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How city cartel rakes in billions from matatu owners

Kenya’s public transport industry loses at least Sh47 billion every year to a network of cartels that run the sector — including organised criminal gangs, rogue traffic police officers, county askaris and touts.

Public service vehicle (PSV)  owners, who do not bow to this brutally ravenous cartel, are either pushed out of business or forced off lucrative routes.

As a result, Kenya Bus Service Management managing director Edwins Mukabanah says, the cartel has pushed PSV owners to the periphery of the business income, with many opting out as others remain hostage to the syndicate.

“If you add up all the money we lose to the cartel and the lengthy compliance requirements that come with running a matatu, you can see why even the oldest operators have never grown to become multinationals despite the fact that this is a multi-billion-shilling industry that is always lucrative,” said Mr Mukabanah.

“Our crews are under siege and matatu owners are left with almost nothing, not even enough to properly maintain the buses. That is why many quit.”

Rogue traffic police officers and county askaris, illegal gangs and route cartels make the deepest cuts into the PSVs’ revenues, with each group collecting at least Sh200 from the 120,000 matatus daily.

EXTORTION RING

This means each group pockets some Sh7.2 billion a year, although stakeholders believe the figures could be much higher as some routes pay charges running into thousands of shillings.

So normalised is this theft and extortion that new vehicle owners often have no qualms paying a ‘fee’ to join a route or be allowed to pick up passengers from a designated terminus.

Investigations by the Nation showed that bus owners part with between Sh30,000 and Sh100,000 to launch operations on a route.

Gangs on some routes — such as No. 102 to Dagoretti and Kikuyu — demand the new vehicle for their exclusive use for some time before the owner can start earning from it. They also dictate who will be part of the crew of a vehicle before sanctioning its operations.

Matatu Owners Association (MOA) chairman Samuel Kimutai said the extortion ring runs deep in the sector and the crews are usually caught up in the web, cooperating to save their lives as those who fail to comply are harassed out of business or even killed.

He, however, refuted claims that PSV operators are responsible for feeding the cartel, which has given the business a bad name.

LAWLESSNESS

“Who wants to just give money for free?” Mr Kimutai asked. “Even the crew would rather keep it for themselves, but they are compelled by the system of extortionists backed by the police.

“They are helpless. Otherwise, how do you explain the role of idle men at a terminus?

“As a matatu owner, I would not just gamble with a Sh5 million investment. But I can tell you for a fact that they have totally diluted the business. We are left with the major expenses such as insurance and repairs, while the bulk of the harvest is scattered across the extortion ring.”

The cartel has disrupted order in the public transport system, encouraging lawlessness and providing protection to law-breaking crew at the various terminuses and bus stops.

They are also known to be on standby to deal with any passenger “causing trouble” to the conductors by demanding civility or respect.

At the Railways bus terminus in Nairobi, matatus reverse into the Haile Selassie-Moi Avenue roundabout as traffic police watch.

One crew member explained to us that once the required fees have been paid, they are allowed to pick up passengers from any point at the roundabout.