The Competition Regulatory Authority (ARC) has flagged the accumulation of roles as both referee and player by TCUL, which directly participates in three stages of the market chain, and has suggested a reformulation of the shareholder structure of the National Integrated Ticketing Company (ENBI).
Created in 2021 to modernize the commercial system and ticket sales across the road transport network, the shareholder structure of ENBI — a public limited company comprising IGAPE (Institute for the Management of State Assets and Holdings) with 85.2% of the capital, and the public company TCUL (Luanda Urban Collective Transport) with 14.8% — conflicts with competition rules and limits the normal development of the market in the road transport segment, according to a study on the “Assessment of the Competitive Profile of Public Policies”, conducted by ARC.
TCUL’s presence in ENBI places the transport company in a privileged position compared to other public and private operators, accumulating the roles of referee and player, while any potential profits from ENBI — which so far remain merely hypothetical — could amount to a form of public subsidy to TCUL, distorting the market.
ENBI was created to manage the National Integrated Ticketing System (SNBI) and the revenues generated, which are to be subsequently distributed to the operators. The major project involves the implementation of a social pass system (called “Giramais”), mainly targeting students, to mitigate mobility challenges faced by that social group.
“The integration of TCUL into ENBI’s shareholding structure poses a competition problem, as in addition to this status, it must be taken into account that TCUL is also an operator of the regular public passenger transport system,” notes the ARC.
The entity responsible for enforcing and overseeing the country’s competition law also states that this ENBI structure places TCUL simultaneously in three stages of the market chain — “namely, in the provision of regular public passenger transport services, in the sale of tickets for services provided by its competitors, and in the distribution of revenues to operators.”
“This structure gives TCUL an advantage over other operators, as it holds the power to influence the functioning of the SNBI to its own benefit. As a market operator, it also acts as manager and operator, a configuration that is detrimental to other market participants,” says the ARC.
Regarding revenues from ENBI’s operations, the ARC considers that TCUL’s inclusion in the company’s shareholding structure — which is under the supervision of the Ministry of Transport — constitutes a public subsidy capable of “distorting competition among operators, insofar as it will receive dividends from the management of SNBI, as well as income as an operator within the public transport chain.”
“These revenues are, in fact, public funds from which other market operators do not benefit under equal conditions, thus creating an advantage that can distort competition. As a rule, public aid of this kind is prohibited and/or incompatible, as it benefits only one or a few companies,” explains the ARC.
Proposals and Solutions
To mitigate the competitive impact resulting from TCUL’s shareholding in ENBI, the ARC proposes two specific alternatives. One suggestion involves transferring all shares representing the company’s capital to IGAPE, thereby removing TCUL from the equation and making IGAPE the sole entity with authority over ENBI’s management body. “Alternatively, a capital structure could be established that integrates, on equal terms, all operators within the same market segment,” the authors of the study suggest.
Source: Expansão
