The population of Vitebsk, the fourth-largest city in Belarus, – 382,000 – is estimated to have 416,000 by 2030 under 0.86% population growth projection. Vitebsk is one of six free economic zones (FEZs) in Belarus where the government allows international investments under special conditions to boost the Belarusian economy.
City transport in Vitebsk consists of buses, trolleybuses, trams, and minibusses.
The fare is paid directly in the transport. On a bus, a trolley bus or a tram you can buy a ticket from the conductor, who works directly in the cabin of the vehicle or at newsstands. There are also monthly tickets for 1 or 2 types of transport.
Rely on Loan
17 Dec 2019 neweurope.eu
China has agreed on 16 December to give Belarus a $500-million loan.
Belarus relies on energy and loans provided by its main ally, Russia, which has recently reduced its lending
The ministry said the loan will be provided by the China Development Bank and will be used to repay foreign debt.
Automatic Fare Collection (AFC) system as a crowdfunding tool
The AFC system can bring good cash flow to the public transportation system as there are a deposit and unused value on each passenger card. Every million passengers will contribute over US$ 1 million in cash flows based on our study. There will be US$ 382,000 in cash flows for Vitebsk to invest in infrastructure.
Besides stopping fake money and driver’s fraud, the AFC system will bring in recurrent income from transaction fees. Every million passengers will bring US$ 5 million in income per year if the transaction fee is 5% based on our study. So, there will be US$ 1.9 million in income per year for Vitebsk and it is expected to become US$ 2 million by 2030.
Profitable Business Opportunity
Although Belarus has a GDP per capita of US$ 6,604 in 2019, there is a social need for public transportation improvement especially in Vitebsk with a 382,000 population.
From the lesson from different countries, the improper financial management of public transportation can be improved by introducing an AFC system.
With all these tram, bus and trolleybus, it is hard to finance an expensive AFC system.
Relying on loans from foreign countries cannot be sustained because inherent problems such as shortage of cash notes, driver’s fraud, and fake money for public transportation are not resolved.
However, with a low-cost AFC, it must generate sufficient revenues for its financial sustainability, to continually service the ever-expanding social and economic demand.
The writer is a frequency traveler. For more detail, please visit autofare.net.