Audit Reveals ZUPCO Set Same Revenue Target For 12km And 720km Routes

A recent value-for-money audit by the Auditor-General’s Office on the Zimbabwe United Passenger Company (ZUPCO) revealed that the parastatal had similar revenue targets for buses plying the 12-kilometre Kuwadzana route and the 720-kilometre trip to Victoria Falls, among other routes.

The use of blanket revenue targets across urban, peri-urban, rural and long-distance routes made it impossible for ZUPCO to accurately assess route performance or align revenue expectations with operating costs.

According to the recently released report, in August 2022, all buses operating from the Belvedere depot were assigned the same monthly revenue target of ZWL$18,000, equivalent to about US$36 at the Reserve Bank of Zimbabwe’s average exchange rate of US$1:ZWL$495.

“As a result, a bus going to Kuwadzana had a similar set revenue target with buses going to Victoria Falls, Muzarabani and Domboshava,” the report states.

Auditors said the uniform targets failed to take into account differences in route distances, passenger volumes and operating costs, weakening ZUPCO’s ability to effectively monitor profitability. The report also found that revenue targets were not adjusted to reflect rapid currency depreciation.

At the Belvedere depot, for example, the ZWL$18,000 target introduced in January 2022, when the exchange rate stood at US$1:ZWL$111, remained unchanged by August 2022 despite the Zimbabwe dollar weakening to US$1:ZWL$493.

On average, buses achieved only 76 per cent of their revenue targets during the audit period. The highest attainment was 86 per cent in 2020, while the lowest was 71 per cent in 2019.

Between January and 30 October 2024, average attainment had fallen further to just 54 per cent.

The audit also highlighted inconsistencies in revenue planning, with some depots failing to set targets altogether.

No revenue targets were set at the Belvedere depot for June 2024, at the Willowvale depot for February and May 2024, or at the Khami depot for November 2019 and November 2023.

“Non-setting of revenue targets may result in ZUPCO failing to monitor revenue performance,” the report said.

While some depots significantly underperformed, others posted extraordinarily high revenue figures, exposing flaws in the target-setting system.

Ten sampled buses at the Belvedere depot recorded revenue attainment of only 22 per cent and 25 per cent in April and May 2020, respectively.

Conversely, Belvedere exceeded its August 2022 target by 1,356 per cent, Willowvale surpassed its January 2023 target by 592 per cent, Kelvin exceeded its December 2022 target by 642 percent, while the Masvingo depot achieved 1,133 percent of its February 2024 target.

Across the sampled depots, average over-achievement stood at 500 per cent, suggesting that many of the targets were unrealistically low.

The Auditor-General concluded that ZUPCO’s failure to tailor revenue targets to individual routes and regularly review them in line with inflation and exchange rate movements significantly weakened performance monitoring and contributed to the company’s inability to cover operational costs.

In its response included in the audit report, ZUPCO management attributed poor revenue performance to factors beyond its control, including Government-directed fare reductions, the loss of exclusive loading bays after the COVID-19 lockdowns and delayed payments by organisations hiring its buses.

More: The Sunday Mail