- The metropolitan area of Lagos has a population estimated at between 15 and 18 million, and was the only mega-city without a formal public transport system prior to the launch of BRT-Lite.
- Reform of the passenger transport sector was based on the creation of the Lagos Metropolitan Area Transport Authority (LAMATA) to plan, regulate and co-ordinate the supply of effective public transport.
- LAMATA was empowered to fulfill these functions through its own primary legislation, and has enacted its own subsidiary regulations for that purpose.
- Development of BRT-Lite was based on a public / private partnership, whereby LAMATA providing the operating infrastructure and security of contract, and the operator provided the rolling stock and service delivery.
- Key to the rolling-stock investment was the security of the fleet financier in respect of the revenues arising from the service; this was obtained through his controlling the ticket sales process through contracted agents.
- With no history of fare collection in Lagos, and a short lead-time to system launch, pre-printed paper tickets were selected as the fares medium for BRT-Lite; however considerable effort went into the security of their design.
- Operational experience with these tickets has been largely satisfactory, but a breakdown in control procedures facilitated over-riding fare evasion; this has since been tackled by a revision to the fares structure.
- Future fare collection development to enable the expansion and integration of the BRT network will be based on electronic smart-card ticketing, and trials are already in progress.
Scope of the Case Study
This case study deals with the Fare Collection System implemented for BRT-Lite, the bus-based mass-transit system launched in Lagos in March 2008. It also refers to other fare collection initiatives that are being developed in Lagos State.
Lagos mega-city / transport situation in Lagos
The Lagos metropolitan area has a population variously estimated at between 15 and 18 million, and projected (conservatively) to grow to more than 25 million by 2025. This would place it as the third largest agglomeration in the world, after only Tokyo and Mumbai. Already it has expanded well beyond the boundary of Lagos State into Ogun State, and this reality was formally recognized by the former President of Nigeria, HE Olusegun Obasanjo, in launching the Lagos Mega City Project in 2006 with the respective Governors of the two States.
However Lagos was then the only mega-city (defined by UN Habitat as having a population in excess of 10 million) without any organized public transport system (though those in Karachi and Dhaka had largely collapsed by the end of the last century). As such, personal mobility relied on a large fleet of (possibly 75,000) minibuses (danfo) together with much smaller numbers of midi-buses (molue) and shared taxis (kabu-kabu). Local journeys employed motor-cycle (okada) and motor-trishaw (keke), but these forms of transport are rarely seen on the main arteries.
The inadequacy of the road network (low lane length in relation to population, limited number of multi-lane arterial roads, and generally poor maintenance condition), and the relatively high level of car ownership (encouraged by subsidized petrol prices and unrestricted imports of second hand cars) exacerbated the traffic congestion inherent in this form of public transport provision. As a result the typical journey for commuters to Lagos Island from the main residential areas to the north and west of the city could take in excess of two hours, especially when vehicle breakdowns, accidents, and flooding acted to block the roads.
Lagos Urban Transport Project (LUTP)
When the new civilian administrations (at Federal and State levels) were elected in 1999, following a period of military rule, transportation was identified as one of the most pressing issues in Lagos State. Accordingly the then Governor, HE Bola Tinubu, appointed a Special Adviser on Transportation and sought development assistance from the World Bank group.
Taking forward concepts from earlier studies, the Lagos Urban Transport Project was prepared on the basis of building capacity to manage the transport system, and identifying the priority actions, investments and enabling measures for its improvement. A multi-modal transport approach was taken, recognizing the potential for development of rail and inland waterway mass-transit in integration with the core road passenger transport network.
From the outset enhanced provision of bus services was a core component of LUTP, and included the development of busway priority – though primarily as a complementary measure to the mass-transit railway proposal. Direct financing of new buses by the Bank was also given due consideration, but the main failures of the earlier Federal Mass Transit Program (finance defaults, and short vehicle lives) suggested caution in this domain.
It was also recognized that it would be necessary to exercise regulatory control over the private sector bus operators, and to introduce some order in this market where demand responsiveness had been taken to extremes. Initial actions were taken to exercise existing powers for the registration of route licenses, effectively on demand, but a policy decision was taken to introduce ‘controlled competition’ for market entry once the appropriate legislation was in place.
Whilst Phase 1 of LUTP focused on fast-return investments, such as road maintenance / rehabilitation and junction improvements, it also included the preparation of technical, environmental and social measures for possible future mass transit development that might be supported in a private-public financing framework.
Lagos Metropolitan Area Transport Authority (LAMATA)
Analysis of the transport situation in Lagos highlighted the lack of any mechanism to co-ordinate the plans and actions of the various agencies at Federal, State and Local Government levels for managing, maintaining and developing the transport network in a holistic and integrated manner. Further, most of these agencies lacked a secure financial basis for their operations with their budgets at risk from fiscal pressures and higher political priorities.
Accordingly the creation of an appropriate authority for this purpose was placed at the heart of LUTP, together with measures to ensure its sustainability through a lien on transport user charges. The LAMATA Law of 2002 established and empowered the authority, which was given jurisdiction over the conurbation in Lagos State and a declared network of primary and secondary roads that carried the large bulk of road traffic.
Unfortunately, though, the drafting of this Law was weak and failed to meet the objectives set out for the Authority under the LUTP vision. In particular, its relevant powers were limited to planning and co-ordination of public transport and making recommendations on route planning. As such, it lacked any executive capability and so was made reliant on the powers of other agencies for the actual implementation of its programs.
Nevertheless the general provisions of the Law were applied to making a Bus Franchise Regulation that provided for exclusivity of operating rights on a defined route or in a specified area under an open and transparent tendering regime.
Pilot Bus Franchise Scheme
The implications of introducing a controlled competition regime for the core road passenger transport in Lagos were explored in a detailed study undertaken in late 2003. This identified inter alia that the structure of the road transport industry was not then readily amenable to regulatory control, and held the power to block any attempts at reform.
Further the private operators were also not in a position to make the necessary investments in larger buses, whose reduced numbers (in comparison with minibuses) would act both to reduce congestion and whose greater capacity would raise productivity and hence offer the potential of lower fares and / or enable scheduled services (as opposed to traditional fill-and-run) at the same fare.
After an extended period of consultation with, and education of, the leadership of the operator unions and associations, agreement was reached to test both the regulatory reform and the fleet investment in a pilot scheme using the private-public financing framework envisaged in the establishment of LUTP. LAMATA would provide the enabling framework, including traffic systems management measures in the corridor and the provision of passenger terminals and a depot / workshops complex for the new fleet, whereas the operators would accept the regulatory enforcement and commit to the procurement of appropriate buses.
A feasibility study for the implementation of this pilot scheme demonstrated its potential viability, and prepared action plans for affected stakeholders as well as the detailed agreements between the various parties. The financial evaluation predicted that new buses financed over a 4-year period at prevailing interest rates would generate a surplus at the lowest level of fares then observed in the corridor, and still be able to pay a substantial access fee to the scheme promoter. Operator participants would then enjoy high returns for the remaining economic life of the buses, and so a sustainable industry would begin to emerge.
BRT Feasibility Study
Coinciding with the conclusion of the pilot bus franchise scheme feasibility study, but prior to its implementation, LAMATA decided to develop its concepts further through the addition of segregated running ways and advanced traffic management to the enabling framework and so bring this up to the emerging standard of bus rapid transit in developing countries.
Accordingly a feasibility study for this methodology was commissioned, and commenced work in October 2006. The objective of the study was to achieve:
- efficient level of service (low cost, high frequency, high speed, high occupation, high safety, low emissions),
- adequate institutional framework and regulation,
- high socio-economic benefits, especially for low income population,
- maximum level of private participation
- minimum level of public expenditures and liability, and
- adequate mitigation of environmental and social impacts of the BRT system.
Federal Government and its agencies
The Federal Government and its agencies are relevant to the development of road based mass transit in Lagos at a number of different levels.
Firstly, the main arterial roads in Lagos State are actually Federal roads, thus falling under the remit of the Federal Ministry of Works and Housing acting through the Federal Roads Maintenance Agency (FERMA). However, fortunately for the implementation of BRT-Lite, the transfer to State control of Ikorodu Road and Western Avenue was confirmed by the former President in August 2006 as a response to the concerns of the Governor regarding its maintenance condition at that time. As such, there was no need to reach a Memorandum of Agreement for their development, a process that might well have proved extended based on previous experience in the sector.
Secondly, the regulations governing the operation of road transport need to be in compliance with the relevant Federal legislation. For example, the standards for the use and construction of motor vehicles are set out in the National Road Traffic Regulations of 1997, empowered under the Federal Road Safety Commission Act. These Regulations also established the Federal office of the State Director of Motor Vehicle Administration with powers inter alia to set the maximum and minimum fares that may be charged for stage carriage (local bus services). In principle, where there is conflict between State and Federal legislation, the latter prevails.
Finally, effective enforcement of regulations ultimately rests with the powers granted to the Nigeria Police Force, which is a Federal body even though it is organized on a State basis. Whilst officers of State agencies do have a limited enforcement capability, they don’t hold the power of arrest and some of their actions require the accompaniment by a Police officer.
Lagos State Government (LSG) and its agencies
Clearly the key LSG agency in respect of BRT development is the Lagos Metropolitan Area Transport Authority (LAMATA), and its role will be examined in the next section. However other agencies are also relevant in respect to various aspects of the planning and implementation of the system.
Firstly, BRT-Lite development needed to sit within the context of land-use and spatial development in the State. Ongoing master plan development was to feed from, and BRT feed off, this plan. To ensure that synergy was maximized a senior planner from Lagos State Ministry of Physical Planning sat upon the BRT Steering Group. Issues such as the development of the Marina area and Ikorodu Town north of the BRT terminal would be heavily influenced by the ability of BRT to bring improved accessibility and the influence it would have on the physical design of such areas.
Secondly, transfer of the control of the Federal highway over which BRT-Lite operates to Lagos State now involves the relevant Ministries of Transportation and of Works. Despite BRT-Lite being an LSG initiative, the co-operation of these bodies could not be taken for granted. As a result, for example, the decision was taken for the BRT-Lite infrastructure construction to be contracted direct by LAMATA and not through the Lagos State Ministry of Works.
Powers for the primary traffic management and enforcement in the State lies with the Lagos State Traffic Management Authority (LASTMA), a body that reports to the Commissioner of Transportation. Co-operation between the two authorities has improved markedly in recent years, and LASTMA were prepared to commit the significant resource to the BRT-Lite scheme needed to protect the exclusive use of its infrastructure and to manage traffic conflicts in the box junctions at the various highway merges and demerges.
Finally, the support of a State initiative ‘Kick against indiscipline’ (KAI) could be called upon to help with public management within the BRT-Lite system, particularly at the stations and terminals. This covered aspects such as trading and hawking on the walkways / sidewalks, and orderly queuing at the bus stops and vehicle parks (terminals).
LAMATA as regulator and sector sponsor
As noted earlier, the original powers granted to LAMATA in the domain of passenger transport had been limited to its planning and co-ordination and not to its actual regulation. Whilst a Bus Franchise Regulation had been made under s.21 of the LAMATA Law, there were doubts as to its validity on that basis and, despite its having been signed by the Governor, it was never submitted to the Lagos State House of Assembly for formal approval.
However the revised LAMATA Law, passed by the House in late 2006, defined its function inter alia to ‘plan, regulate and co-ordinate the supply of adequate and effective public transport in all travel modes and supporting infrastructure within metropolitan Lagos’ and granted specific powers to make regulations (with the approval of the Governor) with respect to its functions. This now made the role of LAMATA as the sector regulator unambiguous.
The Law also granted powers to the Authority inter alia to ‘prepare plans for the management and development of transportation in metropolitan Lagos’ and, in conjunction with the Ministry of Works, to ‘construct, re-construct, maintain and manage transport infrastructure and facilities’ necessary for the discharge of its functions. This legislation thus empowered LAMATA to act as the sponsor and promoter of mass-transit schemes in Lagos, and hence to develop the BRT-Lite system.
NURTW and the transport industry
Administration of road passenger transport operations in Nigeria falls, by law, under either of two separate organizations – the Road Transport Employers Association of Nigeria (RTEAN) and the National Union of Road Transport Workers (NURTW). Over time RTEAN, which represents mainly owners’ interests, came to dominate the inter-urban and large-bus sectors. NURTW, with a focus on the transport operatives, dominates the urban and small-bus sectors.
Whilst NURTW is a national body, it is organized along State lines with each having its own Council and related administrative functions. The operational level of the Union is managed at its Branches, which divide the network into zones based on the principal terminals (known locally as vehicle- or lorry-parks). Routes (lines) are controlled by the relevant branch(es), with vehicles paying fees for registration and each terminal departure. Vehicles queue in turn for boarding, and only leave the terminal when full (in the direction of predominant travel, at peak times). NURTW exercises little control over operations once vehicles have left the terminal, and most services board and alight passengers on demand along the line of route.
The large majority of the small commercial buses that dominate the transport supply are operated not by their owners, but rather by individual drivers who pay a daily rental fee (‘deliver’) to the owner for the use of the vehicle. The driver meets all the direct operating expenses, such as hiring a conductor, buying fuel, making minor repairs, and paying system access fees (including extortion by enforcement agencies). The owner retains responsibility for maintenance and major repairs, and covers fixed costs such as finance, licensing and insurance. As such the relationship is analogous to an operating lease for the use of the vehicle, and is standard practice for the sector within the region.
Road Traffic Regulations
Both Federal and State legislation set out standards for the use and construction of motor vehicles, but these are not consistent.
The Federal regulations are broadly appropriate for a standard single-deck bus or coach, but height and length limits effectively preclude double-deck or articulated buses. The specific standards in respect of omnibuses that relate to passenger access and comfort levels (height of steps, size and spacing of seats, etc) are well below international norms, but place no barrier to the implementation of a higher quality of service where desired. One minor anomaly, though, has arisen from the incomplete metrication of earlier imperial standards where the carrying capacity of the bus is calculated based on an average passenger weight of 168kg (rather than 76.2kg, being equivalent to 168lb).
By contrast, the State regulations (based on a Road Traffic Law dating back to 1949) represent an obsolete set of standards where the maximum vehicle weight is restricted to 8 tons, with only 4 tons being carried on any one axle. Whilst there is provision in the regulations for granting of exemptions in respect of these weights and certain other restrictive standards, the maximum overall width of a bus is mandated at only 8’0” – slightly less than the international norm of 2.5m. As the regulations have not been metricated, though, there is no anomaly in respect of the authorized passenger capacity.
Regulation of passenger transport services
The current LAMATA Law not only provided for the re-establishment of the Lagos Metropolitan Area Transport Authority with appropriate functions and powers, as reported above, but also repealed the Public Transportation (Commuter Buses) Registration and Restriction Law of 2004. That had been a very poorly drafted, and wholly unenforceable, Law that had effectively rendered all operators other than Lagbus Asset Management Ltd (Lagbus), a Lagos State Government initiative, as illegal.
Not only had the coexistence of that Law and the Bus Franchise Regulation under s.21 of the first LAMATA Law led to confusion, it had also been interpreted to confer regulatory powers on Lagbus that would be in conflict with the establishment of LAMATA itself. Its repeal, therefore, had been an essential component in securing the exclusivity of operations required for the viability of the BRT-Lite scheme.
Bus Rapid Transit ‘Lite’ (BRT) Regulation
This Regulation was gazetted to coincide with the launch of BRT-Lite, but its content had been the subject of a public education campaign in the period immediately beforehand. Its application covered the complete Right of Way within the corridor, and so included not only the BRT-Lite running lanes but also the parallel general traffic and service lanes and the walkways / sidewalks.
The primary provision of the regulation was the prohibition of operation of vehicles other than those franchised for the BRT-Lite scheme (and certain emergency services) in the designated infrastructure. However other supporting provisions were designed to facilitate the free movement of traffic in the reduced roadway capacity alongside the BRT-Lite running lanes, principally the restriction of other commercial buses to the service lanes only and a total prohibition on heavy commercial traffic in the peak hours.
Whilst this regulation was made under the powers granted to LAMATA in its re-establishment, it was also formally approved by the Governor so as to preclude any challenge from other vested interests. It thus acted as the final regulatory security to the BRT-Lite scheme.
At the current state of development and consolidation of the passenger transport industry in Lagos, there was no single private-sector undertaking capable of operating the BRT-Lite system on its own – far less a range of potential operators to whom this opportunity could be tendered. As such, it was agreed that this scheme would include an operator development function in partnership with NURTW under the private-public financing approach envisaged for mass-transit in LUTP.
Building on the model developed for the Pilot Bus Franchise Scheme, NURTW established a special purpose entity for the actual operation of BRT-Lite – Lagos NURTW (1st BRT) Co-operative Society Limited (referred to forthwith as FBC, standing for 1st BRT Co-operative). Whilst this entity remains a wholly owned subsidiary of the Lagos State Council of the National Union of Road Transport Workers, it is managed on an arm’s-length basis with day-to-day control vested in the 50 or so members who subscribed equity at its launch. Subsequent members may only be admitted to the Society by agreement with those already included, and on payment of the same equity subscription.
During this developmental phase, it soon became apparent that NURTW actually lacked the relevant experience for the operation of a large-scale scheduled bus service. In effect their sector skills had been based on the management of terminals, with vehicle queuing and passenger boarding being their priorities, with little or no control along the line of route. LAMATA realized that they would have to step in to provide the relevant expertise, and recruited a Senior Specialist Public Transport from one of the major private-sector bus and coach operators in Nigeria for this purpose.
In addition to this external advisory function, it was also recognized that a number of the specialized activities of a large commercial passenger transport undertaking would need to be outsourced. First of these was the vehicle maintenance function, where the vehicle supplier was required to provide full technical support covering both trained personnel and spare parts stockholding. Second was financial management, where the bank recognized the critical nature of cashflows during the early years of the scheme and needed to control its risk exposure. Third was operational management itself, with this being outsourced to a specialist business handling 1,600 vehicles and 2,600 drivers across Nigeria and covering the full range of human resource issues.
The initial service offer was predicated on the number of buses that were available to FBC at the date of launch. Two services were planned, one covering the full length of the corridor from Mile 12 to CMS / TBS and the other duplicating this over the inner half of the corridor from Moshalashi. At an anticipated peak round-trip running time for the full corridor of 150 minutes, and 70 minutes for the inner part, the 100 buses could provide an average 2-minute headway in the outer half supplemented by a further 15 buses per hour on the inner section giving a combined average headway of 80 seconds.
However it was recognized that predictions of travel usage patterns derived from the modeling of exclusive operation on the full BRT corridor, and with a slightly different fares structure, could not be relied upon absolutely. Further, the actual round-trip running times involving full passenger boarding and alighting was likely to be longer than that identified during the shadow runs prior to launch. As such it was decided to retain a degree of operational response flexibility by commencing service only on the full route and with the buses allocated to that; the remaining buses could then be deployed in the most effective manner identified.
The planned hours of operation were for a full service offer from 06:00 to 22:00 on weekdays and Saturdays, and a reduced offer with a delayed start on Sundays. Provision was made for reductions in the inter-peak service offer, recognizing both the lower levels of demand and the higher productivity of the buses (120-minute round-trip) at these times. The extent of this service reduction, though, was again made flexible in response to the observed travel behavior after launch.
Road crew rostering to provide this service offer was based on an 8-hour day, worked 6 days in the week, with an additional shift on alternate Sundays. Teams of two pilots are permanently allocated to each bus, so as to retain accountability for operational damage and technical abuse, but a small pool of a further 10% of staff is held in reserve to cope with sickness and absenteeism. The bus officers (conductors) are rostered separately to the pilots so as to minimize the impact of absence on service availability and to avoid collusion in malpractice developing between regular partners.
Two contrasting approaches have been taken to the financing of the large buses needed for operation of the BRT-Lite system. On the one hand, 100 new buses were procured by the private sector without any direct public support. On the other hand, 120 buses were procured by a State-owned company and then leased to the private-sector operator, or operated directly by itself.
As noted earlier, NURTW had been established primarily to represent the interests of the operatives in the passenger transport industry rather than those of the vehicle owners. However, over a period of time, senior officers of the Union began to acquire significant fleets (up to 30 minibuses in one case) that they operated within the system that they controlled. With operational advantages, such as queue jumping at terminals and avoidance of revenue scalping by touts, this had proven to be a lucrative sideline to their official functions.
As a result, NURTW began to explore the options for acquiring large buses, and so challenge the dominance of RTEAN in this sector and on the longer-distance routes. Some buses were purchased second-hand, but proved difficult and expensive to maintain without manufacturer support and so became increasingly unreliable and unprofitable. Clearly a different approach was needed if the planned breakthrough was to be made.
The question of financing still remained problematic, though, with the experience of earlier initiatives to encourage fleet investment (both at the Federal and State levels) not having proved sustainable, and hence acting as a deterrent to banks for their involvement in the sector. Nevertheless some banks and non-bank financial institutions (NBFIs) were prepared to engage in the development process, and risk-management measures were devised to allay their concerns. Principal amongst these was the security of repayment to the financier, and this was addressed in two ways:
Firstly the scheme design gave the bank the initial lien on revenues collected from services, with only the balance (after the deduction of financing costs) being passed through to the operator. Where fares were collected on the bus, these would have to be paid in at the depot on a daily basis (as in any conventional bus undertaking). Where fares were pre-collected off the bus, the bank would be given the right to act as ticket distributor and security monitor. The latter option was selected for BRT-Lite, as the relatively small number of stations made the provision of a secure boarding environment much easier than in an externalized network.
Secondly the scheme design required the participating operators to accept collective liability for all the obligations that they had entered into. Any individual default, whether by peculation of revenues or through vehicle unavailability (perhaps as a result of an accident or mechanical failure), would be made good by an additional charge on all the remaining members. Where the default was fraudulent, the individual would also lose his deposit / collateral (though this was deliberately not set at a level that provided full security so as to avoid this being deterrent to participation in the scheme).
Despite all of the above, still no financial institution chose to make good on its expression of interest in participating in the scheme. The vehicle supplier eventually resolved this matter by offering to accept deferred payment over two years, provided that a local bank underwrote the counterparty risk. This arrangement was agreed to by Ecobank Nigeria plc, but it in turn then required the lodging of collateral personal guarantees from senior officers of NURTW in order to mitigate that risk exposure. Fortunately the levels set for these guarantees were proportionate to the affordability of those who had to provide them, covering less than 10% of the total transaction value, and so could be put in place.
In parallel with the integrated transport sector development being led by LAMATA, the Lagos State Government had sponsored a parallel initiative for Lagos Metropolitan Priority Bus Services that was also intended to address the public transport deficit.
An initiative in 2003 to develop an exclusive bus service in Ikoyi and Victoria Island had foundered within days of its launch as a result of the lack of capacity provided by its operators City Bus Ltd and Labor City Transport Services Ltd. The lesson drawn from this was that the Government would need to provide the rolling stock for future programs, even though the buses would still be operated by the private sector.
Accordingly Lagbus Asset Management Ltd was established as a wholly State owned enterprise for the purpose of procuring buses for lease to private operators, with the vision that this company would then earn revenue for the State in the near term and also develop a track record for flotation once its developmental role had been fulfilled. To support the take-up of these buses, Lagbus also identified a priority bus network for the metropolitan area over which they could be deployed.
Unfortunately, though, Lagbus failed to consult adequately with the transport operating industry in making its vehicle selection for procurement. As a result, all of the main passenger transporters in Nigeria declined to participate in the scheme under the terms offered to them. Faced with this reality Lagbus had little choice but to launch its own operations so as to defray some of its costs, and a pilot service was launched in late 2006 on the Third Mainland Bridge axis from Ikeja to Lagos Island.
Once BRT-Lite had launched, however, and passenger demand could be seen to have overwhelmed the transport supply provided by the original 100-bus NURTW fleet, the decision was taken to lease an additional 70 buses from Lagbus. When demand further increased as a result of the temporary closure of the Third Mainland Bridge for essential maintenance works, another 50 buses were added to the operation.
Fare collection system
The BRT Feasibility Study had demonstrated the potential viability of the system using a coarsely graduated or zonal fare structure of N20 per 5km of travel, or part thereof. Thus the BRT-Lite service from Mile 12 to Lagos Island would attract a fare of N80, with intermediate fare stages at Maryland, Fadeyi, and Alaka each charging N20 less than the previous. These fares were highly competitive in comparison with even the lowest existing fares on the small commercial buses, and offered passengers the additional benefit of a faster journey time.
However, in planning the BRT-Lite service offer, it became apparent that some suppression of short-distance travel demand would be required to avoid the overwhelming of the available fleet. As such, a decision was taken to coarsen the fare graduation even further to 10km bands. This would have the additional advantage of leaving only one fare-stage boundary on the pilot route (Fadeyi), and thereby simplify the monitoring and management of over-riding.
In setting the fare levels to be charged on BRT-Lite, though, cognizance had to be taken of the actual finance arrangement that had been reached for the supply of the NURTW buses rather than the 4-year tenor that had appeared to be available. Reworking the cashflows to allow for this change required that the maximum fare be raised to N100, with the minimum fare then becoming N50. These changes were not predicted to affect patronage in a significant way, though, as fares would still be fully competitive with the small commercial buses.
The revenue collection methodology that was selected for BRT-Lite was also dictated by the needs of Ecobank, primarily to manage their counterparty risk for the vehicle financing. NURTW accepted that Ecobank would collect all revenues on its behalf, and create a sinking fund to meet the scheduled remittances to the vehicle supplier. The residual cashflows after the appropriate deduction would then be available to the operator to meet his direct expenditures in respect of staff and fuel, etc. However such expenditures were to be monitored and pre-authorized by a Steering Committee, which included three representatives from LAMATA, with Ecobank acting as its Secretary.
It was decided that tickets would be sold to passengers prior to boarding, and be verified both at the entry to the bus station and on board the bus (where they would then be cancelled by a bus officer). This was the approach that had already been taken by Lagbus for its own operations, but a range of security features were to be incorporated in the ticket printing to reduce the opportunity for forgery. Ecobank appointed 10 sales agencies (since increased to 12), who would earn 4.5% commission on the sales they generated. An inter-agency agreement was reached to equalize their sales opportunities in recognition of the varying patronage levels at different stations.
The tickets employed are a three-part design, with two parts sold to the passenger and one retained by the actual vendor. The two-part set is presented at the bus stop, and one part exchanged for entry to the waiting area; the remaining part is then presented to the bus officer for cancellation on the vehicle. The tickets are color coded for ease of identification by the officer or an inspector, with one color for the N100 ticket being valid throughout the system and two separate colors for N50 tickets only being valid in the inner and outer zones respectively.
The principal security features are:The pre-printed tickets incorporate a wide range of security features designed to deter the duplication and forgery that might have been anticipated in the Lagos environment. Further, the tickets are printed in a secure environment meeting the standards of the Central Bank of Nigeria for the production of check-books. The printer operates internal control procedures that provide an audit trail throughout the production process, and monitors all aspects of production with CCTV cameras.
- The tickets are printed on Central Bank Clearing System paper that is not available to commercial printers. This paper is watermarked, has a dull finish, and responds distinctively to ultra-violet light.
- The background design of the main ticket is complex, and not easily copied.
- The serial numbering of the ticket uses penetrating ink, such that any alteration of the number on the front is immediately apparent on the back.
- A spot on the ticket is printed with thermo-chromic ink, such that its color changes when squeezed between the fingers. This cannot be replicated by any photo-copier.
- The latest versions of the tickets also incorporate a customized hologram (not shown on sample).
To support the arrangements for revenue integrity in the ticket sale and verification process, a small team of inspectors is employed for random ticket checks within the system and Ecobank has also established its own monitoring and control procedures for its sales agencies.
The inherent security of the pre-printed tickets has been proven, with no systematic attempt having been made for their professional forgery. The few amateur attempts made were quickly detected, and that line of attack appears to have been abandoned.
However attempts have been made to recycle tickets that have not been properly cancelled, and reselling them to new customers. However this fraud can only work when proper procedures are not being followed, and so is relatively simple to detect. Appropriate action has been taken by the sales agency, and disciplinary procedures have followed.
One weakness that can be exploited, though, is the lack of capacity at some BRT-Lite bus stops that results in bus queuing at peak teams and boarding being permitted upstream of the stop without passengers passing through the barriers. This problem only exists at certain times and locations, and can be tackled by additional station inspectors.
The greater problem is attempted over-riding beyond the zonal boundary, whereby passengers attempt to complete a 2-zone trip on a 1-zone ticket. Intensive ticket inspection at the zonal boundary has been implemented, and a number of short-turn services have been introduced so that short- and long-distance travelers can largely be segregated.
The problem was exacerbated by the 2-zone ticket initially being priced at twice that of the 1-zone ticket, and the practice becoming accepted that two 1-zone tickets could be presented in place of a single 2-zone ticket. This practice became so widespread that many sales agents ceased to stock 2-zone tickets, leaving intending customers with no choice but to follow.
In many cases, dishonest passengers managed to have only one of their two tickets cancelled, leaving the other available for future use. Also the color-coding system for quick visual identification of travel authority within each zone became frustrated, making the task of ticket inspectors that much harder.
Fortunately the first authorized fares increase added N20 to the price for each zone, and thus broke the 2 to 1 price link. With an added cost of travel for using two 1-zone tickets in place of a single 2-zone ticket, this practice seems largely to have disappeared.
As the BRT network expands in Lagos, and their services become integrated (and inclusive of high-capacity tributaries), it is no longer tenable to continue with a simple 2-zone pre-printed ticketing system into the future.
Accordingly Lagbus has started to experiment with electronic smart-card ticketing on its own route network so as to gain operational experience. With a distance-related tariff structure, it has needed to incorporate automatic vehicle location technology for the calculation and decrementing of fares when boarding and alighting.
Unfortunately, though, the separation of the ticket validation and vehicle location functions in separate devices has enabled attack on their inter-communication with resultant system failures. Integrated fare-validation readers have been identified, but have yet to be implemented.