William Ojonyo, the chairman of Peleceer Group, a regional clearing and forwarding and transit cargo company, said tax incentives are the only way to support the industry’s growth.
Ojonyo spoke at the Port of Mombasa Tuesday afternoon after witnessing the arrival 15 electric buses to Kenya imported by BasiGo.
BasiGo is an e-mobility company that seeks to bring the future of clean, electric public transport to sub-Saharan Africa.
“Looking at our tax regime and the competition that comes with used vehicles and the expectation of adhering and conforming to the global trend of preserving our environment, we would be requesting the government to support the initiative and support the fact that this particular unit may not come out as a knocked down unit soon,” Ojonyo said.
“It is important to note that BasiGo wants to bring as many fleets into the country, but there is that scarecrow called the tax. We are asking the government to support this industry in the best way possible.”
This, he said, is going to be the precedent that will form how Kenya’s tax behaviour will be moving forward.
Ojonyo said that they are currently paying the Kenya Revenue Authority a 25 per cent import duty, 16 per cent VAT, 10 per cent excise duty, a 3.5 per cent import declaration fee, as well as a two per cent railway development levy when importing a vehicle.
The electric buses cost Sh5 million, and if the importer adds the taxes, the total cost rises to about Sh5.8 million. This, Ojonyo said, was making it difficult to compete with the importation of second-hand and locally assembled passenger vehicles.
“This is a matter of policy, we are engaging with KRA and are appealing to the decision makers and policymakers that would we have something that is a product that would then invite companies like BasiGo to do more than what they are doing now,” he said.
Ojonyo added that looking at importing the vehicles as completely knocked down to be fully assembled in the country may not be soon because the country still lacks the technology to do so.
He said that looking at it immediately will be scaring away the investors who would love to make Kenya first in the use of electric buses in the East African countries.
“The worst bit is that it is also difficult to be in between completely knocked down and semi-knocked down, that puts us in a precarious position,” he said.
“Otherwise, if we will have to wait for completely knocked down, it may be a long shot but again, yes, we are optimistic.”
The arrival of the 15 new vehicles follows BasiGo’s successful pilot of the first electric buses in Nairobi and represents the largest shipment of electric buses to ever enter the region.
BasiGo first launched the electric buses' pilot operation in Nairobi in March this year.
The company’s two pilot buses are said to have driven more than 120,000km and carried more than 150,000 passengers, with two separate bus operators, Citi Hoppa and East Shuttle.
"The electrification of the transport sector in Kenya is accelerating and BasiGo is proud to be leading the way,” Jit Bhattacharya, CEO of BasiGo, said in a press release sent to media houses.
The buses have been imported from BYD Automotive in China, which is currently the largest manufacturer of electric vehicles in the world.
Bhattacharya said that this new shipment is the same model of the electric bus as the pilot programme.
“These new 15 buses will soon be plying routes across Nairobi, giving residents of Nairobi access to safe, comfortable and clean public transport for their daily commute,” he said.
The new buses arrived partially assembled aboard the “Morning Christina” vessel that docked at the Mombasa port Tuesday afternoon.
From the port, they headed to Associated Vehicle Assemblers in Miritini, Mombasa, for final assembly and finishing.
Speaking at the port, Moses Nderitu, the chief revenue officer at BasiGo, said that starting next year, all-electric buses that BasiGo delivers to customers will be locally assembled here in Kenya.
“There is some localisation happening, including interior and installing of telematics going into the bus so that we start building local capacity in assembling electric buses in Kenya. Finishing the assembly of these buses here in Kenya is an important step in demonstrating that these new electric vehicles can be manufactured locally,” Nderitu said.
He added that they were currently providing operators with a ‘pay-as-you-drive’ contract where operators pay Sh20 per kilometre which he said was way lower than what they would pay for diesel.
“We are able to charge, do maintenance and even clean the buses for them as it is included in the pay-as-you-drive contract,” he said.
The company is currently installing charging points in the routes the buses operate in Nairobi.
BasiGo head of fleet operation Francis Mungai said that with a full charge, the buses can cover 250km before recharging.
“If charging from point zero, it will take about three to four hours to be fully charged. The buses currently operate from 5am to 11 pm in the evening so we are able to charge them overnight.
“With charging points strategically installed along the routes, they will no longer have to come back to the BasiGo terminal to recharge.”
Mungai said that they are going to install a telematics unit that will be able to give feedback and do live tracking and will also be able to give advance notice about any issue.
“We have an interface in the bus where you can be able to tell how much charge and how many kilometres remain for me to get to the next charging point, it has that kind of interaction,” he said.
He reiterated that the country needs to move away from diesel and petrol as fast as possible and as soon as possible because of the existing benefits from renewable and sustainable kinds of transport.
“The long-term plan for us and everyone who is passionate about climate change is that we would wish to have all vehicles operating on clean green energy,” Mungai said.
(edited by Amol Awuor)
