New buses are indeed expensive. A 12-meter bus (90 passengers) from the Turkish manufacturer Otomotiv Sanaye ve Ticaret A.S. costs the company starting from 519 thousand manats, including tax. This figure does not correlate with the cost of buses purchased by order of President Ilham Aliyev on August 8, 2018, where 28.2 million dollars (50 million manats) were allocated for the purchase of 300 buses for the Baku Transport Agency (BTA). The cost of one bus was 160 thousand manats.

Questions also remain about the honesty and efficiency of businessmen in the urban passenger transportation sector. Companies and the Baku Transport Agency (AYNA) do not provide data on the daily number of passengers transported and the revenue. But it is possible to calculate, using published data on the monthly volume of passenger transportation in Baku and the number of buses.

According to AYNA, 127.5 million passengers are transported in the capital monthly. Only Bakubus (23% of the market) transports more than 350,000 passengers per day. AYNA Chairman Anar Rzayev reported that nearly 2,000 buses operate in Baku, with a need for 2,200 buses. Therefore, each average bus serves 67,350 passengers per month. With the new fare of 50 qepik, this means nearly 32,000 manats in monthly revenue per bus. Leaving half of this amount for driver and staff salaries, fuel, and maintenance, one bus can generate about 16,000 manats per month for the company. Therefore, in three years, the profit from one bus equals the cost of one new Turkish bus with a capacity of 90 passengers (about 600,000 manats).

In this case, we calculated the revenue from operations on intra-city routes, transporting passengers for 50 qepik. Suburban routes serve citizens for 60-80 qepik, depending on the route length. Consequently, with the new tariffs, profitability on long routes is 20-40% higher. But the quality and comfort of buses on suburban routes are much worse than on urban lines, with 10-20-year-old buses falling apart due to moral wear and tear, although the trip outside the city costs more. Among them are Daewoo International, Isuzu buses purchased by the president’s order in quantities of over a thousand units starting from 2007. The total contract value was 11 million dollars. At current prices, one bus cost 22,000 manats.

Simple calculations show that with effective and transparent management, without the corruption component of the passenger transportation business, and obtaining bank loans, companies can timely update their fleets so that passengers do not suffer in the heat without air conditioners and can pay for travel using cards.

Turan sent an email to the Ministry of Digital Development and Transport requesting a response to the issue raised in the article within 24 hours. No response was received.