Business Plan for Phase 1A of Cape
Town’s MyCiTi Integrated Rapid Transit
system
Public Comment with City
response
Public consultation processes, June to September 2010
5 October 2010
Table of Contents
Introduction ...............................................................................................................................................3
Background ............................................................................................................................................................................ 3
Comments received and structure of response....................................................................................................................... 4
Covering statement in response to comments from the public on the MyCiTi Business Plan ...................5
Introduction ............................................................................................................................................................................ 5
Integration between transport modes ..................................................................................................................................... 6
The suitability of bus rapid transit within the Cape Town environment .................................................................................... 7
Competition and the respective roles of government and the private sector............................................................................ 8
The proposed model: managed competition ......................................................................................................................... 10
Costs of the new system ...................................................................................................................................................... 11
Recommended changes to the Business Plan arising from comments...................................................14
Key approaches re-affirmed ................................................................................................................................................. 14
Proposed changes arising from comment received .............................................................................................................. 15
Annexures ...............................................................................................................................................17
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Introduction
Background
1. In July 2010 the Council of the City of Cape Town approved a Business Plan
for Phase 1A of the MyCiTi Integrated Rapid Transit (IRT) system, for the purposes
of requiring funding from national Government, and for inviting public comment. In
early August 2010 the public was duly invited to comment on the Business Plan. In
parallel, the City issued further documents related to the MyCiTi Business Plan for
public comment, as prescribed by law. This report contains the comment received by
end September 2010 to these various documents and the City’s responses to the
comment.
2. The further documents issued for public comment (referred to above) were
published in terms of the Municipal Finance Management Act (MFMA), which
requires specific steps to be taken prior to the Council taking certain decisions.
Some of these issues are technical in nature. The specific processes that required
public comment in terms of the MFMA, between June and September 2010, were as
follows:
(a) Proposed contracts spanning more that three municipal financial years in
terms of section 33 of the MFMA, which requires the City to publish certain
information for public comment. A number of the intended MyCiTi contracts
are longer than three years. The information statement published in this
regard appears in Annexure D (see page 134).
(b) The proposed transfer of the buses to a financial institution: in terms of
section 14 of the MFMA and related Municipal Asset Transfer Regulations.
The information statement published in this regard appears in Annexure E
(see page 149).
(c) Certain parts of the proposed model of bus title holding and use, which
could be interpreted as including a component of long term debt – in terms
of sections 46 to 50 of the MFMA. The information statement published in
this regard appears in Annexure F (see page 155).
3. Processes (b) and (c) relate to the following: The City is seeking to implement
an arrangement whereby it sells the vehicles it has purchased with funds from the
Public Transport Infrastructure and Systems grant to a financial institution which
would then lease the vehicles to designated vehicle operators. The proceeds of the
sale in essence finance the required lease payments. This arrangement has key
governance and financial advantages to the City but because of certain clauses in
the MFMA requires public consultation.
4. Processes (a), (b) and (c), which are driven by legal requirements, each focus
on a small element of the larger process. Running these processes separately can
prove confusing to the public. This is exacerbated by the timing of the various
comment requirements which must correspond with relevant procurement activities.
The City is committed to transparency and a meaningful process of engagement with
the public.
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5. However, the best way to consider the City’s plans is to read the Business
Plan itself, which set out the full plan and contextualizes and links it to the specific
and relevant legal requirements, making their relevance easier to understand.
Comments received and structure of response
6. In some cases similar comments have been received from different members
of the public. In other cases comments were made on one or other aspect of the
Business Plan outside of the context of the broader picture. This document seeks to
respond to the various comments that have been received in terms of the various
different processes in a manner which makes the overall objective of engaging the
public more coherent while at the same time meeting legislative requirements.
7. The comments received in response to the three public participation
processes are reproduced in full in the following annexures:
(a) Annexure A (from page 19): Regarding the Business Plan in full;
(b) Annexure B (from page 103): Regarding the proposed long-term
contracts;
(c) Annexure C (from page 130): Regarding the proposed transfer of the
buses to a financial institution and related matters (ie processes
described in paragraph 2(b) and (c)).
8. The comments received can be divided into six groups.
(a) Government comment: National Department of Transport; National
Treasury; Provincial Departments of Transport and of Finance;
(b) Chamber of Commerce (‘the Chamber’);
(c) Bus companies providing scheduled bus services: Golden Arrow Bus
Services (GABS) and Sibanye;
(d) Collective input from the directly affected public transport industry (as
defined by the City), namely the above scheduled bus services and the
minibus taxi industry participants currently organizing themselves to
participate in the system, referred to as Company A and Company B;
(e) Western Cape Provincial Taxi Council;
(f) The Greater Cape Town Civic Alliance (GCTCA);
(g) Comment from Flamingo Vlei residents;
(h) Comment from individual citizens (unrelated to Flamingo Vlei).
9. Most comments received are generally strongly welcoming of the initiative but
make specific suggestions to enhance the project or object to a particular element.
While raising a number of detailed issues the national Department of Transport
(NDOT) states that ‘Overall, the MyCiTi Business Plan is well constructed and
detailed’, and adds that ‘The plan in many respects can serve as an example for
other South African cities’. It raises a number of issues on fares, the system plan and
design, vehicle size, the possibility of a transit mall in Upper Long Street, the phasing
of the roll-out and the possibility of advancing links to the South East of the
metropolitan area. It expresses some concern at the envisaged timetable for the
establishment of the municipal entity. NDOT’s comments appear from item 708 on
page 88.
10. The response from National Treasury is contained within a letter which also
confirms the City’s PTISG allocations as contained in the Division of Revenue Act for
the outer years of the Medium Term Expenditure Framework, thus implicitly
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expressing approval of the overall approach being adopted. It proposes to explore
further with the City its envisaged approach to bus ownership. It notes approvingly of
the City’s proposed fare system and related elements, adding that they “appear to
offer considerable advantages in reducing the risk of fare evasion or collusion’.
Regarding the section 33 process it states that is ‘sees no impediment to the city
entering into contractual commitments beyond the three-year MTEF period’.
National Treasury’s comments appear from item 823 on page 101.
11. Both the Chamber of Commerce and GABS question the overall model being
followed with the Chamber of Commerce input reflecting verbatim significant
sections of the GABS input. The GCTCA also requests that the Chamber’s questions
be addressed.
12. The comments submitted regarding each of the processes are dealt with in
the following manner. An overall Covering Statement is made which seeks to
address some of the broader and more strategic concerns.
13. In Annexures A to C comments are treated as follows:
(a) The first column allocates an item number to each issue raised, for
ease of reference.
(b) The second column sets out the comments received verbatim;
(c) The right hand column contains the City’s response to the relevant
comments.
14. This document starts with a Covering Statement, which summarises the most
significant issues raised and also the City’s response to such comment.
15. By far the largest number of the individual comments received regarding the
Business Plan was from residents of Flamingo Vlei. Many of these residents
contained a standardized comment. This comment begins by welcoming the system
as a whole stating that ‘the main IRT trunk routes, with their dedicated lanes, are
fantastic for the City and will bring great relief for passengers who would usually
have to wait in normal traffic’, but objecting to the implementation of a feeder service
in Flamingo Vlei. In the opinion of the MyCiTi project team the arguments for not
running a feeder service in Flamingo Vlei are based to a significant degree on
misinformation and unfounded fears.
16. It is suggested that the optimal approach at this stage is to hold a public
meeting in Flamingo Vlei where more information can be supplied to residents and
based on the response to this a decision taken as to how to proceed.
Covering statement in response to comments from the
public on the MyCiTi Business Plan
Introduction
17. The City of Cape Town seeks to implement a clean, fast, safe and user
friendly public transport system across the metropolitan area within the constraints of
the available resources. The network should be comprehensive enough to place
most inhabitants within reasonable walking distance of the service. And it should be
predictable and frequent enough that it can be relied on in off-peak periods too.
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18. In taking up this challenge the City needs to make use of private sector
capabilities wherever this is feasible within a model that provides for competition.
However this needs to be done within an institutional framework that enables
coherent authority to be exercised over the system as a whole to provide for
metropolitan wide integration and the integration of different transport modes.
19. There are three key concepts that inform the MyCiTi Business Plan and which
need to be restated in order to address the more fundamental criticisms expressed,
including from the Chamber of Commerce and Golden Arrow Bus Services.
20. These relate to:
•
Integration between transport modes;
•
The suitability of bus rapid transit within the Cape Town environment;
•
Competition and the respective roles of government and the private sector.
21. This covering statement discusses each of these and indicates why a model
such as that proposed by the City is required to address them; and why the
alternative model proposed by the Chamber of Commerce ‘that a single company
runs the entire operation’ is not appropriate.
22. It also addresses the scepticism raised by some of the commentators around
the financing of the system.
Integration between transport modes
23. The City seeks ultimately to bring about seamless integration between
transport modes including, in particular, rail and road based services. There should
be integration across routes, fares and timetables.
24. Citizens should be able to use the most appropriate mode for making their
journeys, combining different modes on a single trip where this is optimal. Ticketing
should be integrated so that a single ticket can be used for a single trip, even where
this entails using more than one mode.
25. Integration cannot be achieved immediately because of the manner in which
authority is configured between national, provincial and metropolitan government.
Rail is currently governed by separate legislation from that governing road based
services and falls under PRASA (Passenger Rail Agency of South Africa), which
reports to national government. However, national government is seeking to give
more authority over rail to city governments while the City is seeking more actively
than before to monitor rail service levels and work with PRASA towards their
improvement. This will form a good basis for an incremental process of integration
even if responsibility is not in due course passed to City government.
26. The bus rapid transit routes proposed in the Business Plan have been
designed to complement rail. The first route up the West Coast is in an area not
served by rail, while subsequent routes are aimed at serving the transverse
movements between, for example, Khayelitsha and Mitchell’s Plain in the south east
and Montague Gardens on the west coast; and along the Lansdowne-Wetton
corridor.
27. Ultimately the strategic control of all modes in the metropolitan area should
fall under a single organization, which, in line with the logic of current national policy,
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should be the City of Cape Town. As is indicated below, this does not mean that
service provision itself is to be performed by the municipality.
The suitability of bus rapid transit within the Cape Town
environment
28. Different modes are best suited to different levels of passenger demand.
Cape Town’s rail services are well suited to carrying large volumes of passengers
over fairly long distances, while, at the other end of the spectrum, minibus taxi
services work best over short distances and where services need to be tailored to
individual riders. The uncontested right of way enjoyed by suburban rail services
means that rail passengers can travel relatively fast. However, the tracks create
barriers across urban space. Smaller road based vehicles (such as standard buses
or even smaller vehicles) are much better suited to penetrating local networks.
29. While train services are appropriate for high volume peak periods they are
not appropriate for serving low off-peak demand. To save costs off-peak rail services
tend to be reduced to a minimum resulting in inconveniently long headways between
trains.
30. Bus rapid transit (BRT) is a technology that combines some of the
characteristics of rail services with those of conventional bus services. On the trunk
routes BRT generally runs on its own dedicated roadway along the median (middle
of the road) in order to minimize interference with mixed traffic, although interference
cannot be fully avoided as in the case of rail.
31. While the situating of BRT stations in the middle of the road has raised
concerns about needing to cross the road to access the stations (see GABS input) it
should be noted that in the conventional system (which runs at the kerbside) no road
crossing is required only if the passenger is on the side of the road where the
relevant stop is located. Both directions of traffic must be crossed if the bus needs to
be taken in the opposite direction. The total amount of road crossing is the same for
both systems. Generally it is safer to cross a stream of traffic that runs in only one
direction.
32. As with rail, BRT trunk routes have stations which permit for tickets to be
checked as users enter the station. This means that many passengers can board at
one time when the vehicle arrives and do not have to queue at the vehicle entrance
as with a conventional bus. They are also well protected from weather.
33. In the submission from GABS, and repeated in the submission from the
Chamber of Commerce1 it is argued that the City’s model has borrowed heavily from
South American cities where densities are much greater and average trip lengths
shorter, and that the volumes in Cape Town do not warrant it. The City has, indeed,
drawn substantially on the South American model; however, it is only seeking to use
the particular BRT technology along trunk routes where volumes are relatively high
but which are not served by rail.
34. The MyCiTi trunk services are better than rail at serving lower volumes and
thus represent an appropriate and cost effective substitute for rail in the Cape Town
environment. Apart from being cheaper to run and able to provide a better off-peak
1
The wording in both submissions is the same.
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service than rail, they are much cheaper to implement because their infrastructure
requirements are much lower. They are also able to capitalize on existing road
networks and penetrate areas such as the central business district and the
Waterfront in a manner not possible with rail.
35. Elsewhere, the system is based on feeder routes, which are more similar to
current conventional bus services, but in some cases such as the central city area,
will use smaller vehicles to enable easier penetration of the urban fabric. The feeder
system is also designed to feed the trunk (train-like) service, rather than to compete
or duplicate – as is the case with some of the current minibus-taxi and scheduled
bus services.
36. If it is accepted that rail forms an appropriate part of Cape Town’s public
transport system (as the GABS submission does) it cannot be argued that there is no
justification for bus rapid transit. The City maintains that given that there is no rail
service up along the Blaauwberg / Atlantis corridor, which is the fastest growing part
of the metropolitan area, this is a highly appropriate route for BRT2. Other key trunk
routes which transverse the current radial rail network are also appropriate as BRT
trunk routes.
37. If mode integration can be achieved as indicated the spectrum of different
technologies can be applied most appropriately to the trip undertaken.
Competition and the respective roles of government and the private
sector
Overall institutional approach
38. The institutional approach which underpins the Business Plan seeks to
establish competition between privately owned public transport service providers
within a single coherent system under the strategic control of a small entity
established by the City.
39. In terms of legislated requirements the City is required to examine the optimal
approach to service delivery on a case by case basis prior to making a choice
between internal and external service provision. However, in broad terms, the
approach inherent in the MyCiTi Business Plan is that actual delivery in the transport
sector is better undertaken by the private sector while strategic control over the
system must lie with the public sector.
40. Legislation no longer provides for a separate ‘Transport Authority’ as
proposed in the submission of the Chamber. In terms of the Constitution ‘authority’
effectively lies with one or more spheres of government; and this constrains the
authority that can be given to a Transport Authority. The Transport Authority model
2
The current goods rail link does link the City with Atlantis but lies well to the east of the main catchment area in the southern
part of the west coast corridor, running largely alongside the N7. To run commuter trains along this corridor would require
substantial improvements to this line (including extending the line from the industrial area to the central Atlantis) and purchasing
of additional rolling stock. At present the demand from Atlantis itself is insufficient to warrant such investment and operational
costs and its location would have resulted in limited ridership other than from Atlantis. It would thus not have provided a
complete solution to the key areas of current congestion. The cost of providing off-peak services on an Atlantis rail line to such
a demand profile would probably result in low service levels with very long off-peak headways, resulting in a generally
unsatisfactory service. At present and medium term demand levels, the planned IRT solution is much more appropriate as a
public transport solution of passengers along this corridor.
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that did exist conflicts with the Municipal Finance Management Act. The closest
equivalent is for the municipality to create a public company, referred to as a
‘municipal entity’ in order to carry out its responsibilities.3 The Business Plan
envisages the creation of a municipal entity to exercise strategic control over MyCiTi
operations, once the scale of the operations is sufficient enough to establish such
entity. This body will undertake many of the tasks previously envisaged to be
undertaken by a ‘Transport Authority’. However, in most cases actual services will be
provided by private companies. The City of Cape Town retains overarching authority
over public transport in the metropolitan area and will be increasingly responsible for
allocation of public funds to public transport. This is a specification of the Municipal
Systems Act which stipulates, in terms of section 81, that a municipality retains
service delivery authority even if a service is provided by a municipal entity.
Current forms of competition within Cape Town’s public transport sector
41. Competition between private service providers generally enhances efficiency;
however, the provision of public transport does not lend itself easily to a conventional
free market approach. The current system in Cape Town is characterized by
shortcomings in the way in which competition works.
Minibus taxis
42. The minibus-taxi industry operates more or less in terms of a conventional
free market approach. Competition between individual operators means that in some
respects they are highly efficient with low production costs. Indeed, minibus-taxis will
generally not provide a service that is not profitable. However, the implication of this
is that some routes are not served at all and in off-peak periods users must
sometimes endure long waits while the taxi fills up before it will depart. This form of
competition results in taxis racing one another along routes; they need to get to
waiting passengers before their rivals. It has led to the development of taxi
associations, which in an uneasy symbiosis with the authorities, seek to manage the
situation by rationing the entry of taxis onto any one route. In effect, the taxi
associations control the routes, sometimes charging high membership fees to
operators and even sometimes defending their territory by force.
Golden Arrow Bus Services (GABS)
43. The subsidised scheduled bus services such as GABS represent a different
model. Over the years they have identified a range of routes, some of which they run
profitably without subsidy and some which require a subsidy to be profitable. The
challenge for the authorities is that there is little competition in the formal bus sector.
GABS, in essence, monopolises the provision of conventional scheduled bus
services in Cape Town. It is much larger than potential competitors and has
significant assets accumulated over many years – not least its critically located
depots. GABS cannot be blamed for being a monopoly or seeking to retain or extend
that position. However, the implication is that government is in a weak position when
it negotiates with GABS around the provision of subsidised services, or puts out
large tenders for such services. GABS has developed important efficiencies over the
3
The Cape Town International Convention Centre is an example of such a municipal entity.
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years, but Cape Town cannot allow itself to be dependent on GABS or any other
single private company in providing services.
Rail services
44. The third key player in Cape Town is the Passenger Rail Agency of South
Africa (PRASA) which runs the Metrorail services and accounts for half of all public
transport trips in the metropolitan area currently. It is a national agency reporting to
the national Department of Transport incorporating some elements of private sector
practice, but running essentially along the lines of a parastatal with a monopoly over
its area of responsibility.
The proposed model: managed competition
45. The key challenge for the City of Cape Town, to which significant
responsibilities for public transport have been devolved with the passage of the
National Land Transport Act in 2009, is to integrate the various providers into an
efficient, seamless public transport system serving the whole metropolitan area,
retaining competitive elements where this is appropriate and exercising public
authority where this is required to make the system as a whole function optimally.
46. The MyCiTi IRT concept, when eventually implemented across the whole
metropolitan area, would see at least three or four bus companies competing for
between ten and twenty contracts. Contracts should last long enough to warrant
investment in vehicles which tend to have a useful life of over ten years, and should
be staggered over time to engender ongoing competitiveness. Commuter rail will
need to be incorporated on a different basis but this is a longer term goal which will
require legislative changes.
47. One of the features of the model is a single control centre. Buses are fitted
with geographic positioning devices which makes it possible to track all vehicles all
the time irrespective of which company they belong to. Companies are contracted to
run vehicles along a particular route at a particular time and can be monitored. The
control centre will also communicate directly with vehicles, and instruct drivers in a
manner that ensures the most efficient and reliable service.
48. Companies are paid per kilometre for running vehicles along the designated
routes rather than on the basis of the number of passengers carried (although hybrid
systems of payment may be considered). Deciding when and where to run vehicles
is done by the controlling authority, in due course the municipal entity. This includes
sometimes running vehicles at guaranteed frequencies along low demand and offpeak routes where this is necessary to create a reasonably comprehensive service.
Private companies are unlikely to run these routes if their profitability is based on the
number of passengers they carry, unless they are subsidised to provide such
services
49. This approach makes it possible for routes to be served by more than one
operator, with each operator running as directed by the control centre. All vehicles
will have the same MyCiTi brand so the identity of the operator would not be
important to the user.
50. The implication of this model is that the fare system needs to be run by a
different firm from those running vehicles; it cannot and should not be run by one of
the vehicle operators. New smart card technology and standards introduced by
government and the banking sector earlier this year will make it possible for
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electronic cash cards to be used as transport cards. This will allow integrated fare
systems across service providers and utilises the banking system’s back offices as
clearing houses for fare transactions, significantly reducing costs.
51. The detailed information on passenger usage provided by the control centre
and fare system allows services to be tailored more accurately to user demand on an
ongoing basis. Changing operator routes would now no longer be an obstacle
because of the payment per kilometre.
52. The structure of sub-contracts, to which the Chamber objects, is a
consequence of this. While it is envisaged that a municipal entity would be
established to exercise strategic and management control over the whole system the
control centre, fare system, station services and each of the vehicle contracts are
sub-contracted to private service providers in separate contracts. Vehicle operators
could also bid for the station contracts, but could clearly not be contracted to run the
control centre responsible for controlling themselves and competing operators.
53. In its tendering approach the City did provide for a single service provider to
provide both the Control Centre and Fare System services on the assumption that
this would allow cost savings to the provider. However no suitable integrated tender
was forthcoming. Good quality tenders were received for the separate contracts of
control centre and fare system. The type of capabilities required for staffing stations
are very different from those required for running a sophisticated fare system, and
there is a high likelihood that had the tasks been tendered for jointly the City would
have been compromised in one or other area. It is recognized that having different
providers will present integration challenges; however, with the appropriate attention
this will be addressed.
54. In conclusion, the model proposed by the Chamber whereby the whole
system is run by a single company, echoing similar remarks by Golden Arrow,
cannot sustain the integration of rail and road based services into a single system,
does not offer scope for the minibus-taxi industry to be drawn into the formal system,
and does not allow the ongoing innovation and improvements in efficiency that result
from competition between bus operators. The model proposed by the City provides
for competition but avoids the forms of somewhat combative competition currently
pertaining within the minibus-taxi sector.
Costs of the new system
55. The Chamber doubts the City’s claim that it will be able to render a service
which is superior to the current service at fare levels that are more or less
comparable.
56. The Business Plan lists a number of factors arising from the implementation of
the MyCiTi system that should enhance cost-effectiveness and others that will lead
to increased costs. The following factors were quoted as improving costeffectiveness:
•
Fleet size can be matched with projected demand while maintaining
relatively high service frequencies.
•
The dedicated roadways allow vehicles to move faster in peak periods,
providing scope for more than one trip per vehicle in the peak period. This
reduces the required trunk vehicle fleet size, maximises the use of the fleet
and reduces operational costs per peak period.
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•
Rapid boarding and alighting of passengers, including the disabled,
minimises dwell times at stations, which positively influences operational
costs.
•
The control centre tracks all vehicles, and ensures compliance with the
schedule. This minimises wastage and ensures that demand and supply
are optimised.
•
Attracting increasing numbers of users from private vehicles reduces
operating cost per passenger through economies of scale.
57. On the other hand, there are features which will increase infrastructure costs
when compared with the current system. These include dedicated roadways and
other fixed infrastructure.
58. There are also features which will increase operational costs when compared
with the current system. These include:
•
Higher frequency of service during off-peak periods that increases
operational cost.
•
Stations and an independent fare collection system need to be operated
and extensive security provided on the system.
•
Additional costs associated with the control centre, which controls and
schedules vehicles in real time, as well as the municipal entity or
department required to manage the various contracts and the system as a
whole.
•
The replacement of current informal business practices with a more formal
system with improved employment conditions will increase costs.
•
Maintenance of additional fixed infrastructure.
59. Income and expenditure projections for Phase 1A have been extensively
modelled. Projected passenger numbers are based on detailed passenger counts for
the current public transport system. These were not, however, available for the
Airport Service, the implementation of which was driven by FIFA World Cup
requirements and timetable. Given that, for much of the IRT services, existing
services will be replaced, the number of existing ‘captive’ users has been assumed
to give a good indication of expected ridership. Fewer than 10% of current ‘choice’
users (ie car users) are assumed to switch to the new system – although more may
actually switch. Operating costs have been projected based on local information,
including the cost of the services provided for the FIFA World Cup.
60. The figures for the system as a whole have been modelled by renowned
international transport modellers. Further modelling of routes outside Phase 1A and
a more thorough assessment of risk will be undertaken prior to extending the system
to such routes. As such Phase 1A constitutes a pilot, from which the City (and its
contracted operators) will learn and plan the rest of the system.
61. National government is contributing approximately 90% of capital and other
once-off costs from the Public Transport and Infrastructure Grant. This is clearly of
great significance to the project and is available because of the MyCiTi system’s
consistency with national government’s policy aims in the public transport sector.
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Were this grant funding – or an equivalent alternative revenue source – not available
the project would not have been feasible.
62. Bus operating costs are driven substantially by peak hour requirements.
Conceptually, the key mechanism whereby costs are reduced in the MyCiTi system
is by reducing the size of peak fleet requirements through better use of resources.
The dedicated roadway makes vehicle cycle times much faster. Even allowing for
stops, the morning peak travel time from Blaauwberg to Civic station in the central
business district is approximately 30 minutes. This makes it possible for a vehicle
departing from Blaauwberg at 6.00 am to return and complete a second or even a
third journey before the end of the morning peak. If, on average, peak vehicle cycle
times are halved the fleet requirement is halved resulting in dramatic cost reductions.
63. The flexibility offered by the business model in use of vehicles is also
significant. This arises from the fact that vehicle operators are paid per kilometre and
can be required to run any trunk route. Thus a vehicle that leaves Atlantis in the early
morning might take a full load of passengers to Montague Gardens, return to
Dunoon, take another full load from there to Bayside and follow this with a trip from
Bayside to the central business district all within the morning peak.
64. Comment from the Chamber and GABS notes that fares are 30% higher than
current fares. This is the case for Atlantis if the fare as proposed in the Business
Plan is compared with the current subsidized clipcard fare, but only if one assumes
that the current users do not transfer from or to other services on either side.
However, as indicated in the table below:
•
For a passenger who currently travels by taxi to the CBD, the MyCiTi fare
will result in a 20% saving on fares, and more if the passenger currently
has to transfer to another service within the Phase 1A area.
•
If a current GABS / Sibanye clipcard passenger travels by minibus-taxi in
Atlantis to catch a bus, or takes another taxi or bus in the Blaauwberg or
CBD areas to get to their destination, the proposed MyCiTi fare will be
equal or lower – since transfers to feeders in the MyCiTi system are
generally free: respectively a 3% and a 22% reduction in fare compared to
the current.
•
In addition, the existing GABS fare for single trips during peak time from
Atlantis to the CBD is R32.90, while the maximum proposed fare of MyCiTi
system is R16 – thus, in this respect, the MyCiTi fares are 51% lower than
the current fares.
Table 1. Comparing current bus and taxi fares from Atlantis to CBD with proposed MyCiTi fares
Fare categories
Current
bus fare
Taxi fare (assuming no transfers)
Current
taxi fare
20.00
MyCiTi
proposed
% change
16.00
-20%
29%
Monthly clip card fare (for 21.3 working days)
No transfers
12.44
16.00
Plus one taxi trip (eg to get to bus route)
16.44
16.00
-3%
Two extra taxi trips (one each side of a bus trip)
20.44
16.00
-22%
Peak time single trip fare
32.90
16.00
-51%
Off-peak single fare
21.80
16.00
-27%
Note: a negative percentage in the last column means a saving for the passenger, and a positive figure means an additional
cost for that passenger.
Comment on BP and City response Dft4.12 101008.doc
14
65. The City is in the process of reviewing its proposed fare structure with a view
to introducing special fares under certain circumstances that would match existing
fares on all routes. An element of this will include substantially cheaper fares for
journeys outside of the main peak period.
66. The Atlantis service is an unusual service because of its very distant location
from the rest of the city. Costs are driven up by long trip distances and the need for
passengers to be fully seated. It is thus not a service for which MyCiTi is ideally
suited and not one to use as a basis for assessing the system running under normal
circumstances. However, in implementing a new system on the City’s west coast it
seems appropriate to include Atlantis. It is projected that the new system will reduce
peak travel times between Atlantis and the CBD from 1 hour 45 minutes to
approximately 60 minutes.
Recommended changes to the Business Plan arising from
comments
67. The Business Plan is continually re-assessed in response to new issues and
insights. External reviews and processes of public comment assist significantly in
tabling these issues and insights for consideration. Where justified, changes are
made to the current approach; however, a useful purpose is also served even when,
based on subjecting plans to comments received, the current approach is reaffirmed.
68. For example a detailed due diligence investigation of the IRT by an external
multi-disciplinary professional team was conducted earlier this year. It results in
some adjustments to the Business Plan, and in confirmation of the appropriateness
of other elements thereof.
Key approaches re-affirmed
69. The very key strategic issues raised by the Chamber and Golden Arrow Bus
Services relating to the overall logic of the model have been thoroughly considered.
However, the view of the City is that firstly, the Latin American model of bus rapid
transit that the City intends to implement on key trunk routes, is indeed appropriate.
The trunk route up the Blaauwberg / Atlantis corridor has no rail services and
undoubtedly needs a more substantial service than can be provided by conventional
bus services. Other key trunk routes running across the radially organized existing
rail service are important candidates for similar routes in subsequent phases. It is
acknowledged that servicing Atlantis poses significant challenges given its distant
location, and that this is not the type of route for which the bus rapid transit model
has been designed. Nevertheless the City is of the opinion that it would be
unfortunate to maintain the peripheralisation of Atlantis by not integrating them into
the new system; and that this can be done at reasonable cost.
70. Secondly, the institutional model whereby the City takes strategic
responsibility for the services – initially in-house, but subsequently through a
municipal entity – and sub-contracts delivery to a range of private companies is reaffirmed. It is very clear that the alternative model proposed by the Chamber and
Golden Arrow whereby ‘a single company runs the entire operation’ is not
appropriate. It cannot sustain the integration of rail and road based services into a
single, integrally managed system, does not offer scope for the minibus-taxi industry
Comment on BP and City response Dft4.12 101008.doc
15
to be drawn into the formal system, and does not allow the ongoing innovation and
improvements in efficiency that result from competition between bus operators. The
risks, however, in managing integration between contractors do need to be well
managed.
71. Thirdly, while actual demand patterns, levels of ridership, costs and revenues
can never be known with complete certainty prior to actual operations the City has a
reasonably good insight into these factors for Phase 1A. The efficiency
improvements that the system should be able to engender arising from much quicker
cycle times, and the ability to utilize vehicles relatively flexibly in response to demand
patterns do give substance to the City’s claims that it will, in broad terms, be able to
deliver a superior service at similar fare levels given the levels of subsidy that
national government has committed to as described in the business plan. There are
however, specific instances where the City’s proposed fares are slightly higher than
current fares. The City intends to review its proposed fare structure in order to offer
options which more closely match current fare levels without compromising the
overall finances of Phase 1A.
72. The City acknowledges that the capital costs for the project were initially
significantly under-estimated. Reasons for this have been provided in various reports
to council and were again included in Annexure E to the Business Plan. It is possible
that, had the project not needed to work under the pressure of meeting FIFA 2010
deadlines, these mistakes might have been avoided. Since the review and revision
of costs in mid-2009 these have remained largely consistent.
73. The modelling results presented in the Business Plan relating to the whole
metropolitan area are based on much more limited investigations than those relating
to Phase 1A. However, at this stage the City is committing itself only to Phase 1A.
Commitment to further rollout and the precise modalities of such roll-out will be
based on much more extensive modelling and research together with experience
gained through actual Phase 1A operations.
Proposed changes arising from comment received
74. The following key areas are receiving attention
Review of the fare structure
75. For the trunk routes the current Business Plan proposes a fare based on a flat
amount combined with a distance based portion. A small variation is provided for
according to whether travel is undertaken in the peak or off-peak. There is minimal
provision in the proposed fare structure for reductions for regular use – for example,
a monthly multi-journey transport product. For clipcard users from certain locations,
such as Atlantis, the proposed fare is higher than the current clipcard fare – see
paragraph 64 above. The new service will offer considerable quality benefits; for
example, peak hour journey time from Atlantis to the city centre will be cut from
approximately 1 hour 45 minutes to approximately 60 minutes. However for price
sensitive users the fare increase may be challenging. Reasonable options are
required whereby users can access lower fares. In particular the City is considering
introducing more substantial differences between peak and off-peak fares, such that
off-peak fares match current subsidized fares more closely. To the extent this
mechanism can be used to flatten and extend the peak it is possible that costs
savings will be possible that allow for lower fares.
Comment on BP and City response Dft4.12 101008.doc
16
76. The City also wishes to investigate the possibility of introducing a loyalty
system based on earning ‘MyCiTi miles’ to reduce costs for regular users, while
maintaining an acceptable level of fare income.
77. The electronic fare system that the City intends procuring has the capabilities
for sophisticated programming to allow a variety of transit products. However some
options are limited by the extent to which it is reasonable to measure the point of
disembarkation from feeder vehicles, and manage potential fare evasion associated
with this.
Review plan within Atlantis
78. As indicated above, servicing Atlantis presents significant challenges arising
essentially from its distant location from the rest of the city. The availability of
substantially subsidized clipcard fares so long as users travel most weekdays,
alongside much higher ad hoc fares, has resulted in the journey to and from Atlantis
being a heavily peaked commuter service. This also impacts on feeder and
distribution travel patterns within Atlantis. Current services do a trip through Atlantis
collecting passengers before embarking on the route to the city. The existing plan is
to have trunk stops within Atlantis; however this is being reconsidered in favour of a
different feeder and distribution model within Atlantis.
79. In addition, the team is considering reviewing the roll-out plan partly to allow
additional time to settle the issues above.
Managing integration between contractors
80. The City is confident that its sub-contracting model will result in optimal
solutions across the substantially different services of fare systems, control centre,
station services and vehicle operations. However it also concedes that such a model
presents significant integration challenges, as highlighted by the Chamber. Therefore
management and dispute resolution systems to facilitate such integration are being
fine-tuned.
81. An area of particular complexity is in integration between the fare system and
control centre. The city is investigating mechanisms that would give it additional
comfort that such integration is successfully addressed.
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17
Annexures
Table of Contents
Overview of Annexures ...........................................................................................................................18
Abbreviations used..................................................................................................................................18
Annexure A: Comments received on Business Plan, with City response................................................19
Comments on Business Plan from joint workshops with Portfolio Committee on Finance and Transport Roads and Major
Projects: 2010-07-15 and 2010-08-16 .................................................................................................................................. 19
Chamber of Commerce ........................................................................................................................................................ 27
Golden Arrow Bus Services (Pty) Limited ............................................................................................................................. 35
Flamingo Vlei ....................................................................................................................................................................... 42
Comments from six individuals ............................................................................................................................................. 59
Vehicle Operator Company A, comprising of Golden Arrow, and three taxi associations based in the Inner City: comments
and questions regarding Business Plan................................................................................................................................ 66
Vehicle operator company B grouping, comprising of Sibanye bus company and six taxi associations in the Blaauwberg /
DuNoon / Atlantis areas – Comment on Business Plan ........................................................................................................ 67
Further comment from Du Noon Taxi Association on MyCiTi Business Plan......................................................................... 71
The Greater Cape Town Civic Alliance: Comment on Business Plan.................................................................................... 72
Provincial Department of Transport ...................................................................................................................................... 80
National Department of Transport......................................................................................................................................... 88
National Treasury............................................................................................................................................................... 101
Annexure B: Comments on MFMA Section 33 information document, with City response ...................103
Golden Arrow Bus Services (Pty) Limited ........................................................................................................................... 103
Chamber of Commerce ...................................................................................................................................................... 108
Western Cape Provincial government ................................................................................................................................ 110
Individual procurement-related responses .......................................................................................................................... 118
Bob Stanway, previous project manager of the Rea Vaya BRT project in the City of Johannesburg ................................... 118
Sibanye Bus Service .......................................................................................................................................................... 120
Schaapkraal Civic & Environmental Association – SCEA ................................................................................................... 120
Western Cape Provincial Taxi Council................................................................................................................................ 124
Xpress Computers, Langverwacht...................................................................................................................................... 129
Annexure C: City’s preferred model on vehicle ownership, transfer and use ........................................130
Comment on the vehicle ownership model ......................................................................................................................... 130
General comment offered (unrelated to the vehicle ownership model)................................................................................ 132
Annexure D: Information document – Long term contracts ...................................................................134
1. Executive summary ........................................................................................................................................................ 134
2. Introduction .................................................................................................................................................................... 136
3. The vision of an integrated public transport system for Cape Town ................................................................................ 137
4. Description of Phase 1A of IRT system .......................................................................................................................... 139
5. Business structure of the IRT system and the contracting process ................................................................................. 140
6. Description of Section 33 contracts for the MyCiTi system.............................................................................................. 142
7. Financial Implications of MyCiTi IRT contracts................................................................................................................ 145
8. Further documentation ................................................................................................................................................... 147
9. Where to submit your comments .................................................................................................................................... 147
Annexure E: Information document – Transfer of MyCiTi buses ...........................................................149
Annex A. Indicative values of MyCiTi Phase 1A initial fleet (excl VAT)................................................................................ 151
Annex B: Assessment of the options regarding ownership of buses ................................................................................... 151
Annexure F: Information document – Proposed transactions to establish desired title holding and use of MyCiTi
buses ....................................................................................................................................................155
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18
Overview of Annexures
This annexure sets out the full text of comments received regarding the various public participation processes regarding the
MyCiTi Integrated Rapid Transit Business Plan for Phase 1A, and the City’s detailed response.
The Annexure is divided into the following columns:
1.
Paragraph numbers for ease of reference.
2.
The comment received.
3.
Draft City response.
Abbreviations used
AFC: Automatic Fare Control
IT: Information Technology
BAC: Bid Adjudication Committee
MFMA: Municipal Finance Management Act
CCTV: Closed circuit television
NLTA: National Land Transport Act
City: City of Cape Town
NLTTA: National Land Transport Transition Act
CCC: Control centre contractor
PFMA: Public Finance Management Act
DORA: Division of Revenue Act
SLA: Service Level Agreement
DoT / NDOT: Department of Transport (National)
SS: Station services
FSC: Fare system contractor
SSU: Strategic Surveillance Unit
FY: Financial Year
VAT: Value Added Taxation
GABS: Golden Arrow Bus Service (Pty) Ltd
VOC: Vehicle operation contractor
Comment on BP and City response Dft4.12 101008.doc
Annexure A: Comments received on Business Plan, with City response
Item
Comments
City response
Comments on Business Plan from joint workshops with
Portfolio Committee on Finance and Transport Roads and
Major Projects: 2010-07-15 and 2010-08-16
1.
Overall concept and design
2.
Fundamental Review
3.
Have we done our homework correctly and determined that we really need this service
4.
Should we not sell MyCiTi to an Operator such as GABS and the City only set the Tariffs
5.
Does the public need this service
MyCiTi is a crucial element in enhancing public transport in the metropolitan area. On trunk
routes it offers an intermediate service between rail and conventional bus services, but is more
suitable than rail in many instances because of being better suited to serve corridors with lower
demand. On feeder routes it is similar to conventional bus services, but in many instances will
use smaller vehicles. Thus it will replace much of the current conventional bus services and
taxis.
Integration with other modes of transport
The institutional model enables the integration of public transport across modes (e.g. road and
rail services) in terms of routes, ticketing and timetables, and provides for managed competition
amongst road-based service providers. In Phase 1A, route integration with rail is at Woodstock
Station.
7.
How is MyCiTi as a component of IRT going to integrate with commuter rail
For more extensive discussion on these issues, see the Covering Statement (appears from
page 5).
8.
As it stands MyCiTi looks like a replacement of GABS and Taxi
6.
9.
Route Selection
10.
Concern was expressed with the sustainability of the West Coast/R27 route when there was
greater need in the South East of the metropolitan area.
The greater need is acknowledged and is incorporated in phase 2 accordingly. The main
reasons why the R27 corridor was chosen was because of; high congestion levels along this
corridor, no adequate public transport alternative (No rail), smaller grouping of operators and
this corridor provided the perfect environment ‘to learn’ before embarking on the important
metro South-East.
However, this corridor does present some interesting challenges such as that, due to its long
distance from Cape Town, it is not ideally suited for BRT. However, the continued
peripheralisation of Atlantis is not acceptable.
11.
Congestion, absence of a rail service and less complex network of existing operators indicated
as reason for West Coast R27 route selection.
Noted.
12.
IRT needs to address the travel demand of the Klipfontein Corridor
The West Coast was chosen because of current high and rising congestion on that route,
absence of rail, a less complex network of existing operators and also the need to learn before
20
Item
Comments
City response
Starting with the R27 and West Coast route makes sense given congestion and lack of a
commuter rail link
embarking south-eastern core public transport market.
13.
Need to review projected rollout which will only get to Atlantis in October 2013
The timing of the Atlantis roll-out within Phase 1A will be determined by a range of technical
factors including financial cost-benefit, access to the PTOG subsidy, cash flow and traffic
engineering considerations.
14.
Atlantis needs to be prioritised by starting the IRT rollout at Atlantis and not at the CBD
The inner city end of the trunk is common IRT and all other existing services from the rest of
metro. The City has ‘completed’ or about to complete the Bayside trunk. The next logical step is
the inner city feeders which will overcome the problems we now experiencing with the Airport
shuttle – lack of an adequate distribution service. These inner city feeders will not only serve the
R27 trunks but will also provide the opportunity for rail, bus and taxi users (from the rest of the
metro) to get to there relevant destinations within the CBD.
15.
Airport CBD Shuttle
The airport-to-CBD service would not have been prioritised prior to other Phase 1A services had
it not been for the need to meet FIFA World Cup requirements. Such a service would generally
be implemented only once there is a reasonable network in place, including effective feeder
services in the CBD. Its effectiveness should be improved to some degree with the interim
central city feeders.
16.
The feeder service in the CBD needs to be expedited to link the Airport CBD shuttle with
hotels.
The implementation of the permanent inner city feeders has been prioritised. Based on a cash
flow and infrastructure implementation exercise, October 2011 is the earliest date that this
milestone can be implemented. An initial inner-city service is proposed to commence soon –
see item 19 below and further.
17.
Many people who work at the Airport including air crew live in the City and should be a target
market.
Over and above the airport staff members who live or stay over in the area to be served by
Phase 1A, the main target group for the airport–CBD shuttle is the tourist and regular business
commuters to the CBD. Airport staff living in the rest of metro will be targeted when future
planned airport services are rolled out.
The problem with targeting airport staff is that most of these people do not stay in the CBD but
in the South East quadrant.
18.
Need Park and Ride facility at the IRT Stations including the Civic Centre Station.
Park and ride initiatives are being investigated but need to be implemented to complement the
planned feeders system and not compete.
19.
Redesign of Inner City loop services
20.
Disappointment at termination of inner City loop service.
Design after 2010 World Cup event service must be for public transport.
Design for a different market eg local schools.
21.
Need to recommence as soon as possible eg September 2010
The Inner City Service has been reviewed. The initial World Cup service was not suited to postWorld Cup requirements. An intermediate service is being implemented while awaiting the full
central city service, which is expected in October 2011. The intermediate service is constrained,
inter alia, by not being able to compete directly with the minibus taxi service until agreement is
reached with the current industry.
The plan is to commence with an interim inner-city service as soon as possible. This has been
delayed by procurement steps, and is presently estimated to start in late October or on 1
November.
22.
Station design and accessibility
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21
Item
Comments
City response
23.
Kerbside station design needs to be more visible.
The kerbside stops that one currently sees in the Inner City are only temporary facilities. The
permanent facilities will have specially raised platforms for level access, somewhat larger
shelters and MyCiTi “totems” that are significantly more visible than the pole system.
24.
The pedestrian linkage and signage between Cape Town Rail Station and Civic Centre IRT
Station needs to be improved.
Yes, this is part of the plan. Also when the full inner-city feeders are operational, there will be a
trunk-feeder station in Adderley Street at the rail station, which will improve rail passenger
connectivity to the IRT system.
25.
Inadequate park and ride facilities.
26.
Inadequate drop off facilities.
Park and ride facilities are useful in interim phases (towards the roll-out of the entire system).
However as a permanent solution, in most cases they would compete with the feeder
distribution service, which links passengers from their neighborhoods to the trunk and rail
services.
27.
Suggestion of incorporation of car hire facilities.
Already incorporated in current designs at specific stations.
Agreed
28.
Costs
29.
Financial Projections
30.
31.
Concern with prospect of financial projections being wrong
The operating deficit has been estimated based on extensive modelling of available data.
Is the estimated Operating Deficit for Phase 1a of R115 million per annum correct
The Business Plan provides a range of deficit estimates based on different scenarios, of which
the estimate of R115m is approximately the midpoint. The system is designed to enable cost
reduction to some degree, through providing fewer services in cases of low ridership.
What is the contingency plan if not able to use the PTOG to cover the operating deficit
The City has been assured by a letter from DoT that it will be able to use the PTISG on an
interim basis if PTOG cannot be accessed. This period should be used for accessing the grant
or other revenue sources and reducing costs.
32.
Implementation cost
33.
Questions raised regarding the escalation in implementation cost
The escalation in implementation costs is explained in detail in Annexure E of the Business
Plan.
34.
Operational cost
35.
Concern expressed with respect to the sustainability of the service as a whole
36.
Concern expressed with respect to the viability of the Airport to CBD Service
37.
Every effort must be made to balance income with expenditure
38.
Concern that the taxpayer/ratepayer will have to cover operating deficits
Comment on BP and City response Dft4.12 101008.doc
Implementing projects of this nature inevitably involves risk. A key merit of this project is that it
allows for incremental implementation, so that plans for further roll-out can be re-assessed
based on the experience of the Phase 1A demonstration phase.
The project is fully in line with national government policies and has thus been able to elicit
significant national support, including substantially increased capital grant funding. National
government is addressing the issue of ongoing funding of public transport in the light of the
Page 21
22
Item
Comments
39.
Suggestion that Operating costs could be reduced by varying service levels
40.
Ratepayers need to be protected from excessive upside on the Operating Budget of MyCiTi
41.
Deficit should not be funded from rates.
42.
Are the IRT assets: buses and infrastructure adequately insured?
City response
devolution of responsibility contained in the National Land Transport Act and the experience of
all the cities now involved in enhancing public transport.
The financial risks associated with Phase 1A, which represents about a tenth of the full road
based system, can be managed given current fiscal arrangements. However, it is understood by
national government that an additional responsibility of this size cannot be funded from rates
other than to a very limited degree. These matters are discussed in the Business Plan.
The vehicles are currently insured through the City’s own insurance mechanisms, in line with
City policies. They will continue to be insured.
43.
Funding from National Government
44.
Note made of the significant National funding to the City from PTISG of the order of more than
R4 billion
45.
Wonderful National programme being implemented in Cape Town
46.
Note that National is expending considerable resources upgrading Public Transport in Cape
Town
47.
Enquiry as to whether National will continue to fund the service as we have received such a
significant amount to date.
See answers to questions under section on ‘Operational Cost’, item 35 and further.
48.
Funding from the City
49.
How was the City funding of R 379 million provided to the project?
The City’s funding of R379 million was provided almost entirely from the Capital Replacement
Reserve.
50.
Has the City’s bridging funding been repaid yet from PTISG funding?
Bridging funding has been repaid from PTISG
51.
Transfer of Bus Subsidies
52.
Intensive effort required to ensure bus subsidies transferred to MyCiTi services
While regulations in terms of the NLTA expressly state that the legacy bus subsidies should be
shifted to the new system once it replaces the old one, new wording is required in DORA if this
is to be enforced.
53.
Will Department of Transport let us use PTISG funding to subsidise the operating cost.
Department of Transport has agreed to allow use of PTISG to subsidise operating costs as a
transitional measure.
54.
Corridors outside of Phase 1A have rail subsidy, MyCiTi service in Phase 1A should have
subsidy to compensate as there is no rail service operating up the West Coast
Under current arrangements, the rail subsidy cannot be diverted to subsidising IRT Phase 1A
since the rail services are run by PRASA, reporting to national government.
55.
Proposal and counterproposal as to the diversion of Rail subsidy to subsidising the IRT Phase
1A service.
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23
Item
Comments
City response
56.
Value Added Tax
57.
Proposal to make dedicated lanes open to public during off peak periods to allow VAT
recovery
58.
Do we recover the VAT payments from PTISG
It is recommended that we do not compromise the service in any fundamental operational way
to address the VAT issue. National government recognises the issue and, to the extent the
treatment of VAT is not made more favourable than currently appears, and has indicated that it
plans to address the issue with increased PTIS grant funding.
59.
Fare structure
60.
Tariffs
61.
The tariffs from the Airport to the CBD are undercutting everyone.
62.
Existing R50 fare to airport seems fair.
63.
Proposed fare of R8 to the V&A Waterfront.
64.
Need to review the tariffs and the special offers
65.
What about a clip card for Pensioners?
66.
What are we doing to increase ridership with a review of Tariffs?
67.
Should the Tariff review report not go to the Finance Portfolio Committee?
68.
Happy with tariffs as a starting position as increases with petrol and diesel will soon push other
operator’s costs up.
69.
Cost of ticket from Atlantis to Cape Town too high.
70.
Need to review Tariffs to encourage ridership.
See discussion in par 64 in the Covering Statement.
In summary, the comments received on fares have emphasised the need for more work to be
done on the fare structure. At R16 maximum fare, the current proposed fare for Atlantis is higher
than the existing clipcard fare, although it is significantly lower than the daily cash fare - and
whereas users currently pay for feeder links these will be free where used with a trunk.
However, there is a need to pursue the structuring of options which are closer to current fare
levels. Part of the solution lies in greater differentiation between peak and off-peak fares, with
significantly cheaper off-peak options. Also, more ‘transport products’ are required that offer
discounts for regular usage. The City is also considering investigating a ‘loyalty points’ system
as a mechanism for giving reductions for more intensive use. Already, more tariff options are
being introduced for the Inner City service. The scope for greater sophistication in fare structure
depends on the capabilities of the fare system. Scope for innovation will be much greater once
the electronic fare system is in place.
71.
Marketing, branding, communication and stakeholder
management
72.
Marketing, advertising and information
73.
Marketing of MyCiTi inadequate: need to encourage people to use the service
74.
Empty buses from Airport a concern
75.
Need a comprehensive marketing strategy
Comment on BP and City response Dft4.12 101008.doc
A marketing plan for the project is being prepared to see how marketing can be improved in
order to improve use of the current services and prepare future users in the Phase 1 area. It is
imperative to note that a marketing plan is underpinned by a project’s content and deliverables.
Whilst a comprehensive plan is being developed and continuously reviewed, interventions will
be implemented, taking into account the comments made, in parallel to the development of the
Page 23
24
Item
Comments
City response
plan and market research. Agreed that sectors of the industry e.g. Travel Agents etc., needs to
be engaged to explore marketing opportunities.
76.
Marketing budget inadequate: need to invest in the advertising and signage
77.
Marketing needs to be driven with packages in mind via Travel Agents, Car Hire, Airways,
ACSA companies etc
78.
Airport CBD Service needs to be marketed by specialists
79.
Suggestion of a manned MyCiTi information kiosk at the airport
Being investigated at present. Discussions in this regard are underway with ACSA. An interim
measure will be placing MyCiTi ambassadors at the Airport to enhance the experience of using
the MyCiTi service.
80.
Special incentives need to be developed such as Free Fridays, day, weekly and monthly
tickets, attaching MyCiTi tickets to other tickets such as Stadium and Air Tickets
This is being considered in the Tariff Policy.
81.
Inadequate information on routes, stops, tariffs and the service generally
This is receiving attention. A marketing plan will be submitted to the committees soon.
82.
Kerbside stops need to be more visible
83.
Concerted effort required to get people out of their cars onto the bus
84.
City Web site and linkage to MyCiTi site not user friendly.
Greater use needs to be made of the MyCiTi site to provide information.
85.
Need to change human behaviour and get people out of cars onto the buses.
86.
Concern with the amount of time it takes to get marketing initiatives like Free Fridays in place
and information leaflets at the Airport
87.
Back of bus to be used for advertising so that Branding not obscured
Agreed. The full-wrap advertising of the IRT buses was a short-term initiative to gain leverage
from advertising opportunities created by the 2010 FIFA World Cup™. In future only the back of
the MyCiTi buses will be used for third-party advertising.
88.
Marketing opportunities inadequately explored
A marketing plan for the project is being prepared to see how marketing can be improved in
order to improve use of the current services provided and prepare future users in the Phase 1A
area. It is imperative to note that a marketing plan is underpinned by a project’s content and
deliverables.
89.
Branding
90.
Concern that the Coca Cola branding is going to detract from the MyCiTi branding
This was a short-term advertising initiative to gain leverage from advertising opportunities
created by the 2010 FIFA World Cup. In future only the back of the MyCiTi buses will be used
for third-party advertising.
91.
Optimise advertising revenue
Agreed.
92.
Engagement with stakeholders
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25
Item
Comments
City response
93.
Engagement with stakeholders is critical
Agreed.
94.
Need to engage with Golden Arrow Bus Service particularly in Atlantis for Phase 1a
Agreed. There has already been considerable engagement with Golden Arrow about the role
out of the project through the Industry Transition initiatives
95.
Concern with lack of a public process including public meetings
Many public meetings were held in the Phase 1A, especially around Blaauwberg and further
north. However, when some of these meetings were disrupted by members from the taxi
industry, a range of meetings were cancelled or postponed. Ideally more meetings should have
been held. Engagement with the public is picking up again.
96.
Need to be conservative with dates of implementation and not raise expectations as at
Woodbridge Island
Agreed. One of the major challenges around communication of the project’s deliverables is
shifting project timeframes.
97.
Need for more information
The project submits monthly or bi-monthly reports
98.
Imperative to have the buy in of all Councillors
Agreed –This buy-in has already been augmented through presentations and workshops with
the relevant portfolio committees and the introduction of the Project’s monthly report which
provides information for all councillors on all aspects of the project’s progress. This can be
further improved through responding to requests for presentations to relevant councillor groups.
99.
Suggest up to date presentations at all party caucuses
These could be facilitated through the Whip’s office with a clear understanding of the areas of
emphasis required.
100.
Need to engage with the Chamber of Commerce and respond to their concerns
Direct meetings have been arranged.
101.
Taxi Industry
102.
More intensive engagement with Taxi Industry urged to prepare way for future roll out to other
phases.
Very considerable progress has been made with directly affected operators. The general view is
that success in engaging with operators directly affected by Phase 1A is the most important
factor in successful engagement more widely. It is difficult to engage in other areas because of
the lack of certainty on roll-out and how it will affect these operators.
103.
Displacement of existing Bus and Taxi operators a major issue
The City approach is explained in detail in Chapter 10 of the Business Plan.
104.
Concern that inadequate engagement has taken place with the metered taxis at the airport.
This will become more important as the MyCiTi airport service becomes more successful.
However, the City has already indicated that it does not propose these services to be terminated
– ie that they will continue to operate in parallel with the Airport service. The City has also
indicated to the relevant association that compensation could be considered, provided an
equivalent number of licences are tendered for cancellation.
105.
Institutional structure and organisation
106.
Municipal Entity
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107.
Concept of a Municipal Entity needs to be explained in greater detail before commitment to
this concept
108.
Conditions of Service for staff in a Municipal Entity relative to those in the City queried
109.
Queries about the election of the Board, who pays the Board, who does the Board report to in
Council
110.
What is the internal mechanism that will be used to manage IRT operations while the
Municipal Entity comes into being?
City response
Based on current thinking, the Municipal Entity will only be implemented once the system is
properly established. The key motivation is that it allows for a less bureaucratic and more
entrepreneurial approach. There is a danger that by initially running the Municipal Entity tasks
in-house adverse precedents will be set in terms of responsiveness and flexibility. On the other
hand, there is a view that greater certainty is required before establishing such an entity. The
interim solution is departmental, based on two City employees at the City director level reporting
to the ED of Transport Roads and Major Projects.
Conditions of service would be set by the municipal entity, as by any other company. There are
various legislated process regarding municipal entities. These include: the City setting the upper
levels of the Accounting Officer (CEO) and senior staff reporting directly to the CEO; the
appointment of the non-executive directors to the Board, the establishment and number of
meetings of an Audit Committee, internal audit requirements, written delegations, internal
policies, fraud detection and risk management, etc. Interaction with a municipal entity is, in
terms of legislation, between the Mayor of a parent municipality and the Chair of the Board. The
operations of the Board are managed by the parent municipality in terms of a service delivery
agreement.
111.
Impact of IRT on the Administration
112.
Concern was expressed that with the formation of the IRT Project Team there were negative
knock on effect in other Departments such as the Transport Department.
These need to be managed. It should also be noted that the IRT project was initiated in the
Transport Department and that those staff seconded from the Transport Department to the IRT
project would have been engaged working full time on the project.
113.
Operator contracts
114.
Are there adequate conditions and penalties built into the Contracts with the Operating
Companies to ensure the buses are kept well maintained and clean?
Yes, the contracts provide for extensive conditions and penalties to ensure quality of service.
115.
Query as to what measures are to taken to accommodate any redundant Golden Arrow Bus
Company employees.
Full-time workers in the affected taxi and bus industry will have preferential access to jobs in the
new system. One of the main aims of the IRT is to substantially improve the work environment
for those currently employed. Many of the current drivers and staff are without employment
benefits such as leave, sick leave, health care, maternity benefits and pensions. The new
system will provide these benefits as well as safer working conditions, a stable salary and
regular working hours, while enhancing professionalism and career development.
The City is working to increase overall employment in the public transport sector. In the new IRT
System there will be opportunities for employment as drivers as well as other full-time jobs, such
as in maintenance, customer service and security. Employment is expected to grow because of
the emphasis on customer safety and quality of services, such as that the system will run for
longer hours every day. Also, although there will be fewer vehicles than at the moment, there
will be multiple shifts for drivers.
116.
What contingency plans were in place for strikes in the Operating Companies?
Comment on BP and City response Dft4.12 101008.doc
Since there are two companies contracted to provide the vehicle operations services in Phase
1A, where one operator cannot deliver a service the other can too. Secondly, a strike-response
strategy will be in place. One option is that City officials with the required licences may be
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City response
requested to provide the relevant services.
However, it is possible (as it is at present) that services could be disrupted significantly by
strikes.
117.
Bus ownership
118.
Additional information is required on the Bus Ownership model that is being proposed
119.
Requirements of MFMA in relation to asset transfer
This is dealt with in detail in the Business Plan and in the Information Statements issued for
comment in terms of the MFMA determined processes – see Annexures E and F, starting
respectively on pages 149 and 155.
120.
Monitoring of roll-out
121.
Programme of Works and Performance of Contractors
Agreed. This is being done in detail at present. In addition, the regular Progress Reports give
regular update to the Committees and the public on progress.
122.
Contractors must submit regular progress reports and comply with contracted completion
dates
All engineering contactors engaged in the project are carefully monitored in terms their
respective conditions of contact and progress, quality and cost are regularily reported.
123.
Need to provide detail on what is happening between now and April 2011
Provided in Business Plan and in regular Progress Reports.
124.
2010 World Cup Event Transport Service
125.
Appreciation for excellent transport service during 2010 World Cup expressed.
126.
Councillors thanked the staff for their effort during the 2010 World Cup.
Noted
Chamber of Commerce
See also from item 849 for the Chamber’s comment on the s33 info document.
127.
Introduction
128.
The Cape Chamber of Commerce strongly supports the initiative the City Council has taken to
bring about the creation of an effective, modern public transport system.
Noted
129.
We have argued for decades that a co-ordinating body was necessary to take responsibility for
the integration of existing public transport operations, improve efficiencies and extend
services, but our proposals for a Metropolitan Transport Authority to do this work have come to
nought. The reason appears to be that national, provincial and municipal interests could not
agree on how to go about the task. Now, prompted by the need to provide services for the
The National Land Transport Act (2009) effectively devolves public transport responsibilities to
the City. This is partly behind the more determined City led initiative.
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Transport Authorities are no longer provided for in legislation. Constitutional constraints on the
powers that can be assigned to Transport Authorities resulted in these being very weak bodies,
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2010 World Cup, the City has taken the initiative and the indications are that the embryo
service created for the event has been well received by the public. We now have an
opportunity to move forward and give Cape Town the public transport service it needs.
130.
Having said this, we have some serious concerns about the methods and model chosen by
the City to create the new era of public transport.
City response
which lend themselves to confusion between political and operational authority. Only one was
created (eThekwini) and it has now been abolished.
There has been a lack of clarity over the sharing of Public Transport responsibilities between
spheres of government. This has now been clarified by the National Land Transport Act. The
City must take up its responsibility for the provision of the service and retains authority and
responsibility for the service even if the service delivery is provided by an external mechanism
such as through contracts or an organ of state other than the municipality. This is in terms of
section 78 of the Municipal Systems Act. In the present legal framework, a Municipal Entity with
the assigned responsibility of operation of relevant integrated public transport services, as is
envisaged in this Business Plan, initiates the closest feasible equivalent of a Transport Authority
within the new legislative framework.
As explained in Chapter 7 of the Business Plan, the City embarked on a s78 of the MSA
process and Council supported a Municipal Entity as the appropriate mechanism to provide
(manage the operations) of municipal public transport services. The establishment of the
Municipal Entity can however only proceed after the process required in s84 of the MFMA has
been followed. In the course of the latter process, which has not been completed, Council
decided to first assess more fully the implications of the initial phases of BRT services. In the
interim, City has established internal capacity to manage the provision of the BRT services by
appointed service contractors.
131.
Cost of the project
132.
Our reading of the “business plan” leads us to believe that the City intends to take over and
run all road-based public transport. This is an enormous task and the cost will be roughly
equivalent to one third of the City’s massive R19.2 billion rand budget. The estimated cost of
the full project is R6.14 billion per year in 2010 rands or 32 percent of the municipal budget. To
put this figure in perspective one should note that the City’s total income from property rates,
penalties and charges amounts to 21.6 percent of the Budget.
133.
In the plan the City provides for a yearly deficit of R440 m on road-based public transport. If
the assumptions and projections built into the model prove to be inaccurate the deficit could be
very much larger and pose a significant risk to the City’s financial stability.
134.
The city has no experience in running public transport and this increases the risk of getting it
wrong.
The vast majority of operational activity will be undertaken by private companies contracted to
the Municipal Entity (or the City in the period before the ME is established).
While the Business Plan spells out the full vision, it commits the City only to Phase 1A of the
system, which represents roughly one-tenth of the road-based system. The projection of R440
m relates to the total system and not Phase 1A.
The financial risks of lower income or higher costs are understood and the Business Plan has
examined and provided for a range of scenarios for Phase 1A. Experience gained here will be
applied in planning and implementing further rollouts. The City believes it would be
advantageous to have a clear ring-fenced revenue stream – ideally a share of the fuel levy
collected in the metropolitan area – to finance the system. This would create a sufficient yet
hard and predictable budget constraint to which the system would be tailored.
Most operations will be run by external parties. However, for reasons explained in the Covering
Statement (appears from page 5), the City needs to play a more active strategic role in creating
a framework for public transport service delivery.
The City has drawn on a very experienced international team in developing its strategies
135.
We are also concerned at the vagueness which persists in the “business plan” and believe
that a “feasibility study” would be a better description of this 141-page document.
Comment on BP and City response Dft4.12 101008.doc
The Business Plan provides only a strategic summary of extensive and significantly detailed
work across a range of areas.
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136.
A flawed process
137.
The City’s call for public comment on the plan has already caused some confusion. Initially we
were asked to comment on a summary of the plan by July 31 this year. We did so but before
this comment could be considered the City compiled and approved a second document with a
new request for comment by the end of August.
The process of consulting the public is complicated by the fact that legislation, particularly, the
Municipal Finance Management Act, requires consultation around specific decisions to a
timetable defined closely by that decision. The City has sought to make the process more
coherent by putting the whole Business Plan out to comment. However, to meet legislative
requirements we are forced, in addition, to put certain decisions to the public for responses in
terms of the timetable of that decision process. Ironically, by paying close attention to avoiding
legal challenge, the process has become more confusing.
138.
Now we have a further call for comment on the financial, sale and leasing of the buses before
September 21.
139.
In the meantime the City has already advertised for service provider contracts. This is in line
with the proposal to share the job of running the transport service with four companies that will
each undertake different aspects of the service such as operating the buses, collecting the
fares, managing the bus stops and the fleet control system. This action by the City presumes
that the plan for a municipal entity and four other companies will be approved.
The City is well advanced in the tendering process for sub-contractors, although tenders have
not yet been awarded.
140.
The Chamber views this segmentation of the service as one of the main weaknesses in the
plan and a feature that is likely to attract a great deal of comment. This leaves the impression
that the City has already made up its mind and that the present consultation exercises are
simply designed to meet legal requirements in terms of the Municipal Finance Act and that the
City has no real interest in comment on this fundamental aspect of the plan.
Re the concerns regarding segmentation of service – see the Covering Statement (appears
from page 5).
141.
We feel, therefore, that the process is flawed and could, in the worst case, be the subject of a
legal challenge.
The City is paying very close attention to meeting legal requirements.
142.
Extravagant claims
143.
The City has already stated that it plans to introduce a superior service at a comparable cost.
It plans to take over or absorb all the present road-based public transport operators and
assures us that they will not be financially worse off and that no jobs will be lost. The new
buses are expensive and so is the infrastructure and the cost of municipal supervision. In
addition, the use of different companies to provide different parts of the service will complicate
matters and this will increase costs. In view of the additional costs it is difficult to see how the
comparable fares will be achieved.
Please see Covering Statement
144.
In spite of this the “business plan” clearly states (page 10, Par 2.6) “The MyCiTi system will
offer a considerably higher level and quality of service than is provided by the current roadbased public transport operators at fare levels that are more or less comparable.”
Please see Covering Statement. Note also that the current road-based system includes both
buses and taxis.
145.
Since most MyCiTi passengers will have to stand, the claim cannot be substantiated and could
be considered irresponsible. It will do nothing but raise expectations leading to disappointment
On the route from Atlantis the service has been sized such that most passengers should be
seated. Standing will be required mostly in peaks over relatively shorter distances and times.
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and problems later on.
146.
According to the plan some 300 buses are required to cover a distance of some 100km with a
human resource support system which is double the staff-to-bus ratio of the current operator in
the area.
147.
These projections appear to be unreasonable and inaccurate.
In Phase 1A we need 310 buses which will replace (both) current buses and taxis operating
within the phase 1A area. It is envisaged that the proposed IRT staff will cover existing functions
and more of the current bus and taxi staff. This will include: Station staff; depot maintenance
and repair; and many others providing a range of services that will result in the IRT offering
world class public transport.
148.
Operating model
149.
We are concerned that the City has no experience in running public transport and that it may
not have the expertise to do so. Unlike Johannesburg and Durban, Cape Town has never run
a municipal bus service and has no experience of the heavy losses which those cities
recorded year after year. If a history of losses were part of the City’s institutional memory, we
believe there would have been a great deal more caution in costing the first legs of the new
service and we would not have had the initial gross underestimate that brought so much
embarrassment to the City.
The City is not proposing to implement a municipal service. The model is designed to have the
private sector run the service, but within an institutional framework that provides for competition
between service providers rather than a monopoly.
150.
The Chamber believes that the statement that the high density/short travel distance model is
easily applicable to Cape Town’s low density/long travel distance is incorrect. Such an
assumption can destroy the viability of the entire project.
On the suitability of the model to Cape Town’s low density, please see Covering Statement
(appears from page 5).
151.
The service appears to be based on the South American operations in Curitiba and Bogota
and there are good reasons to believe that this might not be an appropriate model for Cape
Town. In the first place, the Columbian cities have high population densities and the average
bus trip is only 7km. Cape Town population densities are lower and the urban sprawl has
ensured that the average trips will be much longer – anything from 15 to 40 km. In addition the
road infrastructure, freeways and car ownership patterns are different and we should take into
account the advantage of a rail network to serve commuters in large areas of the City.
152.
Applying the Columbian model to Cape Town produces some unacceptable results. The 12metre bus, for instance carries 36 to 44 seated passengers and 47 to 58 standing ones. The
18-metre articulated bus carries 58 seated and 88 standing passengers. This means that most
passengers will have to stand. This may be acceptable in Columbia where the average trip is
7 km but it will not be acceptable in Cape Town where trips will be much longer.
153.
In addition the service will have to win passengers from taxis where they are all seated and
from private cars which provide seats and often air conditioned comfort. It should also be
noted that, presently, 90 percent of the passengers on Golden Arrow and Sibanye buses are
seated.
154.
The fact that most passengers will have to stand on MyCiTi busses destroys the City’s claim of
providing a “superior” service. The Chamber believes it is unrealistic to expect passengers to
Comment on BP and City response Dft4.12 101008.doc
Note that BRT is more appropriate for lower densities than rail. If the city is deemed too low
density for BRT, it is certainly not appropriate for rail services.
In addition one needs to consider the developmental opportunities that such a system will
create and the impact this will have on the structuring of the city and in particular the future
densification of these corridors.
Further one needs to consider the capacity of the existing road infrastructure and ability to
manage increasing demand. Continued investment in road infrastructure to meet unconstrained
demand will not be forthcoming. The City certainly needs to take positive action now to secure
public transport corridors , it is something we cannot not afford to do.
The service has been modelled and sized to provide for minimal standing only along a portion of
the R27 (Atlantis – Bayside) and along the N2 for passenger safety reasons. Along these
portions the current speed limits provide an unsafe environment for standing passenger. On all
other Phase 1A routes the maximum capacity (incl. standing) has been modelled, but are only
likely to materialise during peak period. The distances will result in a maximum of 30 minutes
travel time. Modelling shows that many people will disembark on route, vacating seats that can
be taken up by standing passengers.
Seating design and capacity has been optimised to adequately accommodate universal
accessibility and freedom of general movement in the bus. Increasing the number of seats will
reduce freedom of movement as well as the unit capacity, which impacts operational costs.
Current aisle widths in the standard Golden Arrow vehicle do not allow free and swift movement.
The current fleet design therefore provides the optimum mix between standing and seated
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give up the seats in cars, taxis and buses to become standing passengers at a similar cost.
City response
passengers.
155.
The contracting companies
156.
157.
A main concern is the decision to create a Municipal Entity to run the new transport routes and
then to contract four other companies to run the buses, run the fares and ticketing system, run
the fleet control system and yet another company to maintain the bus stops and stations as
well as provide the cashiers and customer service agents. This would effectively break the
service down into five separate parts with no guarantee that the different contracted
companies will be able to work together.
The result will be a considerable management burden on the municipal entity which will have
to deal with possible disputes between sub-contractors on a wide range of issues. For
example there would appear to be a good chance of friction between the company that
controls the fare system and the company that provides the cashiers.
158.
Similarly, the operating company will be paid for the mileage it covers irrespective of
passenger loads. There will be no incentive to maximise the number of passengers and a
driver could well miss a bus stop to save time. The loser would then be the fares company and
a dispute would be likely.
159.
A further problem is that bus drivers will be paid by the vehicle operating company but will
have to take orders from the Municipal Entity when they leave the depot. In the case of a
dispute the different contracting companies, the ME could act as a neutral referee. But who
will referee a dispute between the referee (the ME) and a contracting company? It is difficult to
see how this arrangement will work in practice.
160.
It is also likely that each sub-contracting company will try to be as profitable as possible and
this might well increase costs rather than improve efficiency.
161.
It is the Chamber’s view that bus operating companies have a better understanding of the
supporting services they require, how to obtain them and how much they should cost than any
new Municipal Entity is likely to have. We also believe that if the service providers were
contracted to and reported to the bus operating company or companies there would be clear
reporting lines, a reduction in the overlap of responsibilities and a much firmer hand on costs.
This would improve viability, reduce the possibility of conflict and ensure a better service.
162.
The Chamber proposes that a single company runs the entire operation.
Please see Covering Statement (appears from page 5) regarding this issue.
The approach being adopted here is based on modern, proven business models.
The approach adopted allows ‘best of breed’ capabilities across functions which are clearly
different and separation of activities where this is logical.
One area that could have been provided by a single company on an integrated basis was the
Control Centre and Fare System Contracts. The tendering process provided for this; however
the market response demonstrated that these capabilities at the level of sophistication required
did not exist in combined form.
Close attention is being paid to integration. The city is considering whether to apply further
resources to thoroughly auditing whether the task of integration of the Control Centre and Fare
system is properly implemented.
The alternative model whereby a single company runs the entire operation will (a) create a
monopoly provider, which over the long term reduces efficiency; (b) does not allow for the
creation of formal vehicle operating companies out of the minibus taxi industry, which then
participate as competitors within a formal framework; (c) does not provide for a ticketing and
control system that will be able to incorporate rail services and so establish a truly integrated
public transport network.
163.
The Municipal Entity
164.
According to the estimates in the plan, the Municipal Entity will have a budget of R25m and,
eventually, there will be 31 managers (See diagram Page 76). In addition it will need
supporting staff. The cost of this bureaucracy is likely to be considerably more than R25m. In
addition the plan does not provide for a dispute resolution service which we believe will be
Comment on BP and City response Dft4.12 101008.doc
The Municipal Entity will be created and grown according to need. The budget of R25m (at least
in initial years) is not unrealistic given the fact that most operations are performed by private
service providers.
The contracts should be so drafted as to prevent disputes as much as possible, by clarifying
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165.
Comments
City response
necessary.
who is responsible for what, and what the required standard of service is. Where disputes arise
that contractors cannot resolve, the Municipal Entity will attempt to resolve them. If they are still
not resolved, the dispute resolution steps set out in the contract will be followed.
The Chamber is of the view that in creating the infrastructure and purchasing the buses, the
City has done its job and all it should now be required to do is call for tenders to operate the
buses with the successful bidders free to use the service providers and software systems of
their own choice.
This is not a feasible or sensible approach. See Covering Statement (appears from page 5).
166.
Costs and subsidies
167.
Municipal bus services around the world require substantial subsidies. In Cape Town the
subsidy is as high as 50 percent. With contributions from the Department of Transport on the
decline, we must ask how much will be needed and where the money will come from. Property
rates are already very high and we would like to know whether the city is planning to introduce
new sources of revenue such as taxes on parking garages or tolls for commuter cars entering
the city?
National Treasury, the national Department of Transport, the Financial and Fiscal Commission,
and various city governments are all applying their minds to long-term funding of public
transport.
The City is in favour of a predictable and sufficient revenue source other than property rates
dedicated to public transport, and recommends that this be a share of the fuel levy. This will
provide a clear and sustained budget envelope within which to address public transport.
168.
The City plans to use a share of the fuel levy and property rates to subsidise the service.
Since the City has no say or control on how revenue from the fuel levy is apportioned the fallback will be property rates and the predicted “take” of one percent could be a serious
underestimate.
The City is satisfied that its exposure to property rates impacts arising from Phase 1A are
manageable. Experience in Phase 1A will determine on what basis the system is rolled out
further.
169.
We note with grave concern that the “business plan” makes no provision for law enforcement.
Given the history of the taxi industry it is highly unlikely that there will be universal acceptance
of MyCiTi plans and law enforcement will be necessary to ensure that those operators which
have been compensated up to R400 000 for the “loss” of their business do not attempt to
restart their businesses.
This is an issue of potential concern. The IRT team is engaging with the City’s law enforcement
services in this regard. The intention is that a SLA be concluded for appropriate law
enforcement services.
170.
Assumptions and projections
171.
We expressed the concern in our earlier submission that too much of the plan was based on
the notion “the model tells us”. If the input figures into the model are incorrect, the model will
provide the wrong projections. It will be the old computing story of garbage in and garbage out.
The transport demand model is a tool to aid decision makers on travel behaviour patterns.
Without such a tool, it is difficult to project accordingly. The city calibrates this model with
current transport data and surveys.
The City has done very extensive modelling based on current public transport ridership demand
and is satisfied that it has a reasonable degree of confidence in these results. The
implementation of the Airport service was an exception since there was no existing equivalent
service on which to base modelling. Its implementation was driven by World Cup FIFA
requirements and under normal circumstances would only have been introduced once
significant other parts of the network were in place.
172.
The normal business approach to the provision of a new service would be to determine the
need for it and then, with a clear idea of the likely demand, design a service to meet the
estimated needs. Instead the City has bought the busses, started work on the infrastructure
Comment on BP and City response Dft4.12 101008.doc
Incorrect statement. Extensive planning, investigation and modelling preceded the acquisition of
buses and the current construction work.
However, it is correct to say that normal business processes were challenged by the FIFA 2010
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City response
and is now trying to work out a plan on how to use the buses.
timetable, resulting in some services, such as the implementation of the airport service, having
to be advanced with unsatisfactory consequences.
173.
As an example we would point to the assumption that advertising revenue would bring in
between R20m and R10m a year. Experts in the field regard even the lower figure as
extremely optimistic. The Chamber views this assumption as unrealistic given the City
Council’s long history of opposition to outdoor advertising, its rejection of advertising on litter
bins, bus stop shelters and public toilets. Advertising on buses and at bus stops will not be
permitted by the City Council unless there is a radical change in policy.
The figure of R20 million was based on a study done by the outdoor advertising industry.
Whether this potential is realised will be dependent on City Council policy to advertising on the
public transport network.
174.
The assumption of R20m to R10m from advertising is unsubstantiated. Surely it would have
been possible to obtain figures from the outdoor advertising industry as well as existing bus
and taxi operators who are in a position to provide firm evidence of demand and tariffs.
175.
In the circumstances we are tempted to believe that some of the assumptions and projections
have been tailored to produce the desired result.
This is not the case. As part of the Project review process, a transport demand modelling audit
was done by local independent experts who concluded that the model architecture was sound.
They also assessed the assumptions. Some assumptions and model inputs were amended and
improved in the audit process. The figures contained in the business plan are based on this
improved model.
176.
The airport service
177.
At its August meeting the City Council approved a service between the airport and the Civic
Centre at a cost of R50 with the expectation that it would be used by 8 200 passengers a day.
No justification was given for this assumption. The figure seems extraordinarily high to the
Chamber. It is equivalent to the full passenger complement of some 55 airliners with 150
passengers, or 20 fully laden 747 Jumbo Jets per day.
178.
An average of 8 200 passenger a day would add up to 254 200 passengers in a 31-day month
and would come close to the June record of 261 260 domestic passenger arrivals for the
World Cup. There would be a similar number of departing passengers so the city figures
assume that MyCiTi will capture half of the domestic market. What is the basis for this
assumption? The number of international passengers (43 000 in June) varies with the season
but is much smaller that the domestic tally.
179.
MyCiTi would have to compete with transport provided by relatives, business associates,
hotel shuttles and other airport transfer services. Many more passengers will use hired cars
while other will use private cars garaged at the airport for the duration of the business trip.
180.
More important, however, is that most passengers do not want to go to the CBD but to the
residential areas to the north, south and east of the City as well as to neighbouring towns.
The Full IRT roll-out city-wide plan involves and shows other routes.
181.
In the circumstances the City’s estimates seem wildly optimistic and the Chamber would like to
know whether any proper survey was done through travel agents or a cross-section of
passengers at the airport. If a survey was done why were figures not included to give
credibility to the projections in the report? A survey might have revealed that services to, say,
Tyger Valley and Constantia Village might have enjoyed more support and given MyCiTi a
The City acknowledges that these figures are projections and attempts to attract currently ‘car
captive’ users to a public transport system. This can only be achieved by an effective system
design, frequent and convenient system, continuous monitoring and improvement and
aggressive marketing. The city is also currently investigating attracting other target users (like
N2 commuters) through possible park and ride initiatives at the Airport.
Comment on BP and City response Dft4.12 101008.doc
As indicated above, the implementation of the airport service was driven by World Cup FIFA
requirements and under normal circumstances would only have been introduced once
significant other parts of the network were in place. Having implemented the service it is difficult
now to halt it until the network is more established.
The figures quoted here are incorrect. Our model has predicted and designed for a total one–
way volume of 232 pax/hr on the Airport service when the full phase 1A is implemented. This
translates to approximately 1 500 pax/day in one direction. Monthly this translates to
approximately 46 500 passengers, i.e. less than one-fifth of the figure given here by the
Chamber - see Business Plan, Table 2, line item T02A.
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better chance of becoming viable.
182.
Political risks
183.
A further assumption seems to be the belief that the present public transport operators will fold
up into the new MyCiTi venture without complaint. This is unlikely and it is reasonable to
expect tough bargaining on matters such as shareholdings and compensation. The outcome
of those negotiations cannot be predicted and could have a significant effect on the costs and
structure of the MyCiTi service. There is a risk of disruption and court applications which could
delay the project and drive up costs.
There are numerous risks involved in implementing a project of this complexity, particularly in
relation to incorporation of the existing industry into the new system. We would note, however,
that considerable progress has been made. Most minibus taxi industry associations affected by
Phase 1A are now actively engaging with the city on how implementation will take place. The
World Cup services were successfully provided by a company formed out of the minibus taxi
industry.
The new model does threaten the monopoly currently enjoyed by Golden Arrow and its
subsidiaries within the formal bus sector and we would thus expect some opposition from this
organisation, too However, we are engaging with these operators with a view to optimising
arrangements in the overall interests of the citizens of Cape Town.
184.
A further major concern is that the greater the municipal involvement, the greater the risk of
yielding to political pressure on matters like routes and timetables. “Popular” decisions would
tend to undermine the viability of the service and the city’s proposals to insulate the municipal
entity responsible for the service from the City Council are not convincing.
The City agrees that public transport is an area subject to populist pressures. However,
ultimately the city cannot absolve itself of all pressures, and given its significantly increased
responsibilities in public transport since passage of the NLTA, must find ways of addressing
these. The proposed model should assist in managing these and would be much improved if
there was a clear and predictable budget envelope as discussed above.
185.
Transport co-ordination
186.
The plan fails to deal with the old problem of a lack of co-ordination between rail, bus and
mini-bus services. In fact, it might be argued that the City is complicating the problem by
bringing new operators and services into the picture, making it more difficult for any future
umbrella body to co-ordinate public transport.
The approach proposed is precisely aimed at facilitating co-ordination between modes while
providing for competition between service providers. In fact, the IRT is merging the businesses
of the bus and minibus-taxis, as they will be the operators of the new system.
The model proposed by the Chamber will not allow for competition within the road-based sector
or allow integration of ticketing across modes.
Integration with existing services at points where transfers may be required needs more
attention. This is especially important during the initial years of rollout.
187.
Conclusion
188.
The Chamber would like to stress that we have a great opportunity to create the public
transport service Cape Town deserves but it is essential to get the formula right. We have only
one chance and we cannot afford to blow it.
There is no alternative but to move towards a greatly improved public transport system. The
path towards this system is understood to be a learning experience. The City will be reviewing
the model and system during Phase 1A and making changes as required. In this sense Phase
1A is a pilot phase.
189.
We believe that the “business plan” or “feasibility study” is seriously flawed, based on
unfounded assumptions and could prove to be so inaccurate that the entire project might have
to be aborted for reasons of affordability.
We do not agree with this statement. It is true that one cannot be sure that the model has it
100% right. However, the City has done the best within present constraints. See responses
above regarding the assumptions used.
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190.
The Chamber therefore calls for a second professional opinion or an independent review.
191.
A second opinion might be costly initially but could have the ultimate benefit of ensuring that
Cape Town gets an affordable service with comparable level of comfort.
City response
The City has already subjected the plan to an independent review conducted by a consortium of
auditors, engineers and transport experts. This resulted in some changes to its initial plans but a
confirmation of the validity of the essence of the approach.
Golden Arrow Bus Services (Pty) Limited
See also from item Error! Reference source not found. for GABS’ comment on the s33 info
document.
192.
Introduction
193.
Prompted by the City’s invitation to comment on the latest version of its Business Plan for the
MyCiTi Integrated Rapid Transit (IRT) system that will formulate the policy to be adopted by
Council in respect of IRT, Golden Arrow Bus Services feels compelled to comment. Given the
company’s legacy of having provided bus services in the City for almost 150 years, Golden
Arrow believes it can offer a pragmatic, solution based overview of the way forward for public
transport in the metropole. Our fundamental point of departure is that the future public
transport blueprint for the City has to be driven by sustainable principles that derive
efficiencies from all the resources harnessed to operate the system.
Noted
194.
There is a place for all three transport land based modes (trains buses and taxis) in South
Africa – each has a specific role to play and government needs to invest judiciously in each
mode. An optimised public transport system based on integrated rapid public transport
networks (IRPTNs) can go a long way in alleviating the pressure on existing systems while at
the same time providing better services to the public.
Agreed.
195.
Integrated Transport Plan
196.
This, however, needs to be spelled out in a properly researched Integrated Transport Plan
(ITP). Certain corridors should have preferential modes while others (such as from
Khayelitsha) are ideally suited for the simultaneous operation of all three modes. The issue of
funding of public transport should also be dealt with in the ITP since there are currently,
contrary to the grand vision of government, simply not enough funds allocated to radically
improve transport offerings to the public.
The ITP addresses these issues at a high level. The introduction of BRT changes the
environment considerably. Modeling is being undertaken to assess the impact beyond Phase
1A.
197.
The City of Cape Town is endowed with an extensive rail infrastructure network which does
and should constitute the backbone of the integrated transport system planned for the
metropole. This system carries 600 000 people every day and during the recent Soccer World
Cup, the institution of park and ride facilities adjacent to strategically located stations ideally
complimented other modes.
Noted
198.
It is imperative that this is further supported by planned station upgrades and ongoing
investment in rolling stock to replace ageing train sets and the accommodation of growing
Noted
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patronage brought about by creeping urban sprawl. The vexing problem of fare evasion which
is endemic to the local train service has to be aggressively addressed through a combined
strategy of enforcement and access controls as the revenue losses resulting from this will
continue to undermine the overall pursuit of financial sustainability and adequate returns on
the substantial capital investment.
199.
Rail should therefore be induced to operate to their full potential over the medium term and
this will certainly bring about major alterations in passenger behavior as well as possible
changes in choices of modes of public transport. One would then be in a position to observe
more realistic commuter patterns and effectively design the roles and functions of supporting
services provided by buses and taxis.
Noted. Rail is a key priority and developments in rail will impact on the metropolitan system as a
whole.
200.
The minibus taxi industry has firmly established itself as a public transport mode over a period
of 30 to 35 years. Despite their deplorable record of serious accidents, poor road behaviour
and intermittent violence, they have become a vital component of the transport scene in South
Africa. IRT offers an excellent opportunity for them to move out of their current unstructured
environment to enter the formal business environment and enjoy the benefit of subsidised
services.
Noted
201.
However, during consultations, the taxi industry representatives have been told they will not
suffer job losses because they will be part of the entity that runs the BRT systems. Details of
how their share of the operating entity will be structured have not been forthcoming and the
industry is suspicious of promises and fears losing that which they currently have.
There has been extensive and ongoing engagement with the industry, and these issues are in
the process of being discussed and worked on.
202.
One of the reasons the taxi industry has become so chaotic, is the fact that traffic law
enforcement has been largely absent over the last three decades. Where law enforcement has
been applied, it has been sporadic and ineffectual. It is of no consequence having a traffic blitz
once every few weeks as traffic laws must be enforced continuously to have any effect. Nonroadworthy and unlicensed minibus taxis (and other vehicles) and unlicensed drivers must be
taken off the road while those guilty of breaking the law must be penalised harshly.
Noted
203.
The supply of minibus taxis must be controlled and only taxi owners with operating permits
must be allowed to buy these vehicles. Drivers have to be in possession of valid Professional
Driving Permits (PRDPs) and the operators be compelled to have passenger liability and
vehicle insurance coverage. These should be prerequisites for creating a reliable minibus taxi
industry, building on its strengths and enabling it to become a viable and vibrant part of the
urban public transport system as a whole.
It is difficult to see how the state could restrict purchase of vehicles in this way.
204.
Drawing from best international practice, policed dedicated bus lanes have proven to be the
most cost effective deterrent to congestion as this provides for unobstructed bus movements
and faster travelling times as has been achieved on the N2 BMT lane when vigilant and
consistent law enforcement have been applied. There are other routes in the city (inter alia the
Klipfontein and Lansdowne road corridors) which could also derive the benefits of dedicated
public transport lanes and allow for the rapid movement of passengers from high density
communities domiciled far distances from the CBD.
The City agrees that dedicated roadways are crucial for the public transport system.
205.
A further limiting practice has been the moratorium placed on the approval of new bus routes
by the National Department of Transport (NDoT) in 1997. This has hampered the ability of the
Noted. It is not clear whether this would imply additional subsidy requirement.
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Agreed that drivers should be qualified and appropriate insurance be in place.
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bus operator to expand its services which has fuelled the use of the private car and has
generally dissipated confidence in public transport. Should the moratorium be lifted and new
subsidised routes proclaimed, Golden Arrow could introduce 200 buses to extend its services
to far-flung communities and alleviate the burden of inaccessibility to public transport.
206.
It is internationally accepted that buses are the most economical way of conveying passengers
over longer distances. Supporting bus and taxis services should therefore be configured in a
manner that allow taxis to feed passengers to buses at central points in residential areas with
the buses then operating long hauls to the end destinations. In this way, buses will save time
and costs by not having to meander through residential areas and having to stop intermittently
to load passengers. This should pave the way for the formation of joint venture partnerships
between buses and taxis which could be the basis for sharing in the government subsidy.
Noted
207.
The City’s IRT Model
208.
The IRT model advanced by the City has borrowed heavily from the South American system.
As opposed to Cape Town, most of the South American cities where IRT has been
implemented have high population densities. In Bogotá, for example, the average trip length is
only 7km whereas in Cape Town most trips exceed 20 km and some are up to 40 km.
According to the proposal contained in the Business Plan the fare from Atlantis to Cape Town
will increase by more than 30% compared to the existing bus fare which commuters will be
able to ill-afford.
Please see Covering Statement (appears from page 5) and the response to Chamber of
Commerce submission in items 150 to 154. The City is addressing the fare issue as described
in the Covering Statement.
209.
In the City of Cape Town we have to contend with extensive urban sprawl, which negatively
impacts on bus running times and leads to lower asset utilisation and increased operational
costs. We are of the contention that these variables have not been sufficiently factored into the
cost projections of the IRT model which has to an extent been borne out by the R1,4 billion
under - budgeting debacle at the beginning of the year.
Please see Covering Statement and the response to Chamber of Commerce submission above.
210.
The costs to build the extensive infrastructure and allied support services (law enforcement,
ticketing, fare collection, etc) that IRT requires are considered unpragmatic in a city with a
strong rail component. The proposed system, which will have to employ nearly double the
number of people per bus when compared to the existing private bus operators, are unlikely to
be sustainable given our city’s low passenger volumes and urban sprawl.
The existing rail system is focused on radial routes from the CBD. There are a number of trunk
routes – especially routes which traverse the current rail system - which require a more
substantial system than conventional bus. However, BRT is a much cheaper and more practical
option than rail for these.
211.
Furthermore, the misleading assumption, propagated by the architects of the IRT that the
system would be able to operate without any form of subsidy support after the initial
substantial investment, is clearly evidenced in the projected R116 million per annum
operational deficit of phase 1A, which is nearly double the current (R60 million / annum)
subsidy supporting services along the Atlantic corridor.
Noted.
212.
In addition, the City lacks the promulgation of associated by-laws to mitigate private car usage
and promote the use of public transport through curtailing the use of cars by inter alia number
plate restrictions; car free days; fuel levies; increased rates on office and parking garages in
city centres and bus priority signalling within dedicated bus lanes.
As the City takes increasing responsibility for public transport, it is likely that these matters will
be addressed.
213.
IRT buses are configured with fewer seats and have mostly standing room. This arrangement
will undoubtedly prove to be most uncomfortable for passengers travelling the 50 km from
The modeling for Atlantis is based on most passengers being seated for this route. Standing is
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214.
Comments
City response
Atlantis to Cape Town. Currently, passengers are transported in new buses that have
sufficient space for seated passengers while the fares contained in the City's Business Plan
are projected to be between 25-33% higher than the current bus fares on the same routes.
likely only in peak periods, on short routes.
The recently instituted airport shuttle, commendable as it may be, is problematic when the
utility of the type of vehicle is taken into consideration. The high floor feature of the buses is
only compatible with boarding and disembarkation at the raised platforms of the respective
stations at the airport and Civic Centre. Passengers arriving at the City Centre stations then
have to interchange to another mode of transport to reach their Hotels or Guest Houses
The airport service would not have been implemented first had it not been for the World Cup
FIFA requirements. The high-floor technology does present a challenge when there is so little
trunk infrastructure in place.
The City is investigating off-peak fares similar to the current clipcard fare as a mechanism to
contain fare increases for price-sensitive users while also smoothing the peak demand.
215.
Conclusion
216.
217.
The generic lesson that can be drawn from the Latin American model is the manner in which
they have designed the BRT systems with due regard to land usage/development and
demographic patterns supported by the robust implementation of creative travel demand
strategies to reduce the overall number of vehicular trips, minimise travel time and optimise
travel cost. These are the sort of outcomes that ought to determine our planning initiatives
which would best be driven by an autonomous entity tasked in the main with overseeing
implementation through the respective modal operators.
Noted.
Our biggest fear is that we may discover that after having deployed massive capital outlays to
establish the system, it proves to be too expensive to operate in a sustainable manner. This
would regrettably stall the effective elevation of public transport and derail the noble vision of
putting public transport first.
The extensive modeling done indicates that the system is sustainable, as explained in the
Business Plan.
The municipal entity is, indeed, intended to be an autonomous entity tasked with overseeing the
provision of services by private operators.
218.
Detailed
P 6 Par 2: The contention that the services to be offered in terms of the IRT system will be
better and that the current services are uncomfortable and inconvenient is wholly
unsubstantiated. The current services offered ensures that 90% of passengers are seated
while utilizing the services and services are demand driven, thereby cannot be at inconvenient
times.
This comment was about public transport in Cape Town as a whole.
The vehicles to be utilized in the IRT system have a much reduced seating capacity which
means that more passengers will have to stand while utilizing the services and all services will
be demand driven.
The dedicated roadways will ensure that journey times are quicker on trunk routes.
220.
P6 Par 4: There is no basis to support the contention that rail services will be included in the
City’s Transport Plan. There is no evidence to support this contention.
This is the direction of national policy.
221.
P7 Par 2: Reference is made to “large numbers of passengers” but there is no indication of
what these large numbers are going to be or where they are going to be coming from.
The current rail services in Cape Town are evidence that there are routes where large numbers
of passengers embark at the same time. The City has studied public and transport usage and
has extensive date on transport use patterns, upon which the IRT modelling was based.
219.
‘Demand driven’ often means that there are no services in off-peak periods, which means that
the demand is not revealed.
Standing will be required at peak periods only over short distances.
MyCiTi will be catering to smaller numbers than is possible with rail.
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222.
P7 Par 4: It is well established the IRT system works best in high density areas where there
are short travelling distances, totally the opposite to the Cape Town scenario.
There are clearly potential trunk routes in Cape Town not covered by current rail services, which
reflect sufficient demand.
223.
P8 Par 2: The existing public transport services already covers this aspect, it is not something
new that can only be achieved through the implementation of an IRT system
The current service in the city is not integrated.
224.
P 11:
We challenge the statement that vehicle operations can be covered by fare revenues. In our
experience, fare revenue will not be sufficient to cover operating cost without the inclusion of
subsidies.
We challenge the point that the operational deficit will fall relative to turnover. There is no
guarantee that this will be realized once the system is rolled out. For exactly the same reasons
it is possible that the operational deficit will increase as the system is rolled out if the required
passenger base is not achieved.
We challenge the point that a level of subsidy similar to what is provided for existing bus
services, will be sufficient to render the proposed services. Current bus services receive
approximately R 55M on the Atlantis corridor. This Business Plan indicates that there will be
an estimated deficit of R 118M on the Atlantis corridor, which is double the existing subsidy
received. On what basis can the City claim that existing subsidy levels will be sufficient?
Statements such as these highlighted above are unsubstantiated, but convenient, based on
erroneous models which lead to Politicians approving systems without knowing the real facts,
e.g. It will only be possible to smooth the peak if there is compulsory flexi time implemented by
agreement between industry and government.
Subsidies will be required to run the full system if all ancillary costs are included, such as fare
system, station services, etc. However, modeling indicates that the cost of the vehicle
operations themselves can be covered by fare revenue in a metropolitan-wide service. This
modeling is to be reviewed. The city has not committed itself beyond Phase 1A.
The deficit could fall because of the network effect, offering more flexibility of routing etc. But
this depends on factors such as the extent of dispersed routes with peaked market that are
served.
The subsidy requirement similar to current services is for the whole metropolitan area.
The statements relating to Phase 1A are based on very extensive modeling by internationally
renowned experts, with ongoing local and international refinement. The metropolitan-wide
modeling is based on a less comprehensive process.
Smoothing of the peak could also be assisted by fare structure.
No mention is made of the methods they propose using to encourage people to utilize public
transport.
225.
P 12 Par 4: There is no easy access to the stations considering where they are situated and
what the passengers will have to do to reach these stations. In order to access the stations the
passengers are going to have to cross roads, which are usually very busy especially during
peak hour when the largest number of passengers are going to want to utilize the services.
It should be noted that in the conventional system (which runs at the kerbside) only those
passengers on the same side of the road as the bus stop they will use, have no need to cross a
road. Both directions of traffic must be crossed if the bus needs to be taken in the opposite
direction. The total amount of road crossing is the same for both systems; but the BRT station
creates an island in the median, which can make crossing easier.
226.
P 18: Articulated vehicles with ‘tag axles’ should be purchased as they can operate on normal
roads, which will save the city millions in construction cost.
The City is investigating all options. The rear axle loads of the 12 metre vehicles are higher than
the middle and rear axle loads of the 18 metre vehicles. The appropriate road pavement design
has been used to minimize the life cycle costs and to reduce long term maintenance
requirements on the dedicated bus lanes.
227.
P 19 Par 4.1.3: The existing fares should be listed together with the proposed fares for an
informed decision to be made. As it currently stands it appears that the new fares will be
approximately 33% more expensive
One of the outcomes of this review is to revisit the fare structure.
228.
P 31: The 2010 WC services did not test any of the listed services and the current service
between the City centre and the airport is not carrying passengers.
The MyCiTi system carried over 150 000 passengers during the World Cup period.
229.
P 32 Par 4.3.4: Statements such as “If the rider ship increases significantly, the system may
collect more funds than may be the case with the current higher fare” creates expectations
The model is based on limited mode shift from car to IRT. It may prove higher than modeled.
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without any substantiation.
230.
P 40: The vehicle types listed here are not the same as those operated during the 2010 WC.
The vehicles have less seating and more standing capacity making it impossible for the
proposed services to be more comfortable than the existing services.
Seating comfort is not the only level of service criteria that should be used in a qualitative level
of service metric. Given increasing transport demand it is accepted that the seating of all
passengers for all journeys will not be achieved.
Further, given the vehicle operating characteristics, amply grab hold opportunities and trip
length characteristics for standing passengers this is not deemed to be a significant issue which
will be off-set by other attributes of the total quality of the system.
231.
P 42: The Vehicle specifications differ from the vehicle description (see P 45).
If there are going to be low floor buses utilized as part of the service, they will not be able to
dock at the existing stations, which means that they will have to dock at separate stations (still
to be constructed) and separate stations will lead to greater discomfort for the passengers.
While it is acknowledged that there will be an increase in the generalised cost for users
transferring between services the marginal increase in generalised cost for transferring between
high platform and low platform levels will not be significant.
What legislative framework exists for the unilateral cancellation of permits and/or operating
licenses?
232.
P 48: What is the cost of the smart card going to be? Who is going to be responsible for the
cost of the smart card?
Indications are that the smart card may cost as little as R10, and that the cost could be reduced
by advertising on the card. The details regarding costing will be finalised as part of the awarding
of the fare system contract. One option is that the City pays the first card of citizens of Cape
Town (with proof of residence in Cape Town and ID number required), after which a deposit for
replacement cards will to be charged to all users.
233.
P 51: A conflict exists where there may be an increase in demand but the City does not
increase the number of vehicles to accommodate the demand. This will result in a situation
where the City has invested billions in infrastructure that may never be utilized to its full
potential and in the interests of the rate payers that are going to be footing a large portion of
the expenses incurred.
It is difficult to envisage increased demand without the City responding more positively than is
postulated here.
234.
P 65 – 70: No mention is made of the transport plan and legislative requirements, e.g. having
an approved transport plan that has to be advertised in the Government Gazette.
Such plan has already been approved.
235.
P 66: The law enforcement plans are essential to the success of the IRT system and should
be detailed for public comment.
The use of the dedicated IRT infrastructure will be continually monitored in the TMC by cameras
and a rapid response by law enforcement will be initiated.
The key to ensuring the success of the proposed system if effective and continued law
enforcement to ensure that there are no competitive operators operating along the designated
routes.
The proposed management structure is going to be exorbitantly expensive
236.
P 69 Par 2: This goes against the whole philosophy of promoting public transport. The entire
expensive infrastructure has been created which may not be used in terms of this paragraph.
237.
P 78: Considering the amount provided for compensation and scrapping and working on the
assumption that there are 900 minibus taxi’s operating in the area, does this mean that the
owners of the taxi’s will be paid R 419 000-00 per taxi?
238.
P 82: Clarity is required in respect of what figures the calculations were based:
Comment on BP and City response Dft4.12 101008.doc
The system will have to respond to cost pressures, just as any system should
The city is unable to give greater detail here because it would compromise tender processes.
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239.
How many passengers?
240.
What fares?
241.
How many bus passengers?
242.
How many taxi passengers?
243.
How many private vehicle users are going to convert to public transport?
244.
P 85 (see P 82): All costs are not specified in this document and it is unsure of what costs are
included in which cost areas, e.g. system costs or institutional costs. Where is capital costs
included?
City response
This table is entitled ‘operational and maintenance costs’ so does not include capital costs. The
city is unable to give greater detail here because it would compromise tender processes.
The real cost of this system is not properly reflected due to the fragmented presentation of the
system.
The R 25M proposed for the Operations Management Unit will not cover the costs of such a
unit.
What is the operations management unit?
What is the cost for law enforcement?
245.
P 87: It is very disconcerting that the City is proposing a new system that will be more costly
and no additional funding has been guaranteed to cover the costs to be incurred when the
system is implemented.
The financial risks associated with the initial phase have been modeled and are regarded as
manageable
246.
P 99 Par 10.3: The City will have to provide proof for the guarantee that the current operators
are not going to be worse off than they currently are.
The guarantee is from national government and relates to the minibus taxi sector
247.
P 100: The reference to the number of legitimate jobs refers-
248.
No calculations have ever been made in respect of:
The number of jobs created in the bus companies will be approximately 850. Of this 600 will be
drivers, and another 250 will be other staff. Approximately another 250 jobs will be created in
station services, and an additional 70 jobs for the fare system and control centre. The precise
number is still to be refined
249.
How many jobs are envisaged in the new system;
250.
How many jobs currently exist in the bus and taxi industry; and
251.
What skill levels are required?
The level of skills will vary across the job categories from bus drivers, station managers,
cleaners, security staff, etc. and people with specialist IT skills for the fare system and control
centre.
Additional specialist will be required within the IRT management unit and the eventual Municipal
Entity.
Based on feedback from the industry, the City has estimated the number of jobs currently in the
bus and taxi industry. However, the City has requested the industry to formally compile a
register of full-time employees.
252.
P 102: The figures in Table 24 are incorrect. Golden Arrow’s figures must include the subsidy
it currently receives which is not reflected in Table 24.
For the purposes of determining the share of the new industry, there are objections to GABS
being given a share based on the subsidy they are given
253.
P 103: Shareholding and other aspects that go hand in hand with shareholding reflected here
are matters which have only been discussed generally. No detail has been discussed and
Very substantial progress has been made with current operators towards reaching agreement
on a range of matters.
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nothing has been agreed to between the parties.
254.
P 105 Par 10.4: Provision should be made for a scrapping allowance for buses as well.
The main reason a scrapping allowance is provided for taxis is to allow the physical scrapping of
vehicles to ensure these vehicles are not used to illegally compete on the IRT routes or with
taxis on other routes. This same concern does not apply to buses and therefore no scrapping
allowance was provided for buses.
255.
P 107: Additional funding will be required for Customer relations, marketing and
Communication
Some further provision is made in the once-off cost provision.
256.
General
257.
Some detail is given in respect of the various contracts that will exist but no detail is given in
respect of the interconnectivity of the contracts, e.g. who will be responsible for defective
ticketing equipment resulting in a situation where the vehicle cannot be operated? This
supports the contention that the structure envisaged by the City is not practical.
Close attention is being paid to such issues
Flamingo Vlei
First joint letter
258.
Submitted by: M C Wroblewski, M Williams, M Prinsloo, R Steenkamp, A Keevers, D Hope, D
Beech, L A Heymans, U Otto, A Angelucci, A Russell, A Mammone, H Brand, M W Kohler, P
Betteridge, S Anthes, L Phipps, R Cooper, A O’Neill, R Kerr, M Steenkamp, K van der Spuy, S
Findlay-Hamilton, E Kotze, A Beneke, B Carroll, G Wrensch, A J Penberthy, G K Thorburn, A
Goodford, M Engelbrecht, J Dhont, B Smith, Mr & Mrs Heard, B Jordaan, S Ball, L Dupper, G
Hendriksz, S N Bonthuys, M H Bezuidenhout, I W Higgo, D Camais, D Buhler, J Vorster, T
D’Ambrosio, W J A Yorke/Miss M de Pinto
259.
Although the main IRT trunk routes, with their dedicated lanes, are fantastic for the City
and will bring great relief for passengers who would usually have to wait in normal
traffic, as a resident of Flamingovlei I would like to object to the proposed Feeder Bus route
as follows:
260.
All of the streets in Flamingovlei are within walking distance of the main trunk route in
Blaauwberg Road, passengers will not want to wait for a bus when they could walk to
Blaauwberg Road quicker and save the R5+ bus fare;
261.
Environmental impact on Rietvlei;
No negative impact is foreseen.
262.
Large unsightly feeder stations directly outside people’s houses, destroying views and
ruining the aesthetic beauty of the area;
Stops have been designed at an appropriate scale and aesthetic components have been
carefully considered. Preliminary location and placement of stops were done with full
cognisance of limiting impact on adjoining residences, specifically with regard to visual
Comment on BP and City response Dft4.12 101008.doc
They are within walking distance but this depends on what is considered convenient. The City
has identified a 500m walking distance from IRT stops and stations as a guideline to plan
coverage for the system. Approximately ± 25% of Flamingo Vlei falls within this catchment, so
the majority of potential commuters would need to walk in excess of 500m to access the trunk
stations. The furthest residents are ± 1,5km from a trunk station.
They would not save R5. The trunk along Blaauwberg road includes a base fare of R5. If a
customer takes a feeder to the trunk, he/she will not pay the base fare of the subsequent trunk
service.
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intrusions on to and from the stops into properties.
263.
Increased traffic in our quiet suburb, where children play and cycle in the streets;
Traffic flows along Pentz Drive are presently relatively low. They should be lowered further
when the IRT system is implemented as people elect to switch from private motoring to the new
public transport system. Feeder bus operations will be monitored vigorously via the control
centre to ensure safe operations through the neighbourhood.
264.
Increase in crime rate because potential burglars have an excuse to be watching
properties, while they are supposedly “waiting” at feeder stations (according to SAPF this
is a known fact);
This is a management issue, which could be addressed with the help of the neighbourhood
security services. The system could, if anything, improve security in the area as it will introduce
surveillance by vetted operators, who would be able to spot potentially suspect behaviours/
events.
265.
Increased litter and undesirable behaviour around the feeder stations;
The operational management of the system would include preventing any littering.
266.
Properties devaluing, especially the ones close to the feeder stations;
This is a concern which could be supported if the stops were much larger in scale, and attracted
people from outside the area. The feeder service would be local, by its nature largely restricted
to people who live and work (e.g. domestic servants) within the area. If it were the case, there
should be a link between existing bus stops in suburban areas, and devalued prices of adjoining
properties, which is not believed to be the case.
267.
Increased traffic congestion at the intersections of Study and Blaauwberg and Pentz and
Blaauwberg;
The IRT system will lead to a reduction in traffic as people switch modes. The signalised
intersections along Blaauwberg Road have been carefully analysed to ensure reasonable traffic
operations.
268.
The route is not sustainable and is a waste of the ratepayer’s funds
The flexibility that a private car based transport system affords the residents is not sustainable
in the long term. It is the City’s prerogative to introduce changes to the mix of transport modes
in the city, for reasons related to sustainability, efficiency, accessibility, affordability, and equity.
It would be irresponsible for the City to plan its transport system as if non-renewable resources
were to be available ad infinitum.
Second joint letter
269.
Submitted by: HJG & E A Vivier, A Downing, D Smithie, T Webb, Tanya Robinson, U Scheps,
B Peacock-Edwards, N Gradwell, M Passet, M Prins, K Troupe, D Peters, F Ekermans, J
Buttress, M Kelly.
Similar comments to those above, plus the following:
270.
Increased interference by vagrants on elderly people who walk down and up Study Street
either for health reasons or to do their shopping at Flamingo Square. It is bad enough now
with them sitting on the corners of South Road and Study Street just before Flamingo
Shopping Centre begging for money. What easy targets we elderly people and children will be
with the increase of vagrancy and traffic in our quiet suburb. So please give the proposed
feeder bus route for Flamingovlei very, very serious thought.
Comment on BP and City response Dft4.12 101008.doc
The “increase of vagrancy and traffic in our quiet suburb” is argued to be based on
misconceptions, as outlined in other responses above.
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Third joint letter
271.
Submitted by: M de Jong, K Sadler-Almeida, L Korte, T Kahn, D Havenga, H Craemer, S M
Jansen, P Viljoen, M Medina, C Schoeman, Tashreeq, E Rossouw, J Diedericks, S Koch.
Similar comments to those above, plus the following:
272.
I am not sure whether you are aware but there has been at least two separate occasions in
Pentz Drive where very large sinkholes (big enough to swallow a motor car) have developed
due to the landslip phenomena as Pentz Drive runs across the land slope, especially in the
Study Street area and Jansens Road areas. Roughly at both these intersections the landslip
has been major and this for a road carrying ordinary motor vehicles. If you run the IRT buses
along Pentz Drive, the situation with the soil under Pentz Drive will no doubt be exacerbated
as buses are a lot heavier which will lead to repeated costs to the local authority in repair
work. What will I do, or any other resident on Pentz Drive if a sinkhole develops under my car
when I am driving?
A road pavement investigation at these sites is required to confirm pavement layers are intact
and sufficient resilience to carry these feeder buses. These feeder buses will be specified not to
exceed the legal axle load for such buses.
273.
Pentz Drive has a reputation for the killing of household pets, and before I moved here in 1994
I believe two children were killed on this road. Recently an adolescent schoolboy was killed on
Pentz Drive in the section as it approaches Table View Mall, right on the right hand slight bend
in the road. Do we really need buses to add to the traffic problem.
None of the above incidents appear to involve public transport vehicles. Bus volumes (and
passengers) are inversely associated with general traffic levels. Trained drivers are less likely
cause accidents than ordinary people driving recklessly.
274.
It is probable that a high percentage of persons living on Pentz Drive own motor cars. To
obtain one of the buses, it is reasonable to assume therefore that they could easily drive to a
point close to Blaauwberg Road in order to catch the bus. Many working people already drive
to the Table View Mall (Pick n’ Pay) and park there all day while they use public transport.
It is agreed that many people will elect to drive to a location close to the trunk station, to “park
and ride”. However, there are a limited number of parking bays available. Moreover, it is the
City’s resolve to extend public transport services to as wide as possible a market, to minimise
reliance on private transport, consistent with establishing a sustainable long term transport
system. In addition to providing for commuters, the City endeavours to provide for all users,
including scholars, domestic workers and others.
275.
Flamingovlei and Pentz Drive constitute one of the highest price areas in Tableview and an
IRT bus route would destroy this.
The IRT feeder route in this area will not destroy the character of this area, for reasons outlined
above.
276.
No public meeting has been held with affected residents. Why is this so? Does not the law
make provision for this, I think it does.
Planning for the project has been comprehensive, and entails, infrastructure, operational and
business plan components.
Each construction contract or project area, where required, was the subject of an Environmental
Impact Assessment in terms of NEMA (Act 107 of 1998). This environmental application
included the placement of notices in the local daily newspapers, written notice served on the key
stakeholders in the area, the adjacent property owners, the ward councillors, the registered
interested and affected parties and the relevant organs of state.
The improvements proposed for the feeder routes do not trigger an environmental application
process or any other formal requirements for public participation. With the exception of the
placement of the feeder stops within the road reserve areas, no further road widening (which
would have triggered such a process) is proposed.
Various public meetings were held with affected residents. [KH* - How many?] *The City is
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happy to convene further meetings where residents so desire.
277.
I have other major concerns about this IRT proposal in Pentz Drive. I cannot assume that a
DA city council will remain in power ad infinitum. I would be even more concerned if another
party, perhaps not as capable of managing things like the DA were to assume control of the
Cape Town City Council.
A note on Pentz Drive :
Pentz Dive is a class-four local distributor road, which is a residential through-road which
distributes traffic within communities, and links lower order roads (e.g. Class 5 access
collectors) with higher order ones (e.g. Class 3 district distributors).
Pentz Drive has a 25m reserve, and may have been planned to accommodate a dual
carriageway when it was planned in the 1960/70’s, but is highly unlikely to be upgraded for a
number of reasons. From a traffic perspective, the road carries two-way traffic of ± 700
vehicles/hr (am peak) to ± 1 200 veh/h (pm peak). The capacity of the road is in the order of 1
600 veh/h (i.e. 800 veh/h per direction), a level which is not likely to be reached. Traffic levels
on Pentz Drive further into Flamingo Vlei are much lower.
A class-four road is planned for, and designed to accommodate bus services. The City is not
likely to enact a by-law which would restrict public transport services along a route which falls
within a designated public transport route category.
Pentz Drive (and its extension into Fairbridge Road) represents the best and most logical feeder
route from an operational perspective, as it is the only route which fulfills the collector/ distributor
function, with route continuity and optimum coverage of the surrounding residential area.
Fourth joint letter
278.
Submitted by: Danny Belcher, Cynthia Dancer, Anita Shrock, Andrew Belcher, John Belcher,
N Eppenberger
279.
Although I feel that the main IRT trunk routes with their dedicated lanes are good
investment and will great way of reducing normal rush hour traffic and bring a relieve to
people who have to use public transport, I object to the proposed Feeder Bus routes for the
following reasons:
280.
1) First and the most important, all streets in Flamingo Vlei are within short walking distance
from the main route in Blouberg Road.
The city has adopted a standard of 500m a walk to the nearest public transport facility.
Removing the feeder from Flamingo Vlei, will result in passengers falling outside this area and
not being served adequately.
281.
2) It will increase traffic congestion at the intersections of Study and Blaauwberg as well as in
Pentz and Blaauwberg Roads.
The core purpose of this project is to reduce private vehicles by attracting them into public
transport. This will assist in relieving the pressure on intersections.
282.
3) Feeder Stations directly outside people’s houses will have a huge impact on destroying
views as well as ruining the great aesthetic beauty and tranquillity of the area.
See items 262 and 321.
283.
4) It will have a huge negative environmental impact on Rietvlei.
No negative impact is foreseen.
284.
5) The increase of traffic in our quiet suburb where children play, people cycle and people go
for walks as a way to keep fit and healthy, will be put in danger.
Not true. See response above.
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285.
6) Property in the area will devalue especially the ones close to feeder stations.
See response above.
286.
7) One will see an increase in drug trafficking; undesirable behavior and littering.
See response above.
287.
8) A increase in crime rate as potential burglars will have the excuse of watching properties,
while supposedly waiting at feeder stations.
See response above.
288.
9) The routes will not be sustainable as people will rather walk to Blaauwberg Road than pay
+/- R5.00 to Blaauwberg Road.
Not true because if passengers transfer to the subsequent trunk, he or she will not pay the base
fare of that trunk again. Therefore it more beneficial to access the trunk via the feeder service.
See response to point 260 above.
289.
10) Flamingo Vlei will lose the tranquillity that all the years made it a area loved by all that live
in suburb. I live next to the primary school, there are lots of children around and cars of
parents dropping them off or picking them up. There is also a crèche with lots of children
coming and going all day.
The feeder service will support and further enable this environment.
Pepe Gordon
290.
I support the IRT System in principle, however, as a Flamingovlei resident, I strongly object to
the proposed feeder route through this suburb, which will create more negative aspects than
any possible benefits, and as such is not wanted by the area residents.
291.
The main reasons for my objection are as listed below :-
292.
The increased traffic along Pentz Drive will have a negative effect on the peaceful nature of
this quiet, upmarket suburb, and possibly on the
293.
tranquillity of the reserve area itself.(noise, exhaust and litter pollution )
294.
The Feeder Buses themselves will represent a potential danger to pedestrians, especially
children and cyclists. Most people bought homes in this expensive suburb because of the
relative peace and security of the area.
295.
Feeder Station boarding points will certainly have a negative effect on the lifestyles, security
and value of the homes in the vicinity due to potential litter, sanitation and noise problems. It is
a proven fact that properties along bus routes and near bus stops are less valuable.
296.
Crime in our area could very easily increase because of the extra access and exit potential
provided by the buses. The bus stops will provide an excuse for potential house breakers to
be in the area.
297.
TRAFFIC CONGESTION: Currently (and also prior to the commencement of work on the new
transport system) there is very bad traffic congestion at the intersection of Blouberg Rd with
Comment on BP and City response Dft4.12 101008.doc
Concerns raised above have largely been addressed in response to other comments raised
above. It is believed they reflect a particular perception of the proposed system and its impacts
which is misinformed. International planning practice grounded in “new urbanism” and “transit
oriented design”, for example, are generally considered to not only improve mobility options for
residents but, within an overall management framework, often lead to quality of life
enhancements, which ultimately translate in increased property values.
(Ditto from above): The IRT system will lead to a reduction in traffic as people switch modes.
The signalised intersections along Blaauwberg Road have been carefully analysed to ensure
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298.
Comments
City response
Pentz and Raats in the mornings and evenings. Once the articulated buses start to come up
Blouberg Rd and turn through 360 degrees to come back again, then the traffic congestion at
this intersection will be horrendous. If the Feeder Buses are then also coming in to this mix,
down Pentz Drive, the situation would be crazy. The potential increased traffic blockage at this
point could very easily block exit from the police station which is also a bad situation.
reasonable traffic operations.
Finally, most homes in Flamingovlei are just as near to Blouberg Rd as they are to Pentz Drive
which makes the proposed Feeder Route an unnecessary and expensive option.
Refer to comment in item 260.
Alastair Drury
299.
My family and I have lived in Flamingo Vlei for over ten years and therefore we have a good
knowledge of this particular area of Table View and wish to raise objection against the building
and installation of a proposed 'feeder bus route' through this area.
All concerns addressed above. See item 260 onwards.
300.
The amount of people that this would 'benefit' as opposed to those whose homes will be
affected is minimal. I myself walk to Blaauwberg Road and all the other roads in our area are
close to this road as well. To have feeder buses running along any of the roads in Flamingo
Vlei defeats the object of living in a quiet and well controlled suburb.
See discussion above, which covers these issues.
301.
Noise levels would rise dramatically as people stand around waiting for the feeder bus, the
taxi's themselves will be hooting as they do, to attract 'potential' clients, traffic will increase in
our quiet neighbourhood and crime of course will increase as more people have unnecessary
access to this area and easy ways with which to move out should they commit a crime. One
only has to look at the other bus stops already in place to see how they become abused and
misused and we do not want this in our area.
302.
I most certainly would object to having a bus stop in front of my house, I bought my house
away from a main road on purpose and the property would greatly decrease should I have to
have one now - would you reduce my rates because of this I wonder?
303.
There are plenty of taxi's that people catch in Blaauwberg Road already and to increase these
or allow these to use the arterial roads in Flamingo Vlei is a grave mistake.
304.
I wonder how many of you would enjoy looking out of your front garden onto a bus stop and
have the passengers standing around watching you....
305.
This is a complete waste and mis-use of my rates and taxes and I sincerely hope that you will
not continue with this plan of action, yes I agree that the Rapid Transport is a good idea and
my family intend to use it but please don't ruin my area because you, the powers that be, who
don't live in this area, think it will be a benefit to a minority of people.
Note that the new feeders will not be taxis and will not be hooting. The vehicles are high-quality
with relatively quiet.
M Roestorf (SANCCOB)
306.
SANCCOB hereby lodges our formal Letter of Objection to the suggested Feeder bus route in
Comment on BP and City response Dft4.12 101008.doc
No negative environmental impacts are foreseen. IRT buses are Euro IV compliant regarding
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Flamingo Vlei.
307.
SANCCOB endorses the reasons which The Flamingo Vlei Forum gives for the route not to go
ahead i.e. increased strain on the adjacent sensitive wetlands area, opportunity for criminals to
loiter and for opportunistic burglaries, litter, noise and air pollution.
308.
Alongside these we would like to add our own reasons why we think the busses should not be
fed along this route.
City response
exhaust emissions and should reduce the traffic in Pentz Drive and in the Table View area by
offering an alternative means of transport to the private car. Introduction of the proposed feeder
route in Pentz Drive cannot negatively impact on the Rietvlei environment.
309.
Blouberg Conservation Area
310.
Reading through the BCA’s (Blouberg Conservation Area) website should be an eye‐opener to
any City department wishing to jeopardize Rietvlei’s natural heritage status. The suggested
bus feeder route flies in face of the conservation plans for the area which the BCA has at its
core.
311.
Rietvlei is one of the few land‐locked wetlands in Cape Town and needs to be conserved at all
costs. Small rodents, tortoises, guinea fowl and other wetland creatures do cross the road,
and with increased traffic are certain to become casualties.
312.
SANCCOB works closely with the Blouberg Conservation Area and would like to register
alarm that while the BCA is pulling out all the stops to save the environment, the City is
suggesting something which runs contra to the spirit of this.
313.
National mandate.
314.
SANCCOB is mandated by government to rehabilitate seabirds in the case of disasters
involving seabirds. In order to maintain the readiness required we need to be able to mobilize
quickly and to expand the centre to accommodate such a disaster.
315.
As an active member of the Cape Town disaster management team, SANCCOB is expected
to maintain a constant state of readiness in event on oiling at sea.
316.
Conclusion
317.
SANCCOB has a healthy, symbiotic relationship with the City. In the spirit of this relationship,
we would urge the City to reconsider these plans, and not to increase potentially destructive
activity close to this sensitive conservation area.
Angus Brits
318.
Although the main IRT trunk routes, with their dedicated lanes, are fantastic for the City and
will bring great relief for passengers who would usually have to wait in normal traffic, as a
resident and property owner of Flamingo Vlei, object to the proposed Flamingo Vlei Feeder
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Bus route on the following grounds:
- All of the streets within the Flamingo Vlei feeder route are within walking distance of the main
trunk route in Blaauwberg Rd. The feeder route also does not cover the area of Flamingo Vlei
from Study Street eastwards to the river where there is denser housing and possibly more
need for such a route. The feeder route therefore holds no practical merit for the Table View
primary school. It also serves no purpose for the Table View High School as pupils travelling
to and from the school would have quicker access via the main route on Blaauwberg Rd. The
same would apply to the retirement village in Grey Street. No other concentrations of people
(flats, colleges, industry etc) exist along this route that could justify it, only single residential
family homes.
Re. walking to Blaauwberg Rd: See discussion at item 260.
320.
- Environmental impact on the Rietvlei Wetland Reserve, a PNE (Protected Natural
Environment) as well as SANCCOB. Has any EIA been carried out in this regard?
Note on EIA process earlier in item 276.
321.
- Unsightly feeder stations directly outside people’s houses, destroying views and ruining the
aesthetic beauty of the area. No pavements exist to get to and from the feeder stations/stops,
the result being that cared for grass verges etc will eventually look like dusty footpaths.
Another result thereof would also be potential passengers walking in the road and exposing
themselves to danger.
Careful attention will be paid to the establishment of platforms and their insertion within existing
grass verges. The current approach is to provide a sidewalk between the stop and the nearest
intersection. This may need to be revisited to lessen impact on existing verges. The streets are
further to be used by pedestrians, as they are at present, as multi-use environments for both
vehicles and pedestrians.
322.
- Increased traffic and resultant vehicular noise in a currently quiet suburb. This increase in
traffic also poses a danger where children are currently able to play and cycle safely in the
streets. The proposed feeder route is along the same route that a major amount of pupils from
the aforementioned 2 schools cycle and walk daily. Once again, no pavements, no pedestrian
crossings, increased traffic and increased risk to such pupils. The noise level resulting from
the feeder busses will be further exacerbated by the speed bumps currently along the route in
Pentz Drive. This is even more worrying considering the very early and late operating times
proposed, a time when families are still asleep.
The principle is that people move out of their cars, and into buses. By definition, this will lead to
a reduction in general vehicle demand and hence movement through the area : there will not be
increased traffic and resultant vehicular demand. The potential noise impact of buses has been
and will be taken into account in determining the bus specifications.
323.
- The potential increase in the crime rate because burglars/criminals would have an excuse to
be watching properties, while they are supposedly ‘waiting’ at feeder stations (according to
SAPF this is a known fact).This would also afford burglars/criminals an easy and regular
entry/escape route. The danger from such elements also extends to pupils (primary and high
school) who walk and cycle this self same route daily.
Already responded to above.
324.
- Increased litter, undesirable behaviour and concomitant noise around the feeder stations
from very early in the morning until late at night, directly outside residential dwellings.
Will be addressed through a station services contract, which will ensure that feeder stops are
regularly cleaned and maintained. The station services contractor will also be responsible for
ensuring that any repairs required are undertaken.
325.
- Properties devaluing, especially the ones close to the feeder stations
See response above. It is well documented that access to a high-quality public transport
system has positive impact on property values.
326.
- Increased traffic congestion at the already congested intersections of Study and Blaauwberg
and Pentz and Blaauwberg.
Already responded to above.
327.
-The route is not sustainable, a waste of ratepayer’s funds and clearly against the wishes of
affected residents. As such I am sure the funds could be better utilised in areas of the greater
Already responded to above. This route is an essential link to the network of routes planned for
the Table View area. The success of the trunks is based on the efficiency of the serving feeders.
319.
Comment on BP and City response Dft4.12 101008.doc
Correct. In our subsequent review, we have now proposed some route amendments that now
(in addition) include the area to the east of Study Street.
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Blaauwberg where there is higher population density and need. (Parklands etc)
328.
-Has a survey/needs analysis or any type of Public Participation Process been carried out
among the affected residents/ratepayers to determine the need and/or desirability of the
proposed feeder route? As a resident of Flamingo Vlei for 13 years it is my observation that a
great many of the residents in the feeder route area are either self-employed, business owners
or senior management, not 9-5 workers who would be in need of such a service.
Already responded to above.
329.
-Lastly- why should we run the risk of having the value of our properties de-valued when we
have invested heavily in this specific area for the values and attributes the area offers, such as
safety, tranquillity, community and beauty? The high property rates currently paid by residents
of Flamingo Vlei should surely afford us a say in the matter.
Already responded to above.
Enid Vickers
330.
I am a Flamingo Vlei resident who has lived in the area for many years. For some time I have
been listening to all the debates raging about the proposed feeder bus route for my area and
have given a lot of thought to this.
331.
I believe that the City is to be applauded for addressing the issue of public transport, which is
very necessary. I personally won’t be able to make use of it because the nature of my job
necessitates that I travel throughout the Peninsula for business. However, there are a great
many people living along the west coast for whom the BRT will be a life saver.
Noted
332.
However, my chief concern is the purpose and the route of the proposed feeder bus route. I
know there are many objections which are in themselves objectionable, and I don’t want to
approach you in that spirit. My biggest concern is for the Vlei. I was one of the original
environmental activists who spearheaded a campaign to save the Vlei from Equikor property
developers. It was a long, hard fight but well worth it.
The IRT is designed also to attract users who have a choice regarding public and public
transport, in addition to present public transport users.
333.
So you will hopefully understand that I am uncomfortable that a bus route has been planned to
specifically run through a basically uncongested and environmentally sensitive part of
Flamingo Vlei. Most people living here are wealthy and are never likely to be tempted to use
public transport, no matter how attractively it is packaged. Most importantly, no environmental
impact assessment has been done on the effect of increased traffic on the Vlei which is
already under threat from pollution from the urban edge [mercifully halted now]. It wasn’t long
ago when many fish in the vlei were poisoned by pollutants leaking into the water through the
river. Not only has an environmental study not been undertaken, but no feasibility study has
been conducted either as to the benefit residents will receive from it vs the detrimental effect it
could have. And it appears at this point that it will be more detrimental then beneficial.
334.
For the above reasons, my husband and I have decided to lodge an objection against the bus
route.
An important principle of this project is the preservation of the environment. The core purpose of
the project is to reduce the reliance on the private car. The environmental impact of
unrestrained private vehicle use far exceeds what is projected from a high quality public
transport system.
Julia Schmidt
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335.
First of all, my husband and I are pro the IRT system. Our city needs a safe, reliable transport
system for everyone to use. However, my concern is where these feeder routes are
established and the impact it will have.
336.
Yes, we live on Pentz Drive. My family and I moved here three years ago from the city centre.
It is a beautiful area and we really enjoy living here.
337.
Yes, I do the daily grind of leaving home at 06:00 a.m. in the morning in order to get to work at
a reasonable time. Luckily for me, I work flexi-time and leave work at 3.45 p.m. in order to beat
the traffic home. I don’t do traffic. It is a waste of precious time and energy.
338.
So I know for a fact that at 06:00 a.m. in the morning, that the traffic flow on Pentz Drive is
minimal. There may be another two or three other commuters that I drive with or past in the
mornings.
339.
Our reasons for objecting:
340.
The environmental impact on the vlei: apart from pollution, there are huge varieties of birds
that we are privileged to come into contact with daily. I have frogs in my garden. This wetland
area can only be put at further risk with additional traffic flows.
See response above.
341.
Schools: there are a large number of families with young children living in the area. The area
also has two main schools as well as a host of day cares, nursery schools etc. Older schoolgoing children travel to school and home again on their own steam (walk or bicycles). They
use the bicycle lanes. Moms and nannies walk the children in their prams as well as dog
owners walking their dogs.
The feeder service has been designed to adequately serve scholars.
342.
Traffic volumes on Pentz Drive and Study Street: I talk about these two roads specifically as
they are the ones I use the most. I am sure that other roads linking to Pentz Road experience
the same issues.
See response above.
343.
Even though Pentz Drive has road calming measures (speed bumps), people still speed
between speed bumps and jump stop streets. This puts residents and animals at risk. I have
already lost a pet this year because of people speeding. When will it be a child or an adult ?
More traffic is only going to more increase this risk. As for Study Street, it is a busy road which
needs calming measures to be taken, not additional traffic.
See response above. The core purpose of the feeder route is to improve traffic operations
through the reducing the reliance on the private car.
344.
Impact on actual road: Both Pentz Drive and Study Street suffer in winter. There are always
potholes which need to be filled only to reappear after the rains. More traffic will only increase
the wear and tear of our residential streets. In fact, in the last year and a half there have been
two different major road repairs between my house and Study Street because of massive
holes that suddenly appeared in the roads.
Road pavement investigation is part of the design process and will be completed before
implementation.
345.
Another concern is that it was mentioned that Pentz Drive was built with very wide verges for
potential “dual medium traffic”. Most roads in the Flamingovlei area and parts of old Tableview
were built with wide verges. Besides that, Flamingovlei of 30 years ago is different to today. It
is a fully fledged established suburb. If nothing has happened in 30 years, surely you can’t
change it now especially in terms of how the area has grown.
Feeder service design, fleet type and station locations will be planned and implemented in a
way that is sensitive to the residential environment.
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346.
This has happened in other suburbs as well e.g. Monte Vista, Visagie Street was originally
meant to be a bus route as well. However, as the suburb has grown, this idea was never taken
further.
The proposed feeder service is designed as part of a system in the Table view area. The Monte
Vista area could have other requirements, like pedestrian improvements to the rail station.
Please note, the same principle used here will be applied in the rest of the metro in future.
347.
Safety of residents: More traffic in the area means more people which means easier access to
an area that a person may not normally frequent. It is clear that the police have more than
enough on their hands so to change the character of an area that was not normally a “high”
impact crime area will only increase the police’s workload.
The idea that public transport is a safety risk in residential areas, and that criminals use it as a
get-away vehicle, is unrealistic.
348.
The proposed feeder route: I understand that the proposed feeder route runs from Blouberg
Sands, through Parklands, Tableview, across into Flamingovlei and to Bayside. If this feeder
system HAS to take place, do an analysis on the areas on the proposed feeder route and what
their individual needs are. Then place the feeder routes where they are needed most.
A detailed investigation and design process was followed.
349.
I do not believe that Flamingovlei needs a feeder route from 4.30 a.m. to 24.00 every day of
the week 365 days a year. The same may apply to Blouberg Sands. However, Parklands and
Tableview may need to have such a well defined feeder service which runs efficiently and
quickly.
The actual operations will be constantly under review. The times and service frequency will be
amended to adequately respond to the revealed demand.
350.
Bloubergsands can potentially have its own feeder route to accommodate residents in that
area
In addition to feeding the trunk route, the purpose of the feeder system is to provide a
distribution service within the Table View area, attempting to respond to all travel requirements.
351.
Parklands, which probably has a higher volume of commuters travelling to town may need
feeder services to accommodate its specific needs. These will probably be higher than that of
Bloubergsands
The City is committed to providing for an all-purpose public transport system - not just to
commuters.
352.
Tableview may have similar needs to Parklands which means it could have a feeder service to
accommodate its needs
353.
Designate a central IRT parking area for commuters outside of these feeder routes that they
can travel to, be dropped off or park their cars in a safe environment for the day e.g. who does
the Waterpark at the Tableview Library/sportsgrounds/gym belong to? I don’t see a high
volume of traffic there. Could this not be an option for an IRT parking area ?
The City’s review review has concluded that Parklands and Bloubergsands areas are
adequately covered.
Park and ride initiatives are great interim solutions but cannot be permanent solutions because
they work against the city’s attempt to reduce private car travel. The purpose of the feeder
system is to allow residents to access the system by walking not more than 500m from their
doorsteps.
Lorraine Broughton
354.
Having been a resident in Flamingo Vlei for the last 30 years-having seen it been built up I am
deeply disturbed by the lack of sensitivity in the consideration of a bus route through the area.
355.
Has there actually been a study to see who will use this facility in Flamingo Vlei.
Yes. The, traditional transport-demand model, supported by transport data, was used to
motivate this proposed feeder route. In addition extensive on-site investigation and surveys
preceded these proposals.
356.
The area is a dead zone during the day as most people are at work & the rest are retired folk.(
this is a fact) Having a bus go thro will enable more non residents to have an excuse to be in
the area-hence more crime
See response above.
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357.
Also it is an environment issue. Have seen guinea fowl & even the odd mongoose wandering
about-Cannot see bus drivers been considerate of these birds & animals. Flamingo Vlei
borders a bird sanctuary & is quite a unique & peaceful suburb.
See response above.
358.
With busses come bus stops & more filth at these areas.
Bus driver behaviour will be continually monitored.
359.
What about all the speed bumps down Pentz Drive, Study Street has none ,as it is the lack
thererof in our road enables motorists to come screaming down at a hectic pace making it
difficult for residents to come out of their driveway. Have the powers that be noticed that Study
Street has quite a long blind curve which causes this problem so heaven help us if the busses
start driving down there.
In addition to bus operations, the City will also employ a company to manage the necessary
station services which will include cleansing functions, specifically at and around these stops.
360.
One can’t help wondering if there is a hidden agenda -to appease the taxi drivers as their
route has been restricted down Blaauwberg Rd or someone with connections to now run a bus
service
Since all buses will be monitored, any bus that exceeds the stipulated and safe speed can be
identified and the driver will be dealt with accordingly.
361.
It takes a few minutes to walk up to the Blaauwberg Rd. The suburb is one of the more affluent
in Table View & most people have their own transport.
362.
What I cannot understand is why if there must be a feeder bus does it not go past Schools &
the old age homes. These are the people who would most likely use it.
See response above.
363.
There is exactly one 2 storey block of flats in Flamingo Vlei which is off the so called feeder
bus route & for those residents it will be quicker to walk to Blaauwberg Road.
The current route has been revised and the new route covers the necessary nodes accordingly.
364.
Mainly women use the bus into work from approx 6 to 9am in the morning which I did myself in
the past but after that a mere handful will go into town later in the day so it is quite bizarre that
the residents from Flaming Vlei must be subjected to busses coming through every 10 min. I
feel this is again returning to my hidden agenda theory. If busses come down Study Street
what is to stop the taxis doing the same .This bus as far I know has to travel thro’ Parklands &
the route through our area has been devised so that the bus not have to travel down
Blaauwberg Rd definitely not to pick up the local residents.
See response above.
Blaauwberg Rd is served by a trunk service. Operationally, it is inefficient to operate trunks and
feeders on the same route. The feeder route via Pentz drive increase system covering and links
to the trunks accordingly.
365.
In conclusion there is no way it can be financially viable for this route through Flamingo Vlei so
there is no reason that it should other than the fact stated in Pnt 6 & last portion of Pnt 10
Bus operations on this route will be optimised to ensure financial viability with respect to hours
of operation and frequency of services.
366.
Comment on the IRT in Milnerton: The single lane on the R27 through part of Milnerton will
obviously create a bottleneck. A narrow portion of the adjoining private properties should have
been expropriated to facilitate the construction of two bus lanes all the way.
367.
My suggestion is to start the expropriation process now, because it will have to be done at
some stage. Property prices won’t drop and the process will always be complicated. Better
start soon.
The two short sections on the R27 where there was insufficient road reserve width to
accommodate the two-way cycle lane, four general traffic lanes and two dedicated bus lanes
resulted in the decision to have the dedicated bus lane southbound only. At Boundary Road and
at Loxton Road the IRT buses will be released into the general traffic lane during a dedicated
bus phase in the traffic signal plan. General traffic will be held back at pre-signals so the buses
will not be delayed by traffic congestion.
368.
I object to the feeder bus route for Flamingovlei
369.
As far as I understand it the IRT is intended for mass public transport. North of Blaauwberg
Road is the fastest growing area with the largest population in the area. The residents of
Comment on BP and City response Dft4.12 101008.doc
See response above.
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Parklands and Sunningdale will definitely benefit from the IRT and feeder systems and I
believe they will welcome it.
370.
Flamingo Vlei is a small and long established community which is situated South of
Blaauwberg Road.
371.
The City has thrust this bus route upon the residents of Flamingo Vlei without any
consultation. It seems that someone looked at a map and decided that this would be a good
idea.
372.
After more than a year of requesting discussions with the City, we now find ourselves with only
a 2 week opportunity to comment, and from a distance.
373.
I know that the objections you have received will have covered many issues. A few worth
mentioning would be:
374.
- Residents have easy access to Blaauwberg road on foot.
375.
- Crime is a problem in South Africa and bus stops are a haven for vandalism and other
anti social behaviour.
376.
- Increased danger to pedestrians, school children and family pets.
377.
- Resulting in property devaluation in the area.
378.
These are all valid objections and deserve the utmost consideration.
379.
The issues that I would like to emphasise are the following:
See response above.
380.
- Our suburb borders the Rietvlei (a protected area) and Pentz Drive itself was once under
water. The Rietvlei has been under extreme pressure for many years due to residential
encroachment (Milnerton Ridge and Sunset Beach), solid waste effluent and other
pollutants.
381.
Heavy traffic volume and bright lights along the R27 have already encouraged the wildlife to
migrate to the eastern side of the vlei, which borders Pentz Drive. As local commuters we are
familiar with wild life crossing Pentz Drive and we slow down and stop. Buses will not have the
same awareness.
See response above.
382.
We, as residents here are obliged to protect the wildlife as they have nowhere else to go.
See response above.
383.
If you should take a drive along Pentz Drive presently, during the day you would not find
much traffic at all. Adding a bus service here would increase carbon emissions and further
impact upon the Vlei.
384.
Litter, which is a fact of life around bus stops, such as plastic bags, empty soft drink cans
and bottle tops will find their way into the Vlei, threatening the lives of the creatures that
live there.
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385.
We have not been informed of any EIA associated with the feeder route along Pentz
Drive.
386.
The increased volume of buses during rush hour will cause chaos at the intersections of
Blaauwberg and Pentz and Blaauwberg and Study. I anticipate that commuters will
choose an alternate route along Janssens Avenue to Blaauwberg, which will back up and
block the access into Table View High School.
Full traffic analysis (as part of the detail design process) was completed and the intersection
design has been revised accordingly. This project will attempt to attract private users to public
transport and therefore reduce number of vehicles which will relieve traffic at this intersection.
387.
Finally, compared with 230 “No” votes received by the Flamingo Vlei Forum so far, there
have only been 12 residents who say that they would use the feeder bus. In my opinion,
this route would be completely underutilized and a waste of ratepayers’ resources, which
should be utilised in a more densely populated area.
See response above.
388.
Therefore I have to object to the Feeder Route though Flamingo Vlei.
Tyrone Richard Braga
389.
I accept that the main IRT system is a wonderful project and I am positive that it will alleviate
most of our congestion problems that our cities face.
390.
There is no denying that there is a great need for those that cannot access the city other than
by public transport and this will be a great benefit to them, but I do not agree with the feeder
routes proposed for our area (Flamingovlei) being of benefit but instead a waste of taxpayer’s
money.
See response above.
391.
Whereas to the north of Table View where we find all the growth happening, this system will
definitely be beneficial to the community particularly off Wood Drive and Gie Roads.
Flamingovlei being itself very small overall does not warrant feeder routes as most of the
children attending the two Government schools now come from the north,
(Sunningdale/Sunridge/West Riding and Parklands etc) not to mention all of our private
schools are located to the north of Table View as well.
See response above.
392.
Anyone needing to access the small shopping centres in Flamingovlei can easily do so from
Blaauwberg Road as these facilities are a stones throw away from the main trunk route.
Students from the high school can also be dropped off at the corner of Blaauwberg and
Janssen Roads and Boy de Goede Circle for the junior school and walk two blocks which is all
it will require to get to school.
See response above.
393.
Anyone with an insight and knowledge of Flamingovlei will know this. I do not wish to be rude
but do any of the decision makes even live in Flamingo Vlei? To my knowledge, most of our
Councillors do not, except for Alderman Neilson.
394.
I do not want to continue to bore you with the issues of security/property
values/vagrancy/littering and increased traffic as I am sure many other residents will do this,
but only with facts and hope that all planners will do a more in-depth study before a final
decision is made on Flamingovlei.
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Mr R Chesters
395.
Although the main IRT trunk routes with their dedicated lanes are fantastic for the City and will
bring great relief for passengers who would usually have to wait in normal traffic, as a resident
of Flamingovlei, I would like to object to the proposed feeder bus route as follows:
396.
All streets in Flamingovlei are within walking distance of the main trunk route in Blaauwberg
Road, passengers will not want to wait for a bus when they could walk to Blaauwberg Road
quicker and save the R5+ bus fare.
See discussion at item 260.
397.
Environment impact on Rietvlei.
See response above.
398.
Large unsightly feeder stations directly outside people’s houses and ruining the aesthetic
beauty of the area.
See items 262 and 321.
399.
Increased traffic in our quiet suburb, where children play and cycle in the streets.
This project attempts to reduce car trips through attracting private vehicles users to public
transport.
400.
Increase in crime rate because potential burglars have an excuse to be watching properties,
while they are supposedly waiting at feeder stations (according to SAPF this is a known fact).
See response above.
401.
Increased litter and undesirable behaviour around the feeder stations.
See response above.
402.
Properties devaluing, especially those around the feeder stations.
See response above.
403.
Traffic in Study Street is already heavily congested due to the entrance to the Flamingovlei
Square Shopping Centre and with the men standing all along South road adjacent to the
shopping centre and at the corner of Study and South Road looking for work, is a major
concern to residents in Flamingovlei who have to travel up Study Street to get to Blaauwberg
Road or the Flamingo Square Shopping Centre. Study Street is a short street and does not
lead to any school i.e. high school or junior school so will not benefit residents in the
immediate vicinity of Study Street but will affect our quiet area with busses running throughout
the day and probably at night.
The current route has been reviewed to improve coverage in Flamingo Vlei.
404.
We sincerely hope that a thorough study is made before any final decision is made regarding
the affect this feeder bus route will have on the residents in this residential area where crime
and safety is a concern for all of us.
See response above.
Margot Jensen
405.
Although the main IRT trunk routes, with their dedicated lanes, are fantastic for the City and
will bring great relief for passengers who would usually have to wait in normal traffic, as a
resident of Flamingo Vlei I would like to object to the proposed Feeder Bus route as follows:
Comment on BP and City response Dft4.12 101008.doc
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406.
All of the streets in Flamingo Vlei are within walking distance of the main trunk route in
Blaauwberg Rd, passengers will not want to wait for a bus when they could walk to
Blaauwberg Rd quicker and save the R5+ bus fare.
See discussion at item 260.
407.
Environmental impact on Rietvlei would have disastrous consequences with informal
settlements springing up, etc.
See response above.
408.
Sewage and other pipelines run down the middle of Pentz Drive. Road collapses, due to
crumbling concrete pipes, sink-holes and burst pipes, in recent months/years (this is an
ongoing process) in various parts of Pentz Drive cannot sustain high volumes of traffic.
Road pavement assessment (where required) will be completed before any implementation of
services
409.
Extra weight bearing cannot be sustained by the current road infrastructure which was not
designed for such traffic loads. We have already seen an increase in local traffic along Pentz
Drive and this is already having an impact on the infrastructure.
See response above.
410.
Large unsightly feeder stations directly outside people’s houses, destroying views and ruining
the aesthetic beauty of the area.
See items 262 and 321.
411.
Increased traffic in our quiet suburb, where children play and cycle in the streets.
See response above.
412.
Children who walk to the various schools in the area use Pentz Drive because it is safer, due
to the limited traffic.
See response above.
413.
There are a number of pensioners in this area who feel safe and are able to take a walk every
day, enjoy doing so because of the serenity of our area that is safe and free from noise, traffic,
undesirables, etc.
The feeder service will support and better enable this.
414.
Owners take their dogs for walks because the area is quiet and away from distracting noises.
The feeder service will not negatively affect this activity.
415.
Increase in crime rate because potential burglars have an excuse to be watching properties,
while they are supposedly ‘waiting’ at feeder stations (according to SAPF this is a known fact)
See response above.
416.
Increased litter and undesirable behaviour around the feeder stations.
See response above.
417.
Properties devaluing, especially the ones close to the feeder stations, resulting in loss of jobs
for maids, gardeners, etc.
See response above.
418.
Increased traffic congestion at the intersections of Study and Blaauwberg and Pentz and
Blaauwberg, which is already problematic.
See response above.
419.
The route is not sustainable and is a waste of the ratepayer’s funds.
See response above.
420.
As per covering letter and comments from Golden Arrow Bus Services
Keith Skidmore
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421.
I have several objections to this absurd idea of a bus route through Study Street and along
Pentz Drive. I live in 13 Donkin Avenue (erf: 4862) and am objecting as follows:
422.
Where in the world do they have bus routes in the middle of quiet residential suburban streets.
Bus routes are only found on main roads and thoroughfares. Why on earth would the City of
Cape Town want to run a bus route into Pentz Drive when the main bus route in Blouberg
Road is accessible and within walking distance of anyone living in the area of Flamingovlei. It
makes no sense and seems to be a total waste of money.
Not true. Pentz Drive is the ideal road for such a feeder service. Re. walking to Blaauwberg Rd:
See discussion at item 260.
423.
None of us know how fast these buses will be going, but this still sounds very dangerous on a
quiet residential road where children are crossing.
See response above.
424.
It will definitely mean a large increase in traffic, and people waiting for buses outside houses,
resulting in a decrease in value of the unfortunate houses involved.
See response above.
425.
Needless to say, also an increase in crime with a perfect get-away vehicle right outside the
house that has just been robbed. I am not being racist, but realistic, and this observation is
based on conversations with the Tableview Police who have all the reports on all the house
robberies in and around Tableview and Flamingovlei. This is a reality we all have to live with,
and we don’t have to make it easier for criminals to get away with their crimes by providing
them with the necessary transport and opportunities of “loitering with intent”.
See response above.
426.
As a ratepayer I am obviously paying for this IRT transport system, and I was not consulted
regarding this proposed feeder route. It is an extremely bad idea, and one that no thinking
person would agree to. I am a thinking person and object most strongly to this ridiculous route,
which will have a huge negative impact on the area of Flamingovlei.
See response above.
427.
There will be enough problems created with the new IRT system in Blouberg Road, please
don’t worsen them by encroaching into our relatively peaceful neighbourhood.
See response above.
428.
We bought and paid for our houses here, and it is our right to fight for the right to live in
relative peace and safety.
429.
We bought and paid for our houses here, and it is our right to fight for the right to live in
relative peace and safety.
Pat Downing
430.
The fact that Pentz Drive is to be used as a route for the feeder busses for the IRT is beyond
comprehension.
See response above.
431.
Flamingo Vlei is an elite suburb and especially the houses along Pentz Drive are extremely
highly valued by the City of Cape Town and priced and pay rates accordingly. The owners of
these homes chose to purchase in that area due to its beauty, peacefulness and tranquillity. If
they had wanted to live on a bus route, they would have purchased homes along Blouberg
Road.
See response above.
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432.
Now all that is to be shattered, why not route the feeder busses through Parklands main road,
which is already a mess and where it is more likely that they will run full at all times.
The City has recently reviewed routes within the Table View area, which now covers this
comment accordingly.
433.
Having feeder busses traverse Pentz Drive day and night will lead to more criminal activities in
the area. Was a survey ever conducted in this respect? When a new suburb is opened and
plans are drawn and roads and areas or demarcated for residential, commercial, businesses,
parks, schools, hospitals, churches, sports grounds and open spaces. People then have a
choice of purchasing a home in a street and area that best suits them. How can the powers
that be, whose salaries incidentally are indirectly paid by the rate payers, bulldoze these very
rate payers into having a feeder bus service through their area?
434.
This whole IRT in my opinion was never thought through correctly - a bus route in the middle
of a highway - it is in people’s nature to run across a road - mark my words! Even with all the
road work that is taking place, not only the public but also the construction workers are
hopping over bollards, tape etc to cross the road. Blouberg Road and if you include the centre
isle, is wide enough to have run a bus lane down each side and had the car lanes down the
middle.
The use of the central island promotes swift movement of trunk vehicles with limited friction.
Kerbside lanes are subjected to continuous friction competing with left turning traffic, parked
vehicles and other. The median lane solution also saves cost in terms of stations. Kerbside
lanes require two stations at each trunk stop location. Access to these trunk stations will be
channelled to intersections. The design chosen is the most cost effective and environmentally
sustainable solution.
435.
I'd like to ask if anyone has seriously inspected the intersection of Blouberg Road and Otto du
Plessis Drive. Driving along Otto du Plessis and turning right on to Blouberg Road, the car
lane and bus lane merge - during daylight this is confusing and at night it will become a 'death
trap'.
At no stage do the general traffic lanes and dedicated bus lanes merge. Right turning traffic will
be guided to the correct lanes by appropriate marking through the intersection.
436.
I would appreciate your opinion on the above and am willing to meet with you and accompany
you to inspect all the various aspects of this IRT.
437.
Years ago we had a similar situation crop up with regard to the municipality wanting to put a 4
lane highway through on Porterfield Road, which the residents managed to 'squash'.
An appropriately size feeder vehicle providing feeder transport to local residents and visitors in
Flamingo Vlei cannot be compared to a 4 lane highway.
The residents are the body of the dog and the dog wags the tail!
438.
Comments from six individuals
439.
Michael Arendse
440.
Tickets are made available for daily, weekly or monthly use. Daily tickets (a Single Day Pass)
should allow whole-day travelling. When the system was being tested in the CBD it cost R8
per trip or part thereof – no wonder the service had to be suspended – people (even I who can
afford it) found it only slightly cheaper than using my own car. Additional proposals:
o
Locate some metered taxi ranks adjacent to the Civic Centre IRT station. This would
ease the transition from the bus shuttle-service and take tourists/visitors directly to
their CBD-, Atlantic seaboard- or Waterfront-based accommodation; and
o
Identify a site close-by to the Civic Centre IRT station from which to base a car-rental
Comment on BP and City response Dft4.12 101008.doc
The inner city service during the World Cup was focusing on visitors rather than commuters. It
was priced at this level so as not to compete with other public transport services.
The IRT will not be similarly constrained. Lower tariffs were approved in August 2010, including
the option of a full day unlimited pass for R15.
Regarding the additional proposals:
o
There are already metered taxi stands next to Civic Centre Station. These are relatively
well used. In addition, the City displays number of providers of taxi services at the
station, so passengers can call in case no taxis are available when they arrive.
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service.
City response
o
Regarding car rental: The City may inform car rental companies about this opportunity,
but they will have to make their own assessment as to the benefit to relocate, and will
have to source their own premises.
441.
Maureen Ursula Havenga
442.
The service will be made available to more people if operated from Train Stations in the
broader Municipal Service Area. Not only should this service operate from the larger Train
Stations such as Bellville but be extended to smaller Train Stations such as Stikland and other
smaller Train Stations that have to rely on non-regular transport. I use the Train Service to
commute to work and home every day from Monday to Friday and this service leaves much to
desire. Stikland Station is one of the smaller Stations that is not so well served by a regular
Train Service and with alternative transport all commuters that utilise Stikland Station can
have an alternative and more reliable means of transport.
443.
To the City of Cape Town, keep up the good work that you have achieved when you
introduced the MyCiTi Bus Service and expand it to all the outposts of the City of Cape Town.
You will be generously rewarded in terms of financial gain as more and more commuters
change from the existing non-reliable public transport to the MyCiTi Reliable Transport.
Agreed. The Phase 1A routes connect well with the existing rail network at Woodstock and
Cape Town stations.
444.
Phoebe Barnard
Birds & Environmental Change Partnership, Climate Change & Bio Adaptation Division, SA
National Biodiversity Institute, Kirstenbosch Research Centre, Claremont
445.
1. We can’t wait for this system to be rolled out. Thank you for planning and
implementing it. We know it has not been easy, so congratulations and thanks!
446.
2. The City of Cape Town’s responsibility is first to facilitate easy, safe and affordable public
transport to those without private transport, as a means of minimising the negative impacts on
people’s day to day lives of the spatial footprint of the old Group Areas Act, and maximising
human well-being during this commuting; and second to facilitate the transition of society as a
whole from private to public transport wherever possible, to alleviate congestion, to reduce air
pollution and carbon emissions, and to achieve a range of social, health/fitness and urban
ecology aims by getting people out of private cars and interacting with their fellow
Capetonians.
Agreed.
447.
3. To be effective at the latter, among consumers who have a choice between private and
public transport, the public transport option needs to have, upfront and not dependent on a
trial period, a committed regular schedule of buses, which are inexpensive (the proposed
tariffs in the business plan are good), clean safe and reliable. It’s pleasing to see what Cape
Town has learned from Curitiba and other cities (as well as its own experience) on this line.
The current Golden Arrow service is an example of how old-fashioned assumptions about
people and their mobility (maids and gardeners in the suburbs), combined with noisy, smelly,
lumbering old empty buses, are not appropriate for the modern city.
The statements regarding a need for a high-quality public transport system that is inexpensive
clean and reliable are supported.
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448.
4. It think it’s fair to say that the bulk of car-owning Capetonians are apathetic and self-serving,
and need a combination of incentives like MyCiTi and severe disincentives (like fines and tolls
on 1-passenger vehicles) to start switching to public transport. They also need a good public
awareness programme, which also focuses on the wider benefits for them personally (e.g.
health/walking from the bus stop to work, chatting to people, reading the paper on the way to
work rather than getting stressed and fumed in traffic jams.
The city has prepared a travel demand management strategy which details the proposed push
and pull factors. Only once an established and effective public transport system is implemented
can these measures be introduced. The City is investigating way of encouraging public transport
use, and discouraging the use of private vehicles along corridors where appropriate alternatives
exist.
449.
5. The system absolutely depends on the wide availability of clear, colourful, accurate maps
and schedules.
Agreed.
450.
6. Our own area (the Far South peninsula, which has not yet been catered for) is a likely
hotbed of success for subsequent phases – please extend it here, asap! The Far South has a
high percentage of well educated and well meaning people who are environmentally literate
and health-conscious, and can be tapped by the City to test and trail subsequent phases.
South Peninsula is currently serviced by rail. The key objective would be to seek to improve
feeder services to rail.
451.
7. In most areas, MyCiTi buses really need to integrate seamlessly with rail and taxi routes
and schedules for this to work, and also, for the City’s awareness programmes to highlight the
experiences of everyday people (I’m happy to volunteer if nobody better does!) to encourage
others that using public transport is much nicer and more efficient than they think. (But, of
course, it does not have to prove to be nicer and more efficient!).
Agreed.
452.
Marieta Fourie
453.
As far as I understand, there is only a busroute to Scottsdene on the far northern suburb, I
want to plead that they must also include the part of Kraaifontein north of the N1 road. The
train service early in the morning from Kraaifontein to Town is very limited, and I am sure that
the bus service from Kraaifontein will decrease travelling time for commuters early in the
morning. On the Kraaifontein route, trains are also easily cancelled and then commuters are
stranded.
The future rollout will be subject to a more detailed assessment and consultation. Factors that
will play a role will include socio-economic, financial, passenger demand, and existing public
transport service.
454.
Mike Little
455.
Firstly, thank you for the opportunity to contribute to the discussion, and hopefully future,
around Cape Town's transport. I love this city and would love to help in every possible way. I
have many ideas that I would like to share but for today I will give this main one.
The sentiment is sound and underlines the argument that public transport will significantly
reduce transport costs for citizens.
456.
My Idea: I for one would happily give the equivalent of the value of my car and what it costs
me to run it in investment towards the city transport provided the eventual transport system
can satisfy my needs. So my idea is essentially that perhaps there are others like me who
would be happy to contribute towards it and therefore see it being a world class system as you
guys had enough money to do the job perfectly.
This comment shows that there is considerable support for a significantly improved public
transport system, even if this requires higher taxation or other charges – provided the poor can
access the system too.
457.
So some information for you to consider:
• My car is worth around R35 000
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• I spend about R15 000 a year on petrol, insurance and maintenance
• I can't meet new people or talk to them as I travel around the city
• I can't make phone calls easily
• I worry about theft and damage to my car
• Worst of all I have to find and pay for parking in most areas – at a ridiculous cost
458.
Considering all the above I would happily give you all the above costs, for arguments sake
let's say about R120 000 over a period of 5 years, if you can deliver to me a world class public
transport system for free for those 5 or more years. Not having a background in finance I am
not sure how it would all pan out but my philosophy of government and leadership is one of
'show me something worth supporting and I will back it wholeheartedly' as opposed to the
current 'we give our government our taxes and hope some of their decisions result in things
that I agree with'.
459.
I think providing a world class transport system is almost sacred as one cannot put a price to
keeping +/- 300 000 (?) working people out of traffic twice daily. It means they have more time
with their families, less chance of having road accidents and it results in far less pollution. All
those things are incredibly important. We only have one environment, one life and one family –
we cannot afford to keep having so many road accidents (and sometimes deaths), children not
seeing their parents until 18h30 in the evening and an environment continually being
destroyed.
460.
In conclusion please do the best you possibly can with all resources available to you, please
be willing to be a bit creative in your methods of finding finance and finally don't be afraid to
dream big dreams about just how good our transport system can be!
461.
All the best, thanks for reading all of this and good luck, I wish you well!
The City agrees that careful quantification and comparison of the relative costs of private
transport versus public transport in different areas should be part of the decision making
process for investments in the transport system.
462.
Peter Smulik
463.
A new system, fraught with shortcomings, about to be unleashed on the public.
464.
Fares: critical issue No 1
465.
It is not clear how feeder service fares will be determined. Whereas it may be possible to
swipe a smart card on designated feeder buses, the same cannot be said for taxis, current
buses and Metro Rail, feeding in or out.
The fare structure for the feeder service is proposed to be a flat fare of R5. Customers will tap
on the feeder bus using his/ her smart card. The proposed plan involves the replacing of all
existing services over the next 20 to 25 years and therefore there will be need to adapt the
current public transport fleet. However, there is a need to investigate how the existing services
can be adapted in the transition period. The City will work closely with bus, tax and the rail
operator to manage this transition accordingly.
466.
The arbitrary fare of R5 and R4 looks good for now, but over time will need inflation
adjustments. It can then become R5.25 or some other incremental amount, making for less
convenient payment, other than by Smartcard.
As indicated, a smartcard is a solution
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467.
However, it seems, no smartcard - no transport, which in turn raises the question of where
visitors and other occasional would-be users stand. If it’s like now, where time tables are not
displayed but only available from the office of the bus company, and Smartcards will only be
available from certain outlets, and maybe even at an initial cost, then forget occasional users.
I, for one, am not prepared to fork out money for a Smartcard, like we had to some years ago
for the ADO parking card, which the City then scrapped, and nobody will refund the initial
expense.
In case of the ADO parking card, there was adequate opportunity to obtain a refund.
468.
Using current GA bus + BRT + taxi will cost a fortune, as there will be no common tickets, or
will Metro Rail / Golden Arrow etc also work on Smartcard?
National DOT’s policy is that all public transport must convert their fare systems to smartcard
systems, which will allow for appropriate fare integration.
469.
Unless ONE common payment system for all public transport in the region is implemented,
people will be very hesitant to use BRT / IRT in conjunction with currently existing transport
modes. Judging from the plans, existing transport modes will be in use for at least another 20
to 30 years. During that time it cannot be expected from passengers to buy one set of tickets
for one type of transport, and another for the IRT. Even if taxis are excluded, where
implementation of a ticket system may be impossible, GA and Sibanye buses, and the Metro
must become part of one ticketing structure.
DOT standards, published earlier in 2010, opens the door to a common payment system for all
public transport, and for future joint transport products (eg tickets across different modes).
470.
The same can be said for season tickets. Daily travellers, who currently buy weekly or monthly
tickets need to be able to do the same on the IRT. No season tickets, no passengers, that will
be the bottom line.
The City is investigating introducing multi-trip transport products.
471.
Currently, a person travelling by car in peak traffic uses approx 1L of fuel per 5 to 10km, say
7km on average, which costs some R7.50. Thus for 28 km, about the distance from M/Plain to
the City, or Wynberg to Bellville, that costs R30, or R60 per day, just for fuel, and takes
between 1 and 2 hours one way. If the aim of the IRT is to get people “off the road”, then
unless public transport can half that cost, maybe even reduce the travel time, there is little
chance that people will swap their cars for public transport.
Agreed. The proposed IRT cost from M/Plain (assuming 28km) will approximately be R27 return
trip which is significantly less to the direct cost of travelling in the vehicle. Current congestion
levels along Vanguard and N2 is high and therefore it is projected that travel times will reduce
significantly. The current bus minibus taxi lane on the N2 has resulted in taxis doing two trips
now compared to the one trip they did before. In addition to the quantitative benefits (time and
money), the IRT more importantly improves the qualitative benefits of safety, security,
convenience, reliability and others which in most cases are the determining factors whether to
use public transport or not.
472.
To charge a rate per km is not fair to those travellers worst off, i.e. the ones who live the
furthest from their work place. If at all, the rate per km should reduce the longer the journey, as
is commonly practiced will all other modes of transport. However, instead of a rate per km
there should be established zones, clearly identified, giving the detailed cost of travel on a
chart before one starts the journey. One can then chose the number of zones required and
pays up front. Paying per km requires swiping the card before and after the journey, which not
only delays passengers leaving the bus stop, but could cause problems in case of
malfunctioning equipment, especially at the end of the journey. Furthermore, one would never
know the actual fare, or at least not in printed form.
Yes, distance based fares penalises the customer who travels further. To overcome this issue,
the city has capped the distance based calculation to a maximum of R16 in the peak and R15 in
the off-peak. The fare structure will be further reviewed by investigating transport products to
ensure the IRT fares are comparable with existing fares.
The entire idea of Smartcard is fraught with possible problems resulting in many delays, wrong
charges and dissatisfied travellers. It will not matter how nice the buses are, but whether the
fare hits in the pocket or not! People use taxis, not because they are comfortable, but because
they are relatively cheap and convenient, and are available almost anywhere and anytime.
The Smartcard reduces the risk of cash handling and provides a convenient medium to carry
fare and transport products. The Smartcard is read by electronic devices that are programmed
and tested before commissioning that the correct fares will be deducted and rules applied
according to the system design. The provision of station kiosks, retail vendor system and call
centre provides a support system should any user have a problem with their Smartcard.
473.
Comment on BP and City response Dft4.12 101008.doc
The MyCiTi fare system will comply with these standards, and will be the first step toward
achieving this ideal.
Yes, distance based fares requires tapping on and off which will simplified by the city’s
proposed fare management system. The only system that does not allow tapping off is a flat
fare system which has a disadvantage of irrespective te distance, the fare is the same. Short trip
travellers usually complain with the fare level compared to their short distance travel. Tap off
and in systems also provides good data which is useful for future planning and improving.
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474.
Routes and times: critical issue No 2
475.
Yet again concentration is towards the inner city, while routes across the flats are neglected.
Thousands travel from the Southern suburbs and M/Plain & Khayelitsha to the Northern
suburbs (Parow to Bellville) to work, who will not be catered for, at last not for many more
years. The nearest junction to change seems to be Woodstock, some 15 / 20 km from the
R300 and Bellville. As payment by Smartcard will be charged by km, that adds a massive and
unnecessary amount to the cost of travel.
Phase 2 and beyond will deal with the south eastern metro comprehensively. Planning and
design for phase 2 will commence shortly. Woodstock station will provide great access to the
R27 corridor. All rail lines pass through the Woodstock throat as they move to City. Woodstock
station will provide a good alternative to existing public transport services travelling northbound
along the vanguard drive corridor to areas like Montague gardens, Table view, Killarney and
others. Again the fare is capped.
476.
Feeder Houtbay: what happens to the existing buses? By all accounts, they’ll be withdrawn.
Indeed, existing buses used for scheduled bus services between Hout Bay and the Inner City
will be withdrawn and replaced by IRT services.
477.
All routes need proper display of timetables and bus numbers with their routes shown at
EACH bus stop. Unless a proper identification system is installed at each and every bus stop,
and not only the IRT ones but also the current ones, where passengers can read which bus
stops there, identify its route and scheduled times, no significant increase in passengers using
public transport will happen. Buses must be identifiable exactly like Metro trains, by time tables
and clearly defined routes, easily understood by all travellers.
These identification and information elements form part of the MyCiTi design. (!)
478.
Furthermore, the timetables must be integrated, so that train arrival at a station coincides with
a bus departure from there, and not that the bus departs 2 minutes before the train’s arrival.
Equally, bus times must be integrated with one another, feeder bus arrivals with trunk route
buses, and vice a verse, as well as BRT with existing bus routes.
Agreed and covered accordingly. **
479.
Last but not least, a clear regional route structure must be produced and prominently
displayed at least at major transport intersections, showing all available routes of buses (BRT
and the current ones) and trains.
Agreed and will be investigated.
480.
Existing operators
481.
To some extent a modus operandi has been thought out to either integrate or buy out current
taxi operators, but nowhere is it clear where the current bus companies stand, Golden Arrow
and Sibanye. Will they be phased out over the next decades, or what?
This aspect is explained in some detail in Chapter 10 of the Business Plan. (!)
482.
The existing bus routes could offer a much improved service (currently it’s hardly a service), if
proper timetables and route maps were displayed at all stops, and times between routes were
integrated and adhered to. Of course surface transport will always be influenced by traffic
conditions, but unless the first step is taken and a proper operating system is created, no selfrespecting traveller will change from the car to a bus.
Choice users will only shift to public transport if its 1) quicker and cheaper (quantitative) and 2)
safer, more secure, more reliable, more convenient, more flexible and regular and others
(qualitative). Unfortunateky the current road based public transport cannot provide this. The
factors are fundamental in the design of the current IRT system.
483.
Re-skilling taxi industry
484.
This will only address part of the issue, the other being that of proper training of existing bus
drivers. Currently, most bus drivers RACE their buses, overtaking taxis and other buses in the
process, often blocking the road for other traffic, only to get from A to B in the shortest
Comment on BP and City response Dft4.12 101008.doc
A very successful training programme has already been instituted for the World Cup Service.
As part of the bus procurement programme, the training of drivers was included in the bus
supply tender.
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485.
Comments
City response
possible time. If public transport is to attract more people, drivers must be trained to drive with
sense, and drivers must adhere to timetables (of course they have to exist in the first place).
Departing from a bus stop before the scheduled time is out of the question, although buses
can run late due to traffic conditions. Driving buses to schedules is an art, something the bus
drivers in any South African city have yet to learn.
In the IRT system, there is no need for drivers to race. Through the Control Centre every bus is
tracked and programmed to a schedule. On the truck routes drivers will be advised by the
control centre to slow down or speed up along a route to ensure they adhere to the schedule.
Hand-in-glove with this re-skilling must run a programme whereby the city traffic police enforce
road rules. For instance, along Main road from Cape Town centre to Wynberg, there are many
sections of no-stopping after 16h00. As these restrictions are regularly disregarded by other
drivers, the Traffic Department needs to start enforcing the rule with vigour, so that buses (and
mass-taxis too) have a clear lane. Install cameras like on the N2 and fine perpetrators heavily,
and at the same time action speedy removal of vehicles transgressing the rule.
Having the bus lanes on the right (like on the N2) instead of on the left (as is the case in Main
Road) allows for easier enforcement. All IRT trunk routes have dedicated bus lanes on the right
with bus stations in the median. The lanes are coloured red and have delineators to ensure cars
do not venture into the red lanes. The system has therefore been designed to make
enforcement easier.
486.
Railway (to Atlantis & other)
487.
To say there is no railway line to Atlantis is misleading, as there is (or at least was) a
commercial track. That should have been incorporated into the Metro system long ago, similar
to the Metro extension to Wellington. Besides, there still is a line to Darling, which could be
used to connect Atlantis to the grid instead of building a new bus track at much higher cost.
Besides, a rail connection would give Atlantis the added benefit of better contact with places
such as Bellville and Malmesbury.
See par 36 on page 8.
488.
In general, the opportunities offered by the Metro are far from exhausted, the frequencies with
which Metro trains operate, particularly on the Khayelitsha line, are far too widely spaced,
especially during peak hours. The willingness of PRASA and Metro Rail to vastly improve the
current service is questionable, yet most critical.
Agreed in principle. However, the problem at present is insufficient rolling stock to run more
frequent services. Besides, the intention of IRT is not to replace but to complement the rail
services.
489.
Train routes should rather be expanded, for instance to include Grabouw, and unused existing
tracks should be revitalised instead of building expensive new bus lanes.
IRT is for the moment limited to the City of Cape Town service. New rail infrastructure is
extremely expensive. There is no plan to build exclusive bus lanes to all destinations.
490.
In conclusion
491.
Unless the public transport system offers the traveller an attractive, convenient and
economical alternative to car travel, it will turn out to be a white elephant. In addition, engaging
the full co-operation of the Traffic Department is an absolute must. Other drivers will continue
to upstage the movement of public buses, something Traffic officials will have to monitor much
more closely than now.
It is agreed that the MyCiTi system must offer an attractive, convenient and economical
alternative to car travel, and that enforcement of traffic rules (including the exclusive bus lanes)
is a must. (!)
492.
I have travelled on many good public transport systems, but while not knowing the cities where
IRT systems are used worldwide, I do know that one of the best, if not THE best public
transport system in the world is in Vienna, Austria. In that city one does not need a car, it’s
almost impossible to park it anyway, and if so it costs a fortune. Depending on the time of day
and night, days of the week etc, the frequencies of buses, trains and TRAMS are determined,
the latter being modern and convenient. All systems operate till late at night, with well
integrated timetables, while between midnight and 5h00 there is a night bus service available,
which excludes trams and the underground.
In principle, the IRT system is specifically aimed at providing a world class public transport
system, within available budget. The City is working current operators to this end.
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493.
It is imperative that the planners of the IRT understand and appreciate that current personnel
in South Africa’s public transport operations, from top management to the lowest clerk, have
either not the mental understanding of the needs of a modern system, or are unwilling to
implement it. If the latter is the case, there is hope, but if people are incapable of grasping the
needs, and cannot effectively implement well designed plans, the entire operation will
collapse. That’s my fear! Furthermore, appointing “appropriately qualified” people to manage
the operation is often an inadequate selection criteria. People need to have first hand
experience with such systems, not only operating, but also using them. Those who have never
travelled on any better than the current Golden Arrow, or always travel in their own car, cannot
be expected to add anything to enhance the quality of the operation, or even just run it
efficiently. The existing systems could have been vastly improved long ago, it is beyond my
understanding why they have not, but it is indicative of the mental attitude of not only the
public in general, but primarily the companies and municipalities operating them. Besides, the
heads of National and Provincial Departments of Transport have over the decades been
progressively worse, one after another, which suggests that historically we have little chance
for this new concept of IRT to be much of a success. In the meantime, Transnet continues to
reduce essential “non-core, unprofitable” services, thus further showing little willingness to
address the needs of the population at large.
494.
It is also my fear that many lose ends have not been addressed, or at least not adequately,
and that the operation will prove to be too complex to use. In the end, the system has to
market and prove itself to those travellers currently using their cars in the first place, and only
to the travellers using public transport currently in the second. The latter are and will remain
the unfortunate ones that have no choice, as they are largely too poor to afford a car, and are
thus entirely dependent on public transport. But unless IRT can make inroads into the usage
of private cars, it will become a white elephant, without fulfilling its primary objective, that of
taking cars off the road.
City response
The City is committed to developing a viable and effective IRT system. Further investment in
road space to service private transport is a much lower priority.
Vehicle Operator Company A, comprising of Golden
Arrow, and three taxi associations based in the Inner City:
comments and questions regarding Business Plan
495.
1. Will the feeder vehicles be available at the intended start up date of September and has the
vehicles supplier been earmarked?
The City is revising the spec for the feeder vehicle and will be going out to tender again for the
supply of the feeder vehicles. It is planned to have the vehicles ready by Sep/Oct 2011.
496.
2. The shortfall in the set fares will be covered by the City and should be written into the
business plan or the contract. This needs to be stipulated that even if National grants are not
forthcoming the shortfall will be made up over the timespan of 12 years.
The VO contract between the City and the VO companies will provide the guaranteed payment
for services rendered. These contracts will be legally binding on the City and will not be subject
to National grants being available.
497.
3. The principle of awarding the service within a particular phase to a competitor company
should the other company not be up and running, as indicated in the meeting of the first
business plan presentation, goes against the spirit of the IRT. In this case it would mean that
ALL members within a company are being penalised when only one member could be the
recalcitrant party delaying the process. This point should be revisited.
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498.
4. The area of compensation needs to be clarified, especially in terms of the proposed
contractor buyer of the vehicles. This is a critical aspect and need to be fully determined and
encapsulated in the business plan as it will mean vehicle owners will have to make a decision
by a set date, which the City would possibly not deviate from. This would mean that taxi
associations need substantial time to canvass their membership around participation.
499.
5. The options for the ownership of the vehicles/busses need to be discussed especially in
terms of the preferred Option D which the City has. This option mentions ‘credit worthiness’
which the VO’s need to have, while it remains only a shell at this point with no balance sheet.
500.
6. Clarity needs to be gained around the Municipal Entity (ME). The VO companies will to
operate, liaise and be accountable to this entity, while it would possibly not be in existence
when operations start. What would be the mandate, powers, duties etc be of this body, who
would be the individuals running this entity, what would the capacities and capabilities of such
people have to be? Will the VO companies be represented on this body as well?
501.
7. Although it has been stated constantly that the different contractors (fare management,
station services, control centre, cleaning, security etc) will run the individual aspects of the IRT
there still needs to be a clear understanding how the interaction amongst these various
contractors and the VO’s will be run. Does it mean that ALL the contractors will bear
responsibility for incidents that are penalisable or only one and who will be determining where
the mistake/s was made and by whom? (NOTE: page 63 alluding to this is quite generic)
Clear lines of responsibility that each contractor has for its contractual requirements will be
contained in the contract agreement. In addition this “responsibility protocol” will be ensure that
each parties understands the interaction between its own responsibility and other contractors.
The MyCiTi management unit will co-ordinate and monitor and impose penalties where there is
non-compliance.
502.
8. Coupled to the above, who will draft the inter relationship contracts between contractors? If
it is the MyCiTi Project Office will they have these contracts available by the start of the
planned phases?
It is the MyCiTi Project Office that will develop the “responsibility protocol” which will form part of
each of the contracts, and contracts will include such provisions at the time of them being
concluded.
503.
9. The security of the routes in the event of sabotage, strikes, riots etc. need to be taken in
account
Noted
504.
10. Will the extra drivers needed for the complement still be trained by Volvo at as part of the
contract with the City or will the VOs be carrying the costs?
The training of drivers was part of the tender for the supply of buses. This is likely to be part of
the future bus procurement tenders, but the Operator will also have responsibilities for on-going
training.
505.
11. It has been stated that members from taxi associations will get preferential benefit as job
seekers in the IRT. Does this hold for all the different entities or only for the VO companies?
It holds for all the entities. However, there will always be the rider that the relevant job seekers
must have the necessary skills to be considered for such employment.
“Credit-worthiness” for the VOs will be less of an issue for the financial institution proposed to
own the vehicles, since the funds required to pay for the lease is proposed to be paid to the
financial institution on behalf of the VO by the City – drawing from fares received and from the
interest to be paid by the financial institution to the City upon funds invested by the City in the
financial institution, which again is raised by the sale of the vehicles to the financial institution.
However, the financial institution is expected to require of the VOs to take physical and financial
responsibility for the vehicles and any damage caused to them while under the control of the
VO.
Vehicle operator company B grouping, comprising of
Sibanye bus company and six taxi associations in the
Blaauwberg / DuNoon / Atlantis areas – Comment on
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Business Plan
506.
Recordal
507.
The Blaauwberg, Du Noon, Maitland, United and Ysterplaat Taxi Associations and Sibanye
Bus Company currently grouped into the IRT company B grouping wish to indicate that the
comments contained in this submission cannot be viewed as their full and final comment on
the MyCiTi Business Plan.
Noted.
508.
On Tuesday 24 August 2010 five working days before the deadline for the submission of
comment, the City of Cape Town convened an information and consultation session with
affected industry role players. The purpose of this session was to consult affected industry role
players on the content of the MyCiTi business plan.
509.
The consultation session only addressed three issues contained in the business plan, namely
the proposals for acquiring vehicles, the proposals pertaining to phasing –in (milestones) and
a proposal for further inner city services from September 2010 to October 2011.
The key elements of the Business Plan have been discussed with the representatives of the
affected industry from January 2009. Two detailed documents setting out the proposal to the
existing industry and the detail of the vehicle operations have been made available to the
affected industry in February and August 2009. A summary information document as required in
terms of s33 of the MFMA was published in May 2010 and the Business Plan approved by
Council in July 2010 was made available to the public early in August 2010.
510.
511.
As such the consultation session failed to properly inform affected industry role players of the
full extent of proposals contained in the business plan and deprived industry role players of the
opportunity to properly engage the City on all aspects of the proposed business plan.
In addition, the City is funding the work of facilitators for the different company groups with
whom the City plans to negotiate – who were selected by the industry itself and who are
responsible for work shopping with their allocated industry reps.
Therefore the City is satisfied that it has provided sufficient opportunity to the affected industry
to familiarise itself with the Business Plan, and to influence the business plan.
In the view of this the company B grouping puts on record that the limited information session
held on 24 August 2010 is not accepted as a proper consultation and further record that based
on the input contained in this submission and any earlier submissions we or our facilitator
have made, we expect the City to commit to a proper consultation process with affected
industry role players, prior to adopting this business plan.
512.
1. Structure of discussion that resulted in this comment
513.
In order to arrive at the comment outlined in this submission a work session with company B
industry role players was held on 30 August 2010.
514.
At the onset of the work session industry role players were given the opportunity to table key
concerns emanating from their “reading” of the business plan document after which the
facilitator engaged each issue in a systematic manner with the view to (a) explain the rationale
behind a provision, (b) explore viable alternatives to the problem area highlighted (c) assess
the legal foundations of provisions being challenged, and (d) explore linkages between issues
and alternatives.
515.
The record of issues and alternatives raised, therefore does not follow a chapter-by -chapter
logic, but rather an issue-by-issue logic.
516.
Where possible the author tried to group like-with-like issues.
Comment on BP and City response Dft4.12 101008.doc
Noted.
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517.
2. Issues and alternatives
518.
2.1 In respect of the business structure for IRT operations company B representatives
questions why so many functions are retained by the City?
The representatives in this context asks what the cost and labour absorption implications are
of this business structure, and moreover asks if the prospects for cost reduction and higher
labour absorption would not improve if more roles and responsibilities are shifted to the VO
companies?
519.
2.2 The representatives feel that the business plan is not clear on how the market share of the
bus companies was determined. This needs to be clarified before company formation
processes can be completed.
The control centre contractor and the fare system contractor, because these services are
intended to assist (a) controlling the service; and (b) managing information and infrastructure
regarding the fare system, The VO companies cannot participate in these companies because
these functions must be performed independent of the VO company.
The VO company cannot itself operate the stations, since the City wants to separate bus
services and receipt of money, which is the function of the station services company. This is the
international best practice. *
The market share of bus companies was determined using detailed surveys of passengers trips
on all directly and partially affected modes (bus or minibus-taxi), determine the market share of
each mode using fare revenue times number of passengers as a criterion – see Business Plan,
Annexure F, par 3.2, page 132.
This can be further clarified through direct engagement.
520.
2.3 The industry role players maintain that in spite of earlier explanations about legal
limitations, the contract period of 12 years with no guarantee of renewal after 12 years, leaves
the industry (VOs) with an unacceptable level of risk. The risk is now compounded by the
vehicle ownership model proposed by the City in accordance with which the VO only obtains
ownership of the fleet at the end of the 12 year contract period and could end up with a fleet of
vehicles with limited if any life span, and limited or no resale value. It is therefore proposed
that the issue of right of first refusal at the end of the 12 year contract period be taken up with
the National Department of Transport, prior to completion of contract negotiations.
521.
2.4 In view of the draft phasing –in arrangements it is proposed that a way be found to allow
for an initial three year (interim) contract to be entered into, and that the sorting out of teething
problems during this initial three year period be used to inform contract negotiations for a 12
year contract period. The view from within the company B grouping is that the variables are
too many to quantify in a once- off contract negotiation. The representatives also feel that the
City may not have taken all variables and external factors that may impact on contract
negotiations into account, and that these issues will be internalized into contract negotiations,
thus increasing risk for the VO and City alike. (an example from the experience gained from
Jammie Shuttle operations were used to illustrate this point, where delays caused by road
construction compelled the operator to put more vehicles than contracted on the road during
peak hours for a sustained period of time. If further contract negotiations were disallowed the
contractors would have faced serious financial implications)
522.
2.5 The industry records its concerns about the ability of the IRT system to fully absorb all of
those involved in the current industry value chain, and asks that preferential procurement
arrangements in respect of the contracts to be put out on tender be confirmed so that industry
role players can be given sufficient time to prepare themselves for participation in these
contracts in the interest of safeguarding employment opportunities for existing staff
523.
2.6 The compensation proposals hold many challenges, one of the important issues that need
Comment on BP and City response Dft4.12 101008.doc
The National Land Transport Act provides that a contract can only be negotiated once, after
which the contract must go out to competitive tender. Legal opinion has indicated that the right
of first refusal in unconstitutional.
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to be resolved is how the value of current permits will be dealt with. This is particularly
problematic in view of the time frames imposed on indefinite and definite permits. Clarity must
be obtained on how permits will be valued at the time of making compensation calculations. It
is proposed that a minimum life span of 6 years be allocated to all affected permits and that a
date of valuation be fixed in order to provide certainty regarding the value contribution of
permits to compensation calculation
524.
2.7 The tax implications (if any) of the proposed compensation model for individuals and
businesses must be determined and explained.
525.
2.8 A further issues impacting on agreement with the compensation model is that the
application of the model has not yet been tested. Industry representatives feel that if survey
results were accurate and agreed to by now, it would have been possible to see (by means of
example) the implications of accepting the proposed compensation model. The lack of credible
survey results, coupled with uncertainty over how permit values will be calculated makes it
difficult for the industry reps to agree to the compensation model.
526.
2.9 The company B grouping further expressed concern about the total lack of consultation
about the City’s intent to award a further contract re inner city services to the operator who
was contracted to render 2010 world cup services. This matter was first brought to the
attention of the company B industry representatives at the information meeting held on 24
August 2010 and it is recorded that no consultation preceded this announcement. Company B
representatives wish to point to the fact that the City made it clear that any contracts that will
be awarded post world cup 2010 will fall within the ambit of the IRT contacting process, and
will be dealt with accordingly, meaning that the negotiation of any contracts after world cup
2010 will involve all parties affected by the introduction of IRT Phase1 (and by implication
phase 1 A with milestones as now proposed). Company B reps wish to stress that they will not
accept unilateral agreements on any service contracts beyond the world cup services.
The current proposal is to enter into an interim contract with Company B , subject to a
successful negotiation,for the provision of the Bayside Service until the full IRT contract is
implemented.
527.
2.10 The company B reps wish to express their concern about the City’s exclusion of future
operators in the decision on vehicle types, and that the City in spite of this exclusion expects
of the VO companies to assume responsibility for maintenance of the vehicles. Company B
reps urges the City not to proceed with further vehicle procurement processes without
involving the VO s in the process.
As before, the City will afford the company groups / VO companies in Phase 1A the opportunity
to influence the specs to be used in procuring buses for their use.
528.
2.11 With regard to the vehicle ownership options put forward in the business plan and the
preferred model outlined by the City company B reps wish to note that they will ask for
independent advice on the merits and de-merits of the option preferred by the City and if
necessary provide the City with a 5 th option
The City looks forward to further input on this model from the VOs. However, it expects to make
a decision regarding the preferred model (at least provisionally) through the adoption of the
Business Plan, which decision is expected in October 2010. To give adequate consideration of
alternatives it would be necessary for the City to receive such input from Company B by 27
September.
529.
2.12 Company B reps further expressed the need to obtain certainty on the City’s position
regarding cross-shareholding between the two VO company groupings as this matter is not
dealt with in the business plan, and holds significant implications for a number of company B
role players.
530.
2.13 Company B reps require certainty on the trunk share model underpinning this business
Comment on BP and City response Dft4.12 101008.doc
Representatives are responsible for informing themselves as the tax impacts, linked to their
individual tax status. The City will make available the information it has obtained at a generic
level.
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plan as it appears that the earlier principle of competition for 30% of trunk kilometres over and
above the equitably allocated trunk kilometres have fallen away. In line with this company B
representatives require clarity on the City’s position on the principle of competition between
the two VO s, and require clarity on whether or not the company B grouping will be
compensated (in the form of additional trunk kilometres) for agreeing not to participate in event
services.
531.
2.14 Company B reps wish to record that inputs made at a consultation session held on 5 July
2010 appear not to have been taken into consideration in the phasing –in proposals contained
in this draft of the business plan
System Planning unit will investigate and will respond accordingly.
532.
2.15 Company B reps therefore record that until such time as the City has properly consulted
on phasing –in arrangements, taken into account the implications of proposed phasing –in
arrangements on current business operations, and indicated how the payment of
compensation will be synchronized with the phasing –in of new operations and the phasing –
out of existing operations (including the scrapping of vehicles), the proposals contained in the
business plan cannot be regarded as final
The Business Plan is planned to be submitted to Council for approval in early October 2010.
Therefore it would be best if Company group provides the City with all factors it considers
relevant for it to make up its mind and to finalise the Business Plan – during the month of
Septmeber 2010.
533.
2.16 With regard to facilitating the readiness of the company B grouping to fully participate in
the planned roll- out of IRT services (starting with milestone 0) company B reps require the
City to give an undertaking that adequate and timely arrangements will be put in place to
ensure that the company B grouping is not in any way disadvantaged when it comes to
practical issues such as the resolution of outstanding permit applications, the completion of
market surveys and importantly the training of current owners and staff to function as drivers
and other operational personnel in the IRT project.
Noted.
Further comment from Du Noon Taxi Association on
MyCiTi Business Plan
534.
1. Goodwill payment should be made to taxi operators in addition to the proposed
compensation for “buy out” of business- the association submits that they have built the public
transport business in the Du Noon area to what it is today and that payment of goodwill to the
amount of R 1.2 m per member needs to be made separate to compensation for loss of
business
535.
2. The association submits that the cash payment for loss of business will be insufficient to
acquire a large enough stake in the VO company and that this will results in insufficient
dividend flows to shareholders in the VO company
536.
3. The association submits that the industry (via the VO company or other means) should be
“fully involved” in the Control Center Management Company, the Station Services (security
and cleaning) company, and the Fare Collection company.
Comment on BP and City response Dft4.12 101008.doc
The compensation policy proposed by the City in Annexure F constitutes such a “goodwill
payment”, since the basis upon which the City proposes to pay compensation is the proven
passengers moved by an individual operators times the fare, minus the average operational
costs.
It would be inappropriate for the VOC company to be directly involved in the control centre
management and the station services company, as there would be significant business conflicts
of interest created. The control centre company is responsible for vehicle tracking and the
station services company controls access to buses and collects revenue on behalf of the Fare
Collection company. There is however scope for the industry to be involved indirectly in the
station services contract provided the formation of the company that secures the contract is
separate from the VOC company – although the City’s approach is that this should be done
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through preference points for industry participation in tenders, and that these preference points
should prefer participants from the existing disadvantaged transport sectors.
537.
4. This point is further defined as at least 35% share in businesses that will arise as a result of
(IRT) operations and is further qualified as 15% in fare management and 15% in all other
businesses related to (IRT) operations
538.
5. With regard to the contract period the association submits that (a) a pilot period of 6 years
be agreed to (b) the negotiated contract only commence after the 6 year period, and (c) the
VO be given the right of first refusal in respect of renewal of contract after 12 years
The NLTA only allows contract to be negotiated once. A pilot project for 6 years in tantamount
to a negotiated contract and then to entire into a negotiated contract falls foul of the Act.
The Greater Cape Town Civic Alliance: Comment on
Business Plan
539.
The Greater Cape Town Civic Alliance (“GCTCA”) wishes to thank the City of Cape Town
(“CoCT”) for the opportunity to comment on the Business Plan of the Integrated Rapid Transit
System (IRT/ MyCiTi) Phase 1A.
A. Planning, time frames and costs of rollout per phase
540.
The GCTCA has noted with concern the disastrous attempt by the CoCT in drafting the budget
for the IRT/ MyCiTi system, where the projected capital costs were hopelessly underbudgeted. We have thus paid special attention to your budgeting and business model.
541.
We also note that management and planning of the IRT/ MyCiTi has been shambolic, with
plans changing constantly.
E.g.
1. First the IRT has been stopped, however the airport run is going to be kept open, at a
shocking user rate with a plethora of empty busses.
2. Then the IRT is going to come back on date 'x'
3. Then the IRT is not going down the West Coast Route.
The reasons for the initial under budgeting have been set out in the Annexure to the Business
Plan.
No project of this nature has ever been embarked upon by the City before. It is an extremely
complex project, containing many unpredictable variables. One of the merits of the IRT is its
ability to respond reasonably flexibly to changed or unexpected circumstances.
The plans for the West Coast route were never dropped, after the initial decision by Council to
locate Phase 1A there.
4. Then the planners intend changing the inner city route/costs.
5. And last but not least, the West Coast Route is back on the plans.
542. `
As can be imagined all of the above has resulted in much anxiety, frustration and lack of
confidence in the abilities of those spearheading the IRT/ MyCiTi project within the CoCT.
543.
We have scrutinised the Business Plan for Phase 1A and have noted that a provisional time
frame of between 15 years to 20 years is planned, where construction for the entire MyCiTi
network will be split into 4 phases. While we understand that this is the Business Plan for
phase 1A, it is not clear about the time frames and the estimated costs per the remaining
Comment on BP and City response Dft4.12 101008.doc
Correct, this Business Plan focuses on Phase 1a. Future phases will be reported in similar detail
in future.
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phases. We do however assume that the remaining phases will also have a detailed business
plan which will be open for public comment.
544.
545.
The timeframe of between 15 and 20 years, we not clear about, as budgeting and planning as
seen in Table 8 started in 2007/2008 while there is still no certainty of the costing. Under the
heading “9.2.1. Capital and implementation costs” it is stated “Table 8 and Table 9 show the
past, present and future estimated capital and implementation costs of Phase 1A”. From table
8 it seems that Phase 1A will be completed in 2014, where does Phase 1B begin and does
this mean that Phase 2 will only start after the completion of Phase1A & 1B, or will there be an
overlap in the implementation of the different phases?
The design of Phase 1B and its implementation will be dependent on lessons learnt in the initial
phase and availability of funds.
Table 8, shows that the Capital Cost of the Control Centre has been included in the budget;
however we cannot find a provision for the Capital and Operational cost for CCTV between
stations in the Business Plan.
There will be CCTV on the vehicles, along the bus lanes and at the stations.
546.
The GCTCA agrees with the concerns raised by The Cape Chamber of Commerce, regarding
the following issues:
547.
1. The financial plan (i.e. the city to sell the vehicles to a financial institution (FI), which will
lease the vehicles to the operators, while the city will invest the proceeds of the sale with the
FI, and pay the vehicle operators) will lead to huge costs and potential major financial losses.
548.
This financial plan is designed to capture tax depreciation benefits, while ensuring that the City
does not run the risk of losing the vehicle, should vehicle operators go bankrupt. The motivation
for the arrangement is set out in detail in the Annexures to the Business Plan
2. The plan to contract four other companies to:
a. Run the buses
b. Run the fares and ticketing system
c. Run the Fleet Management System
Please see Covering Statement (appears from page 5).
d. Maintain the bus stops and stations
is a co-ordination nightmare, and unlikely to succeed.
549.
3. Adverts for four service provider contracts in terms of a module that has not been approved.
550.
a. Due to this the GCTCA is concerned that the CoCT will simply ignore public comment as it
seems to have already made up its mind on which module it wishes to implement, while the
process is merely being undertaken to comply with the Municipal Finance Act.
No tender has been awarded as yet. The processes are intended to elicit arguments that might
result in a change of approach. However, no comments have been submitted that appear
sufficiently compelling to change the City’s envisaged approach.
551.
4. That the city intends to take over the running of all road based public transport.
Most operations will be run by private companies. The City intends to exercise strategic control
by means of a municipal entity. Please see Covering Statement.
Recommendation
552.
1. That a more accurate timeframe per phase, and if there will be any overlap in the
implementation of the different phases.
There are many variables, including availability of funds and experience of the initial phase,
which make the timeframe relating to subsequent phases somewhat unpredictable
553.
2. That the costs (Capital Budget) of rollout per phase be made available timeously going
forward while allowing for a longer time for public comment.
Noted.
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554.
3. That the CCTV operational costs be included as a separate item on the Projected
Operational budget.
The operational costs of camera surveillance is in the Control Centre contract as well as in the
annual operating budget of the City’s SSU branch based at the TMC.
555.
4. That the concerns of The Cape Town Chamber of Commerce be addressed.
Please see responses elsewhere in this document.
556.
5. That public transport should best be left to the private sector where the CoCT, merely
facilitates and provides day to day security and maintenance of the routes, which would be
much less of a financial burden on the CoCT and in turn on ratepayers.
The City intends most services to be performed by the private sector, but must exercise
strategic management over the whole system if there are to be constructive forms of
competition. Please see Covering Statement.
557.
6. The CoCT should facilitate the set-up of a public transport authority which would regulate
the private sectors involvement in public transport.
Transport Authorities are no longer provided for in legislation. The envisaged Municipal Entity is
the closest institutional form to such an authority.
B. Existing taxi and scheduled bus operators
558.
We have noted the CoCT’s intention is to include the existing minibus-taxi and scheduled bus
operators “as operators of the new system, providing opportunities for the economic
empowerment of informal service providers.”
559.
The GCTCA believes that any initiative to regulate the Taxi industry and bring Taxi operators
into the formal economy is a step in the right direction.
Noted
560.
The city’s objective to establish a single point of authority for transport is commendable. This
feeds into the belief of the GCTCA, that a city wide transport regulator/ authority independent
from the CoCT, be put in place sooner rather than later to allocate routes per operator and
regulate fares.
Noted
We acknowledge that besides the current legislation where existing operators cannot be
forced to give up their operating licences, taxi operators must be brought on board to avoid the
intimidation and violence seen in Johannesburg in early 2010 prior to the FIFA World Cup.
Noted
561.
Recommendations
562.
1. Operators should operate under strict conditions, such as maintaining the vehicles in a
roadworthy condition.
Agreed
563.
2. Yearly roadworthy tests should be undertaken.
Agreed
564.
3. MyCiTi drivers who are convicted of reckless driving and speeding should in addition to
paying a fine, have their licence initially suspended after a first offence and then revoked after
three violations if committed within 12 months.
These issues are being dealt with in the operating contracts.
4. That MyCiTi Operators be financially penalised for employing and using drivers who do not
have valid driver’s licence for the type of vehicle they operate and eventually have their
operation licence revoked for continued offences
Agreed
565.
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566.
5. Bus conductors must be used more widely, where their duties should include checking the
condition of MyCiTi buses, and drivers handling ability of the buses while in transit.
Bus conductors will be used while the fare system is being established. Other matters will be
monitored through appropriate systems.
567.
6. Single point of authority for transport; be initiated immediately and not later.
The City itself is becoming the single point of authority, with operations to be run through the
proposed municipal entity reporting to the city. The ME will be established as soon as the City is
more confident in its knowledge of the financial risks involved
C. Safety & Security, Metro Police and the Traffic Management
Centre
568.
The GCTCA is pleased that there is an emphasis on safety and security on the IRT system,
where the intention is to make the travelling experience crime free. We are however not quite
sure, how this is going to be accomplished, if it is at all financially viable.
569.
We note that while security on buses and at stations will be provided by the Station Services
contractor, and “The City’s Metro Police will undertake security outside the station precincts
and between stations, while Traffic Services will ensure against infringements of bus lanes
and station embayment’s.” and “The Specialised Services Unit will be responsible for
management of the CCTV camera system in stations and along bus-ways for both the trunk
services and feeder services, while the station services contractor will maintain communication
with surveillance personnel in the control centre where CCTV monitoring will take place.”
All such units are components of the City and the responsibilities that they have in connection
with MyCiTi will be formalised in service level agreements between the unit concerned and the
MyCiTi management unit.
570.
Our concern is further raised with the statement “CCTV installations must be consistent with
the specifications of the Cape Town Metropolitan Police”. Considering the size of the area that
the MyCiTi alone will be covering and the resource problems within the Cape Town
Metropolitan Police Department (CTMPD), relating to manpower while it favours and employs
the Proactive CCTV system (live surveillance), this proposal seems unworkable.
The meaning of the statement is that the CCTV technology under the MyCiTi IT project to be
installed by the Control Centre contractor will be entirely compatible with that installed by the
Specialised Services Unit (part of CTMPD) in other parts of Cape Town. Resources for
monitoring cameras in the TMC will be provided by MyCiTi management and they will function
under the direction and in co-ordination with the Specialised Services Unit.
571.
The proactive CCTV system requires two surveillance personnel (with replacement shifts) per
CCTV monitor, while the CoCT would not be able to roll out CCTV along bus-ways without
National Government’s financial help in the form of the Public Transport Infrastructure and
Systems Grant (PTISG). The PTISG however, is for Capital Expenditure only, and will thus not
cover the Operational Budget of an expanded proactive CCTV system.
The costs of managing the CCTV system for MyCiTi are indeed a cost to MyCiTi and part of the
overall operational budget of MyCiTi. Funds to cover a shortfall between total operational costs
and total income (fares and advertising) will comprise the subsidy required. This source of such
subsidy is likely to be covered by subsidy received from DOT supplemented by provisions made
by the City itself.
572.
While Proactive CCTV systems have been proven worldwide to be an effective crime
prevention and traffic management tool, the Reactive CCTV system (recorded surveillance) is
an internationally proven detection tool. Major metropolises such as London and New York
City use a combination of a proactive and reactive CCTV system.
The comment is noted. It is the intention that proactive CCTV will be exercised for surveillance
within stations and between stations, while CCTV on buses will be reactive and recorded
footage will be accessed to provide evidence of incidents.
573.
A recent seminar hosted by the CoCT and presented by Professor Rudolph Zinn (UNISA –
Head of Forensic Investigations) lamented the fact that at the moment South Africa’s major
problem was not the lack of visible policing, SA has one of the largest police forces in the
world, but is in fact the lack of crime detection abilities. Prof Zinn stated that crimes that most
people worry about included that which happens between leaving the home and arriving at a
destination.
Noted. The MyCiti project partially attempts to address this by providing security coverage at
and within a reasonable distance of trunk stations through the deployment of security personnel
at these stations and through system CCTV coverage.
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Recommendation
574.
1. That an expanded CCTV system be rolled-out to cover the entire MyCiTi system via the
PTSIG, which can later include rail and non-motorised transport.
All stations (internally and externally), the entire busway and cycle lanes between stations and
all buses will be fitted with CCTV as part of Phase 2 roll-out, and where gaps exist these can be
attended to during the operational phase. At present the only areas omitted from full CCTV
coverage are the feeder stations, which will be attended to where crime proves to be an issue.
575.
2. That the CCTV system be a combination of a Reactive (recorded surveillance) and
Proactive (live surveillance) and run the length of trunk and feeder routes.
Agreed. See response to comment in Item 574 above.
D. Environmentally friendly & responsible service
576.
1. Environmentally Friendly Vehicles:
577.
The use of a public transport system that will be “delivering a car-competitive service” and is
“environmentally responsible” feeds into the GCTCA’s vision of a sustainable environmentally
friendly society.
Noted
578.
The divergence away from the car based, congested transport system currently being
experienced, will make for a more efficient and environmentally friendly transport system. We
however have not come across, any detail, on this in the Business Plan.
Noted. This aspect should be addressed in the City’s Integrated Transport Plan with the IRT
system being a component thereof. The IRT Business Plan focuses on the implementation and
operation of a more efficient and environmentally friendly transport system!
579.
Various newspaper reports have stated that the buses used by MyCiTi compare favourably to
European emission standards, however we have to stress that these buses are not completely
carbon neutral.
580.
Optimal Energy is a Cape Town head-quartered sustainable energy developer that is planning
to mass produce an electric, solar powered hybrid vehicle called the Joule from 2012.
581.
While Ahi fambeni a hydrogen fuel cell powered motorbike has been designed by Hydrogen
SA Systems and recently made the pages of Engineering News.
582.
The three wheel hydrogen fuel cell motorbikes designed by Hydrogen SA Systems could
easily be modified to ferry commuters in Central Business Districts as a unique inner city form
of transport.
583.
The GCTCA is concerned that there is no mention of the phasing in, over time, of these
technologies being designed and manufactured in SA in the CoCT’s MyCiTi Business Plan.
The City is using low-emissions vehicles in the first phase, meeting Euro IV standards. Other
technology mentioned here is not sufficiently developed for the City to rely on it at this stage.
However, the City will keep track of such developments and incorporate such technology once it
is proven..
The current business plan focus on the implementation of phase A only and at this stage we
have adopted the best bus technology available to us at time of tender. (Alternate fuel systems
were called for but tenders were non-responsive in this regard). !
Recommendations
584.
1. We would suggest that the phasing in of locally manufactured and designed green energy
vehicles into the MyCiTi system, with clear timeframes as to when this will be done, be
Comment on BP and City response Dft4.12 101008.doc
See comment above. This goal is shared by the IRT Project Team.
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included in the Business Plan.
585.
2. City Improvement Corridors:
586.
At the moment the CoCT has employed a system of City Improvement Districts (“CID’s”) to
facilitate a safe environment to stimulate economic activity, while this is an honourable idea it
has an extremely small footprint within the CoCT. CID’s have thus not been an overwhelming
success in the regeneration of the urban and township landscape.
587.
This we believe is due to its financial model, where only those interested in the extra services
provided to CID’s have established these districts. The other being the convoluted process in
setting up CID’s have confused many within previously disadvantaged communities, where
one will find most of the decay taking place and where renewal and regeneration is
desperately required.
588.
The GCTCA is of the opinion that the IRT/ MyCiTi, is a great opportunity for the renewal and
regeneration of a much larger area or regions within CoCT than is currently covered by CID’s.
We envisage that public transport corridors could become City Improvement Corridors
(“CIC’s”), regenerating areas along the route.
589.
The investment in CIC’s via the IRT/ MyCiTi would stimulate investment from businesses
based along these routes, as clean and safe business environments will lead to interest from
commuters to explore these currently rundown thoroughfares.
590.
The beautification and greening of CIC’s should be high on the agenda. We suggest that
indigenous trees and flora of the Western Cape and Cape Town in particular such as, The
Cape ash (Ekebergia capensis), The Sweet thorn (Acacia karoo), the White pear (Apodytes
dimidiata), The False olive (Buddleja saligna), and The Sagewood (Buddleja salviifolia), to
name but a few, be planted along corridors.
The notion of City Improvement Corridors (rather than CIDs) is an interesting one.
In this regard the City is reviewing its overall investment strategies (all services) to capitalise on
the benefits of synergistic investment in these selected corridors.
Recommendation
591.
1. Public transport corridors should become City Improvement Corridors (“CIC’s”) where
economic activity revitalises decaying areas.
592.
2. That the corridors be beautified and greened with indigenous Western Cape and Cape
Town flora and trees.
See above
E. Funding and investment opportunities
593.
1. Advertising:
594.
Advertising on and in buses is an obvious source of funding, however we caution that
advertising should improve the overall travel experience, and not be an eye saw and a
dumping down of the service.
Comment on BP and City response Dft4.12 101008.doc
Agreed
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The most feasible way of introducing some form of congestion charge is to introduce a levy on
parking in designated areas. Most vehicles entering these areas need to be parked, so by
implementing a levy on parking spaces in a manner that its incidence falls on the vehicle user is
a possible way of implementing such a charge. This is simpler to administer and lest costly than
a congestion charge of the type suggested here. Parking charges for City-owned on- and offstreet parking within a few hundred metres of all IRT stations and stops are proposed.
595.
2. Congestion Charge:
596.
Major metropolises around the world, such as London and New York City have instituted
Congestion Charges on private vehicles entering the city to better manage congestion. The
GCTCA wishes to know if this is envisaged for the IRT/ MyCiTi network.
597.
If Congestion Charges are being planned the GCTCA’s requests to know when, where and
how this would, be phased into the IRT/ MyCiTi business plan. A further concern would be if
private vehicles would be charged each time they entered or drove through any of the Central
Business Districts such as Cape Town, Claremont, and Bellville etc?
598.
A Congestion Charge should negate the need for universal rates increases, or for the very
least, reduce rates on business and private residence along the IRT/ MyCiTi routes, that could
have their rates increased due to the investment.
599.
Motorists could be charged an entry fee into CBD’s, which are valid for an entire day. There
should also be a choice for motorists to purchase these entry fees on daily, weekly and
monthly basis to avoid inconvenience.
600.
3. Parking Charge:
601.
Revenue from parking is another option that CoCT is currently using within CBD’s. The
business plan has made provision for parking to be a revenue stream seen in point “9.6.8.
Parking revenues” pages 93 and 94, however we not sure if this is envisaged as a revenue
stream for the station service operator, or for the CoCT.
602.
The GCTCA is of the opinion that for the very least a percentage of the revenue from
dedicated IRT/ MyCiTi parking areas/ garages should accrue to the CoCT to offset the
operational costs that will be incurred.
603.
Funding and investment opportunities/ Recommendations
604.
4. Rates and Taxes:
605.
We suggest that a similar funding model to CID’s be applied to the public transport corridors,
which could be called City Improvement Corridors (“CIC”) where businesses, MyCiTi
operators, and to a lesser degree households based along the corridors, contribute directly to
the MyCiTi’s CCTV and Metro Police operational service.
Noted. See comment above
The investment in public transport corridors together with the improved CCTV coverage and
Metro Police patrols (as set out in the Business Plan) along these corridors will improve safety
and hopefully eradicate the grime that comes with the crime. This will create a friendly
environment and stimulate economic activity for businesses along these routes.
This proposal will be considered.
Where a commuter would not notice businesses in areas or along current public transport
corridors which are run down and crime riddled, a spruced up crime free and clean
environment will attract commuter interest and economic activity. Businesses situated on the
main trunk and feeder routes, could have their Rates increased, for the visibility and safety
This proposal will be considered.
606.
607.
Comment on BP and City response Dft4.12 101008.doc
Congestion charging costs a huge amount and is difficult to manage. Parking charges combined
with a fuel levy would be more efficient than congestion charging.
The idea is to use what revenue can be earned from parking to assist in paying for the system.
It is probably best affected by linking the income to the station services contract which will also
be responsible for managing the parking
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their businesses will receive from the MyCiTi, City Improvement Corridors.
608.
609.
The installation of Metro Police CCTV systems is estimated at between R60, 000.00 and
R285, 000.00 per camera. With the lesser amount coming into play when CCTV is mounted
on the walls of buildings instead of, on top of steel pylons/ towers which stretch high into the
sky. Businesses/ landlords could be offered discounts on their rates for having CCTV mounted
on the walls of buildings they occupy and/ or own.
This proposal will be considered.
Special dispensation on the increased rates should be offered to micro businesses, with
Turnover less than R250, 000.00pa and for private residence’s along the corridors with Total
Household Income below R150, 000.00pa
This proposal will be considered.
Funding and investment opportunities/ Recommendations
610.
Recommendation for the Funding Module of the IRT/ MyCiTi:
611.
The following could flow from the suggested, IRT/ ( MyCiTi) network;
612.
1) That a Congestion Charge be implemented where all private vehicles will be charged for
entering CBD’s, which will be valid for an entire day. The Congestion Charge should only be
implemented after MyCiTi network has been rolled out in its entirety.
613.
a) Special dispensation for pensioners with a Total Income below R150, 000.00pa
This type of issue will be considered with the implementation of any new revenue source.
614.
b) Special dispensation to indigents and for households with Total Income below
R150, 000.00pa
This type of issue will be considered with the implementation of any new revenue source.
See comment above for possible alternatives to this which would be more practical to
administer.
615.
2) MyCiTi operators to contribute to the operational costs (including CCTV and additional
Metro Police staff) by being charged an annual fee for the routes they operate.
It does not make sense to pay the operators and then make them return some of the payment
on this basis.
616.
3) That a percentage of the revenue from dedicated IRT/ MyCiTi parking areas/ garages
should accrue to the CoCT to offset the operational costs that will be incurred.
This is being investigated.
617.
4) Increase the rates of businesses along MyCiTi trunk and feeder routes due to
improvements in safety and the clampdown on grime, which in turn would facilitate improved
economic activity.
Rates will automatically increase if property values rise as a result of the implementation of the
system.
618.
a) Special rates dispensation for micro businesses with Turnover less than R250,
000.00pa, who are situated on trunk and feeder routes.
619.
b) Special Rates dispensation to indigents and for households with total income
below R150, 000.00pa
620.
c) Special Rates dispensation for pensioners with a total income below R150,
000.00pa
621.
5) Discounts on Rates, to landlords and businesses who allow CCTV cameras to be mounted
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This type of issue will be considered with the implementation of any new revenue source.
This could be considered where beneficial to the system. However, mostly there are sufficient
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622.
Comments
City response
on the buildings they own along MyCiTi trunk and feeder routes.
locations for such cameras on City property.
6) Free day-passes on the IRT/ MyCiTi network for commuters who fall in the following
categories
Various transit products are being investigated to reduce cost of travel under certain
circumstances. Please note that special fares for scholars, pensioners and the unemployed
require additional staff to verify whether the user is the original owner of the card. Other tran
sport products are being investigated.
623.
a) Pensioners on presentation of Pension cards
624.
b) The unemployed on presentation of unemployment cards.
625.
Provincial Department of Transport
626.
This letter provides a synopsis of comments and / or questions that have been raised by the
Minister responsible for Transport in the Western Cape, the Public Transport component and
the Strategy, Planning and Co-ordination component of the Department.
Noted.
627.
Comments have been captured based upon the sections in the Business Plan document. It
must be noted that some questions may be duplications of those posed to the City of Cape
Town in the joint response from the Department and the Provincial Treasury on the MFMA
Section 33 process.
See page 110 for the Province’s comment on the s33 information document.**
628.
[p 7, Final para] BRT is certainly not seen as the most appropriate response in low-density
cities, when the basis for BRT is about moving high volumes of people with high speeds.
See paragraphs 28 to 37 of Covering Statement above
629.
This statement is contradicted on page 11, final paragraph, where it states that the operating
deficit is driven by the long travel distances and dispersed urban form – surely this should not
be used as an excuse for the operating deficit given that “BRT is the most appropriate
response for low-density areas”?
As indicated in paragraph 69 of the Covering Statement the extension of the route as far as
Atlantis presents particular problems. These problems are not as severe for the route as far as
the end of the continuous built up area. The main issue about Atlantis is not one of density but
rather the long travelling distance with no boarding and alighting activity for 20+ km’s. There is
an argument that the Atlantis extension should be provided by a feeder route which connects to
a trunk running as far as Blaauwberg; however this may not save significant costs and will add
to customer inconveniences. Certainly running a rail service to Atlantis as suggested by the
province would result in very significant operating costs and poor service levels arising from the
fact that rail is substantially less suitable than BRT for running in such urban forms.
630.
[p 9, par 2.5] Sequencing is to be done on the basis of servicing lucrative routes. If this
statement is to be taken as correct, why is Phase 1A being rolled out, when it is later shown in
the business plan not to be lucrative, but to run at an operational deficit.
The actual wording in the Business Plan refers to the roll-out after Phase 1A and reads as
follows: ‘The sequencing of the roll-out is subject to discussion and will depend to some degree
on the need to serve more lucrative routes first in order to establish a financial base for
extending to less lucrative routes.’
Thus this is one of the considerations, not the only one as implied by the manner in which this
has been misquoted. Phase 1A was selected because in the initial section of the route there is
substantial congestion, there is no rail service, and the industry transition challenges are more
manageable. Atlantis is much the most distant settlement of the metropolitan area, and thus
presents peculiar problems; however if servicing the west coast it is problematic not to extend to
Atlantis.
631.
It must be further noted that public transport’s business from a government perspective is not
about making money ie it is about providing a service to the public. The roll-out should be
Comment on BP and City response Dft4.12 101008.doc
The City would be delighted if it were able to plan and implement the MyCiTi system purely on
the basis of customer needs; however this needs to be balanced by attention to financial
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632.
Comments
City response
based upon customer need and not about whether the City can make money.
constraints.
[p 11, 3rd para] The fact that the elements other than vehicle operation cannot be covered by
fare revenue is noted. Originally IRT was supported on the basis that only investment in the
capital elements was required (ie infrastructure) and the operation of the entire system would
be financed from the revenue from the operations. This is no longer the case and surely
questions the entire basis upon which IRT has been proposed. Furthermore, the fact that all
other elements of the system (including it is surmised the ongoing operational costs of such
systems) cannot be covered by the revenue make the initial statement of IRT being financially
viable and sustainable even more questionable.
At a very early stage it was believed that the system could run without operating deficit. But it
soon became clear that this would not be possible. This does not, however, bring into doubt the
entire basis upon which IRT has been proposed. Modelling indicates that when rolled out over
the whole city it would require a net operating subsidy more or less equivalent to the current bus
system it would replace. However, with its dedicated trunk routes and reasonable off-peak
frequencies it will provide a much higher level of service than currently provided. By making the
additional capital investment it is possible to place public transport in the city on a far better
footing, with the same ongoing operating subsidy.
In this regard the City is implementing a national vision, which national government is funding
almost entirely through grants.
633.
It is still unclear and not sufficiently motivated why the City is buying new vehicles and not the
operator.
This is required because of the deficit in the initial Phase 1A. Modelling indicates that by
following up Phase 1A with more lucrative routes, running, for example, between the south east
and Montague gardens the system operating deficit will fall and new buses will be able to be
funded by operators and not out of a once-off capital subsidy
634.
[p 17] Again, at no point in the business plan does the City note that the original approval
given to move forward with implementation of the IRT was on the basis of zero operational
subsidy. This should be stated and reconfirmed that this is no longer the case and therefore
the sustainability of IRT as a solution to improving public transport (given the huge investment
in the system to move relatively lower passengers numbers compared to rail) should be
debated fully.
Please see response to paragraph 632 above. While the existing rail system must be exploited
to its full, implementing rail would not be feasible on most of the routes that it is envisaged to run
BRT. The urban fabric simply would not allow it there unless there was massive expropriation of
property, which would result in costs many times that of BRT, which is able to insert itself into
the road network. As explained in the Covering Statement (appears from page 5) the fact that
BRT functions with smaller vehicles than trains makes it far better able to serve low off-peak
frequencies than rail. On the other hand systems elsewhere in the world have shown an ability
to convey very substantial volumes if required – comparable with some rail systems.
635.
[p 19, par 4.1.3] The paragraph relating to fares seems to imply that they are applicable across
the metro for all public transport services in the IRT and not just Phase 1a. Have the fares
been approved by Council after following due process?
This is an incorrect reading of the Business Plan. The proposed fare structure is only applicable
to road based element of the IRT. The fares relating to BRT have followed due process in terms
of the City’s tariff policies and relevant legislation
636.
How do the fares compare with existing bus, rail and taxi fares?
Please see paragraph 64 of the Covering Statement. There are no rail fares in the area of
Phase 1A to compare with, although generally 3rd class rail fares are low. An essential criterion
for the IRT fare structure is compare accordingly with the existing services. Transport products
are currently being investigated to further ensure that customers are not financially
disadvantaged.
637.
Why did the Inner City service cost R8 during the World Cup, when the proposal for feeder
services is for R5?
There was an agreement not to compete with existing minibus taxi services and it was assumed
that because the service was aimed in particular at visitors, and attendees of the matches this
would be affordable. Current taxi’s services are around R5.
638.
[p 19, par 4.2.1] Figure 3 is not helpful and provides little to no detail for the reader. The
paragraph mentions the remainder of Phase 1 to be implemented by 2015, but does not
outline what the remainder is – this is only captured later in the document.
As indicated by the comment, these issues are dealt with later in the document. Figure 3 is
useful in that it includes the current rail routes, demonstrating the fact that the BRT trunk routes
run on corridors not served by rail. The importance of this is emphasised in Para 2.3 of the
Business Plan.
639.
[p 19, Final para] The statement that there is “no rail service” is misleading. It should be
expressly stated that there are railway tracks, but no trains operating on the lines.
The rail tracks are a goods line running to Atlantis which would require very substantial
investment to turn them into a passenger service. Moreover this line runs well to the east of
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Century City and thus to the current areas of substantially increasing congestion.
640.
The business plan is silent on the cost comparison of implementing Ph1a (and even the whole
of Ph1) versus putting in place a rail service. The cost comparison at this stage in the project
(with a cost of over R4bn) versus what it was at the start of the project could lead one to a very
different result in terms of investment of public funds.
Please see footnote to paragraph 36 of the Covering Statement as well as the response to the
paragraph above
641.
No mention is made of the operational subsidy cost per passenger for the rail service versus
the operational subsidy cost on the IRT. Again it must be noted that at the onset of the IRT
project it was stated that no operational subsidy would be required, making the IRT solution
more attractive than a rail solution.
Nationally the operating subsidy for the metrorail service is R3.155 billion in 2010/11. Given that
metrorail is run on a national basis figures are not available for the Cape Town area;
nevertheless, since Cape Town represents a substantial portion of the suburban rail service
nationally it can be surmised that a high proportion of this figure is allocated to Cape Town.
Despite these levels of subsidy the metrorail service levels are widely regarded as poor. For
nearly three years no claim has been made that the BRT will run without operating subsidies,
and this claim is certainly not made in the Business Plan. The issue is how the required subsidy
compares with other modes taking into account levels of service.
642.
If it is assumed that no further funds are made available for future IRT roll-out in the City of
Cape Town, what would be the ongoing operational costs of the IRT system for Phase 1A
(having spent over R4bn) versus having invested over R4bn in the rail system in the entire
metropolitan area and the resultant improvement in a greater number of people’s lives than
with Phase 1A?
If no BRT service was being implemented up the west coast growth in that area would be
severely constrained. Furthermore, the funding of rail and BRT are done through two entirely
different funding streams by national government. The City applied for capital funding for BRT
implementation from national government and was awarded the funding on the basis that the
proposed system was in line with national policy. There is no reason to believe that had the City
not applied to national government for this funding it would have decided to use the money
instead on improving the city’s rail system.
643.
[p 20, 2nd para] The statement is made that the “second phase WILL BE developed in the
highest public transport demand areas”. This is contrary to the statement on page 9 where is
states “the sequencing of the roll-out is subject to discussion and will depend on some degree
on the need to serve more lucrative routes first”.
There is no contradiction here at all; the highest demand corridors are likely to be the most
lucrative routes.
644.
[p 21, 1st para] When referring to operational deficit, a maximum amount for the deficit cannot
be considered to be “conservative” – it should be pessimistic.
This paragraph was attempting to indicate that modelling was done on the basis of conservative
estimates of ridership. The term ‘pessimistic’ is used later in the document
645.
[p 25, 4.2.4]To what extent has the City included the take up of rail in the modal split in the
EMME/3 model? To what extent have different scenarios been modeled ie originally
implementing a rail service versus a road based service? What is the sensitivity analysis
undertaken to test improvements in the rail system in comparison to the IRT system?
Rail was considered in the modelling process. Although a economic evaluation of road vs rail
was not completed, it is extensively documented that the capital cost (upgrading to passenger
line + rolling stock) and operational cost far exceeds the road based solution. Projected demand
up the west coast will not generate sufficient income to match these rail operational costs.
646.
[p 31, para 4.3.2] Surely the City would have wanted the WC2010 service to compete with
others, especially as it was being marketed (albeit rather limited) as the service to be utilized
by Capetonians and others during and after the event.
Normally this would have been the case. However this would have led to substantial resistance
from the minibus taxi industry and could have led to disruptions. The commitment of the city was
to provide services required for the World Cup in line with FIFA requirements in a manner that
did not compete with existing services
647.
No statements are made around operational challenges experienced and lessons learnt in this
regard.
Noted
648.
[p 35, Milestone 5] How important is Du Noon in the plan?
649.
It is assumed that it is a vitally important link, given that many people are located in Du Noon.
How does the fact that it is only implemented in 2012/13 (if national funding is provided) affect
Du Noon is an essential component of Phase 1a. The reason it was pushed to a later milestone
was as result of cash flow assessment. The Du Noon trunk requires significant investment along
Blaauwberg and Potsdam Road.
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the viability of the system?
Recently, our technical team is pursuing accelerating the Du Noon trunk because of operational
benefits. The original rationale for prioritising Atlantis was that this could be built for relatively
low capital cost (with the result that the City could afford the capital works earlier in the project)
– although high operating cost. Given the increased commitment from national government to
capital costs, the City is considering bringing Du Noon forward.
650.
Should the Du Noon link be a feeder service rather than trunk route to Bayside?
Current congestion levels along Blaauwberg and Potsdam warrants the need for dedicated
lanes to ensure travel advantage. Future demand along the Potsdam and Blaauwberg corridor
suggests trunk operations
651.
[p 46, para 5.4 Re staggered stations in narrow roadways] The statement that “additional
investment is FAR outweighed by the operational benefits over the life of the asset” should be
quantified to provide the necessary substantiation rather than such a broad statement.
If there were no staggered stations in places where there were no adjacent general traffic lanes,
there would be no passing lane, which would make express bus services and the rapid passage
of emergency vehicles impossible. In Phase 1, only 4 off-set or staggered stations have been
planned and built.
652.
[p 47, para 5.6] Given the statement that the lock-up facilities for bicycles will be placed in view
of the station – who secures the lock-up area and ensures that no bicycles are tampered with?
This is intended to fall under the station services contract, initially at main stations, but
eventually at all manned stations.
653.
[p 47, para 5.7] It is the strong opinion of the Department that the City should not be procuring
hardware, software, etc but outsourcing the service to a private party.
The City will be engaging with the province in an attempt to understand the true basis of the
provincial concern here. The City is largely outsourcing this task on a six year contract. Most of
the hardware costs are for the turnstiles etc on the stations
654.
The questions previously posed by the Department should be taken as read with this section
(in terms of the Section 33 process).
See page 131 for the Province’s comment on the s33 information document, and the City
responses.
655.
Furthermore, given the substantial timeline indicated for delivery of the IRT system (ie 15 to 20
years) is it appropriate to spend public funds on technology which will be outdated within the
time period contemplated to roll-out the system (assuming the same level of funding is
received from national government as over the last few years). If the system and service
provision is outsourced, the requirement to remain up to date with technological advances and
the risks associated, remain the responsibility of the private sector and not the City of Cape
Town.
The City will be engaging with the province in an attempt to understand the true basis of the
provincial concern here. The City is largely outsourcing this task on a six year contract. Most of
the hardware costs are for the turnstiles etc on the stations
656.
What happens if no further phases are rolled out of the IRT? Why has the City opted to
purchase ITS systems at vast cost for a very small and not complex service?
The fare system is crucial to developing a fare structure that will allow, for example, a
sophisticated differentiation between peak and off peak. This will have significant financial
implications over the long term even if the system is restricted to Phase 1A. The fare system
being procured is consistent with DoT standards and new banking technology where the back
office for the fare system will be handled largely by the banks and is thus cheaper than fare
systems without these capabilities.
657.
[p 4, Final para] The provision of CCTV cameras on vehicles is supported. Clarity is
requested on the extent to which the City has engaged with the relevant stakeholders to be
able to use camera footage retrieved from the vehicle, as evidence in a court case.
The system is set up in such a manner as to facilitate for such footage to be downloaded from
the vehicle within a period of three days.
658.
[p 53, 5th para] The issue of disposal of assets and the process required to be followed in
terms of the MFMA still requires clarity from the City.
Subsequent to the Annexure C to the Business Plan and the Information Statements made
public describe the basis and reasons for this in detail
659.
[p 54, 6.2.3 1st para] Clarity is required in terms of the statement of “the contract will give nonexclusive rights”. Does this mean that other passenger-carrying companies will be granted
No. It means that more than one of the contracted BRT companies can run a single BRT route.
This greatly enhances the flexibility and efficiency of the system in a manner not able to be
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rights to transport passengers on these routes?
City response
supported by what appears to be the provinces preferred approach
660.
[p 54, 6.2.3 2nd para]
661.
In relation to the services which do not run in competition, but intersect with the MyCiTi routes.
Will licence renewal applications be supported by the City of Cape Town? If not, what will
happen to these operators?
Vehicles serving a different market will be allowed to continue even if they intersect with BRT
routes. However, they will not be permitted to use the BRT exclusive lanes.
662.
[p 54, 6.3.4 3rd para] If the VO’s are not required to pay for the use of the depots, and are not
responsible for long-term maintenance, there is no incentive to ensure that the facilities are
kept at a particular standard. The VO will not feel the need to ensure proper care of the
facilities it utilizes.
They will be required to do short term maintenance
663.
How will the City assist the VO in getting economies of scale in terms of maintenance, fuel,
parts, etc?
International experience indicates that the size of the fleet intended to be owned by each of the
two Phase 1A operators is an efficient one. However there will be diseconomies while the
service is still being phased in and is thus relatively small.
664.
[p 55, 2nd para] What is meant by “insurance of the vehicles may be managed in terms of a
tripartite agreement between the city, financial institution and VOs”?
The tripartite agreement refers to the set of five agreements between the City, the VO’s and the
financial institutions. How insurance is addressed will form part of this set of agreements
665.
[p 55, 6th para] Clarify how the VO can be responsible to take steps for fare evasion, but a
separate contract is in place with the City for station security and management? How will the
fare evasion be costed into the model if so many people are responsible to prevent it?
The fare evasion that the VO’s are responsible to avoid is when boarding feeder vehicles. The
station security is not responsible at feeder stops
666.
[p 60] How many different management units and entities are to be involved in the running of
this service and the various contracts?
The municipal entity (or prior to establishment – the internal department) will contract three sets
of operators plus the VO companies
667.
[p 65, para 7.1] The quotation from the NLTA refers to liaison with neighbouring municipalities.
The degree to which this has been done is not stated in the business plan.
668.
The City’s strategic objective is to “establish a single point of authority for transport”.
However, at no point in the business plan is this objective articulated in such a manner as to
be achievable. There are likely to be so many contracts in place and the City will divorce
responsibilities it currently holds to a separate entity that the objective of “a single point of
authority” will not be achieved. Non-delivery from a service perspective is likely to be passed
from one unit to another, from one organization to another which by no means supports the
achievement of said objective.
669.
This is further emphasized in the section detailing the responsibilities between the City and the
ME.
670.
The areas which the City will manage should expressly include rail and not hide the issue in
the context of IRT (which has generally been taken up into the document to imply road-based
systems).
The City cannot take responsibility for rail until national legislation is changed. The province is
surely aware of this.
671.
[p 67, 2nd para – 1st bullet] Clarify the need to “focus on balancing the pressures”.
Desire to run an ever higher quality of service will always have to be balanced with budget
pressures
Comment on BP and City response Dft4.12 101008.doc
There is a difference between teh authority and firms employed by the authority to implement
the tasks. The crucial issue here is the confused dispersal of authority across national (eg
Metrorail), provincial (eg Golden Arrow) and the City governments. The new NLTA works
towards having a single point of authority in the metros – which is metro government. The city
is in support of this national policy and legislation. The scepticism embodied in this comment
confuses authority with implementation under the direction of the authority and would appear to
preclude any form of outsourcing.
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nd
672.
[pg 67, 2 para – 2 bullet] Explain what is meant by the statement that the unit must be run
on “principles of optimizing customer service, within available budget”
Customer service must be as good as possible (optimised) but cannot cost more than the
available financial resources
673.
[p 68, para 7.4]An advisory board is to be established as a precursor to the ME board, with no
decision-making powers. It should be confirmed that the City of Cape Town (Council?
Department?) takes the final decisions.
If the advisory board does not have decision making powers it follows that these lie with the City
674.
[p 69, 1st para] ME Board – surely the City should consider including surrounding
municipalities on the Board, given that services in transport (especially rail and road based)
move beyond the municipal boundaries?
The city will consider this. However, the extent to which the service will run outside of municipal
boundaries is extremely limited initially
675.
[p 69, 2nd para] The City (ultimately the Council) should give the instruction to reduce the
provision of services, not the ME.
The ME will act within the terms of a service delivery agreement with the city and will issue the
instructions to the service providers contracted by it.
676.
Surely the City cannot allocate “revenue”, but funds?
This is accepted terminology
677.
[p 69, 4th para] No mention is made of the role of the ME as an advisory one
The advisory role is an interim one. This paragraph deals with the long term approach
678.
[p 69, 7th para] The purpose of the business plan should be to define the respective
responsibilities of the ME and the City. The statement that “though the ME should have the
capacity to plan and model in detail, subject to the City’s overall parameters, the respective
responsibilities WILL be defined to avoid duplication of resources” should not be made in the
document where such definition should be taking place.
Such definition will take place in a detailed service delivery agreement. This Business Plan
deals with the broad approach and principles; not every detailed agreement
679.
[p 69, Final para] The statement that the “ME will need to constantly tailor services through its
scheduling and controlling functions so as to maximize revenues and minimize costs” is not
agreed to. It should be stated as follows: the ME will need to constantly tailor services through
its scheduling and controlling functions so as to fulfill the requirement of providing public
transport services, that maximize revenues and minimize costs.
The wording suggested by the province here is less clear. This appears to be a trivial semantic
point
680.
[p 76, Figure 15] How does the City intend to move towards the structure shown? Will it start
with this structure or progress in phases towards it?
681.
How does this structure compare with other scheduled bus operations management structures
internationally and locally?
682.
Who is the international specialist consultant reporting to the ED:TRAMP?
The organogram makes provision for this. Currently there are a large number of international
specialists available to the City through the Business Plan contract
683.
[p 77, 9.1, 3rd para] Clarify the statement that the full subsidy allocation currently received for
“public transport subsidies” must be allocated solely to the City of Cape Town.
Regulations issued in terms of the NLTA require that where a new municipally governed service
replaces a service currently receiving subsidies these subsidies are shifted to the new service
provider
684.
[p 78, Table 8] The table does not provide an indication of capital versus operating
expenditure.
As indicated, the table shows once-off costs. These are all able to be funded by PTISG. Some
of the once off costs are classified technically as ‘operating costs’ but this is not as significant as
the fact that they are all once-off costs rather than annually recurrent costs
685.
What is the R174 contingency allocated for – especially that there is only a contingency
It is difficult to predict when contingency will be required. The contingency has been placed in
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allocation in the 12/13 financial year and in no others?
that year as a part of the approach to the phasing of available funds. Virementing between
years will be feasible
686.
[p 85, Table 12] The headings of “optimistic” and “pessimistic” are incorrect in relation to
system payments – surely the optimistic perspective is to pay less, not more to the operators,
while the converse is also true?
No. Under the pessimistic scenario where income is much lower services will have to be cut
back and payments to the operators will be lower. However the deficit is higher even though the
costs are lower – hence ‘pessimistic’
687.
[p 85, 2nd para] The statement that the cost of the vehicles is not included as they are being
paid for through the PTISG is not consistent as most of the infrastructure (ie capital costs) is
paid for through the PTISG – the base principles applied should be consistent.
The meaning of this comment is unclear
688.
[p 87, Table 15] It is noted that with the PTISG allocation of R4bn, approximately 40 trainsets
could have been purchased, increasing the metropolitan rail network’s capacity by almost 50
percent.
We are not entirely convinced that this estimate is correct. But it should anyway be noted that
funding of rail is through PRASA and is completely separate from funding of BRT which is
through the PTISG. Because of the current fragmentation of authority across spheres of
government the city is not called upon to make this trade-off; it applies to national DoT for funds
for the services for which it is responsible. Had the City not applied for PTISG funds for BRT this
would not have meant that they are available for rail.
689.
[p 89, Table 16] It is noted that the City of Cape Town is not funding any capex from 2010/11
to 2013/14.
The City’s contribution has been in the earlier years prior to availability of funding from other
sources
690.
[p 91, 2nd para] What research has been undertaken to inform the roll-out of future phases ie
what interaction and deliberation has taken place with the City’s customers?
Relatively little interaction has been undertaken. The Business Plan represents a proposal
which will be further investigated. It is assumed that some stakeholders may raise the issue
when commenting on the Business Plan
691.
[p 92, Table 18] How much has already been spent on planning for Phase 1A (since the start
of the project) and on what is the R100m for planning for further system expansion based? Is
this allocation to cover the entire metropolitan area, or only the next phase?
The total amount of professional fees committed to date amounts to some R 295 which includes
design and construction supervision fees. Actual expenditure amounts to some 70 % of this
amount. This amount includes planning fees (operational and business planning ) amounting to
+/- R 76m.
The R100m is a provisional allocation for professional fees to commence the detailed planning
of phase 2. By necessity planning of some of the full phase elements will be required, but
implementation will be staged .
The R100 million is based on a the provisional fee estimates that will enable planning and
design to commence to enable expected allocations to be spent within the yaer allocated.
692.
[p 92, para 9.6.5] With respect to the statement that the PTOG should, in terms of Regulation
877, be made available to the City “for funding the network contract”, it is noted that on page
11 of the business plan that “vehicle operations can be covered by fare revenues”, while “other
elements, … , require funding from other sources”. As a result, the operational deficit
projected by the City is NOT for “funding the network contract” and as a result should not be
made available to the municipality in terms of Regulation 877.
This is semantics; funds are fungible. It is stated this way in order to indicate that fare revenue is
sufficient to cover vehicle operations. However, the actual cash could as easily be deemed to be
paying for the ‘other elements’ thus leaving the subsidy to pay for the VO costs
693.
[p 93, Table 19] It is noted that there is no proposed rates increase for the duration of 2010/11
to 2013/14, albeit that operating costs will escalate for the system.
The figures are presented in real terms.
694.
[p 94, 9.8.1 - 2nd para] The statement that the national department has confirmed that PTISG
can be drawn on to assist in covering operating deficit is concerning. Previously statements
were made that infrastructure and other contracts will be awarded on the basis that funds are
The possible use of PTISG funds for this purpose is a risk management provision. In the
unlikely event it transpires it will, in deed, restrict capital spending.
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available through the PTISG. How can the City then use those funds when they are
committed for other projects?
695.
[p 98] How does the City intend including the SMME bus operators in the IRT process?
696.
[p 102, Table 24] It is assumed that this market share is for Phase 1A only.
Yes
697.
The fare revenue appears distorted, as the fare revenue for GABS and Sibanye does not
appear to take account of subsidy payments to these operators. As a result, this may not be
the most appropriate basis upon which to calculate market share.
It does indeed not take account of subsidies. It is viewed as unacceptable that GABS and
Sibanye should received a higher share when they have only achieved this on the basis of
subsidies not available to the minibus taxi industry
698.
[p 102, Final para] Has the recapitalization programme actually got the money available to
provide for the scrapping as indicated.
Although the aim is to achieve some of the objectives of the recapitalisation programme, the
administrative process to be followed is not the same as that of the recapitalisation programme
and therefore funding will be sourced from the IRT project, not the recap programme.
699.
[p 103, 1st line] The statement that “When operators have newer vehicles, they are
encouraged to sell their vehicles and buy an older licenced vehicle for scrapping” is
concerning and could be construed as the City supporting operators to sell their vehicles at a
high price, buy an old one for a low amount and make R55,000 through the scrapping
process, which could be considered to be fraud (defined as “the unlawful and intentional
making of a misrepresentation resulting in actual or potential prejudice to another [Oxford
Dictionary]) and abuse (defined as the “departure from correct, legal, proper, reasonable use;
misuse” [Business Dictionary]).
The scrapping allowance of R55,000 is in line with the National Taxi Recap (NTR) allowance
where the allowance is fixed irrespective of the actual value of the vehicle. The aim is to assist
in getting rid of the oldest and least roadworthy vehicles currently used as taxis with valid
operating licences. If what is proposed is seen as fraud then the NTR programme may also be
considered as allowing fraud by paying R55,000 for a vehicle that could be worth R25,000.
700.
Further, an operator’s OL is linked to the vehicle. If the newer vehicle is sold the operator will
be required to change all details on the OL to the older vehicle and then hand in the OL when
the vehicle is scrapped. Additional burden will be placed on the POLB/PRE/MRE (whichever
is in place) for no purpose whatsoever and supporting such a process could be construed as
supporting the wasting of public funds.
Since this scrapping process is not to be administered as part of the NTR programme, a
simplified system would be developed, in consultation with the POLB, to facilitate the selling and
scrapping of these vehicles.
701.
Overall comments
The business plan does not contain a risk matrix with proposed mitigation strategies,
especially on the funding issues.
702.
There is no detailed costing included in the business plan – even as an Annexure.
Further costing detail does not need to be included in a Business Plan. Some detail has been
deliberately disguised in order that tendering processes not be compromised
703.
The timespans are enormous and the assumption that the national government will continue to
fund the infrastructure and planning at the level which they have in the past may be
problematic.
In DORA it is stated that the PTISG will remain in existence at least till 2020. It is recognised
that these assumptions may not be correct, but they are reasonable based on the best current
and available evidence. In the Business Plan the City indicates it prefers funding to be through
an own revenue source so that the City can make its own choices not subject to national whim
over the long term.
704.
Limited information is provided on the lessons learnt from the World Cup services and
interventions, especially the Inner City and Airport shuttles.
Noted. The Business Plan was completed prior to the end of the World Cup services
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705.
What is the status of public participation with the business plan? Will the comments of the
public and organizations make any impact on the City’s intention to move forward, given that
the bulk of the funding is from the national sphere of government?
The City is considering all comments and where they appear to be valid will investigate further
and make adjustments if required.
706.
To what extent has the City had detailed interactions with its customers for the services being
designed?
Customer modelling has been based on detailed surveys. Focus groups were held on certain
issues
707.
Is it the City’s intention to table the Business Plan at the PTIC for endorsement?
708.
National Department of Transport
709.
Evaluation overview
710.
The National Department of Transport (DoT) has conducted this review of the Business Plan
for the City of Cape Town’s MyCiTi system in order to inform the decision making process
regarding the City’s request for funding through the Public Transport Infrastructure Systems
Grant (PTISG). In particular, the comments reflect the extent to which the City’s plans are
aligned to the national strategy regarding Integrated Rapid Public Transport Networks
(IRPTN).
711.
This document is intended to also serve as a further discussion instrument for negotiations
between the City of Cape Town (CoCT) and the DoT.
712.
Overall, the MyCiTi Business Plan is well constructed and detailed. The plan in many
respects can serve as an example for other South African cities. This review has,
however, noted several areas where further discussion and clarification will be useful.
713.
DoT has separately evaluated the initial services of MyCiTi. These observations are provided
in a separate document.
714.
On 1 July 2010, DoT issued the “Guidelines and Requirements” regarding PTIS applications.
There are aspects of the guidelines that are of particular importance to the CoCT. These
aspects include:
Noted
No such document has as yet been received from DOT.
715.
o
PTISG funds are to be only applied to IRPTN investments; other investment requests,
such as for minibus taxi ranks and interchanges, must be sought through alternative
means;
*The City would like to engage more with DOT about this requirement – ie, it is proposed that
spending on public transport / NMT-related infrastructure elsewhere in the City where this will
match / align / support future IRT networks, such components of IRPTNs should be possible
through PTISG.
716.
o
Opening IRPTN phases without fully-functioning fare and ITS systems is strongly
discouraged;
See item 886 below.
717.
o
Opening phases without all relevant feeder services is also strongly discouraged; and
See 756 below.
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718.
Comments
o
The system should meet financial sustainability by July 2012.
City response
*It is not clear what this means. If it means that the system income should cover all of the
system costs, including institutional costs, then this is not possible. Even, if it means that all the
VO-related costs must be covered by the fares, this is unlikely to hold true – as set out in
Chapter 9 of the Business Plan. The PTISG framework conditions raises a broader concept of
sustainability, namely covering VO-related costs once the full system is in place. In this respect
the City is clear that this is achievable.
719.
Also from now on, cities must submit all plans and tenders to DoT for evaluation. DoT is also
developing a national IRPTN information database that will include all previous plans, TORs,
and tender documents related to IRPTN systems. This information will be shared with all
cities to help facilitate the exchange of lessons learned and best practice.
All contract information was supplied as part of the s33 process, and can be downloaded from
www.capetown.gov.za/irt, then click on “Public participation” and then on “Long term contracts”.
720.
It should be noted that some information requested by DoT from the City of Cape Town, dating
back to requests as early as September 2009, have still not been addressed (e.g. station
locations for trunk and feeder services). While it is understandable that given the significant
endeavour that the CoCT has put into the project there is limited time to address such
requests, it will be appreciated in moving forward if effective information exchange can take
place.
Sessions have been held with DOT to respond to specific requests for further information. DOT
is requested to indicate what information is still requires. A further session between DOT and
the City will be scheduled where these can be discussed and where any further information
required can be supplied.
721.
Evaluation
722.
The following represents a compendium of the initial comments from DoT on the MyCiTi
Business Plan.
Noted.
723.
The System Plan for MyCiTi
724.
1.1 Types of transfers
725.
This section of the MyCiTi Business Plan makes note of two different situations in which
“open” transfers will occur: Trunk to feeder; and Feeder to feeder. Is the City of Cape Town
planning to implement a time-based transfer for open transfers? Such a transfer type was part
of the failure of some aspects of the Rea Vaya system, and such open time-based transfers
have generally failed in all developing nation applications to date due to:
o
Gaming of the system by customers (e.g. trip linking to complete a roundtrip with just a
single fare);
o
Grey markets for re-selling fares;
o
Pedestrian deaths due to people rushing to meet the transfer time deadlines; and
o
Difficulty in achieving the proper level of signage and information to explain the fare
system.
DOT caution is noted. The current plan does not involve time-based transfers. The city has
opted for the physical solution in building closed transfer stations which will allow trunk – feeder
and feeder – feeder at selected locations. At all other location, customers will have to pay again
when transferring to a subsequent service.
DoT would like to receive a briefing from the CoCT to explain the policy on open transfers; this
is only applicable if CoCT plans to offer free open transfers.
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726.
1.2 Fares
727.
The current proposed fares are in many instances higher than existing fares being applied to
Golden Arrow / Sibanye customers. While a certain level of fare increase may be possibly
justified given the improvement in services MyCiTi, customers will possibly react forcefully to
substantial increases. For example, Atlantis customers may see an increase of R4 or more
per trip over their existing fares.
Please see the discussion in the Covering Statement in paras 64 and 65. For current
passengers that only use one mode (bus) without transferring to a subsequent mode (like taxi),
IRT fares are higher. For example, an Atlantis customer that takes a bus to the City and walks
to work from the Bus terminus will have to pay an extra R3,50. This additional R3.50 will buy
him/her a 50 min travel benefit and and additional feeder trip within the CBD. Irrespective of
these additional benefits, the customer will still have to pay more. The city’s technical team has
identified this and is currently reviewing its fare structure to address this prive discrepancy.
728.
There does not seem to be any plan in place to deal with the possible disruptive actions to be
taken by customers in areas being given substantial fare hikes. It is quite possible that
protests could ensue, including the possibility of violence. DoT would like to see the CoCT
develop a formal plan to address these circumstances.
Noted. Our intention in revising the fare structure is to seek to ensure that there are reasonable
options available to users at fare levels not significantly different from current levels while not
compromising financial sustainability. The revised fare structure will avoid this from happening.
729.
While it is understood that CoCT may be developing fare options to provide a discount to
regular users, this may not fully address the fare cost concerns for several reasons:
We note these issues, which will be considered in the review of the fare structure.
o
Low-income residents are often unable to buy in volume;
o
Volume-discount fare structures encourage card bundling by customers (e.g.
customers may exert much effort to having multiple family members and friends using
the same card to build up a discount volume, which does not really encourage
additional usage but does create inconvenience to the customer);
o
Providing savings on commuter trips over other travel can be regressive since most
residents in an area like Atlantis are relatively low-income (i.e. fare structure can end
up giving favour to one type of low-income customer over another type of low-income
customer); and
o
MyCiTi will ultimately be a closed business model in which any discount given to one
group will have to be compensated by a higher fare to another group.
The City seeks to implement a balanced approach which addresses as many of the constraints
as possible including financial sustainability constraints and practical issues of implementability.
In relation to the particular issues raised here it should be noted that low fares are currently only
available to those buying multi-trip tickets.
The current approach to subsidisation makes long distance commuter fares in South Africa very
cheap. The fare structure and approach to transport needs to shift patterns so that urban form
becomes more efficient while taking into account the poverty of many of those living at distance
730.
In particular, DoT is concerned over the level of the maximum fare at R 16. Certainly, DoT
fully supports all efforts to achieve financial sustainability, but fares that are likely to prompt
significant customer reactions may put the entire system at risk.
Because of the closed business model lowering fares for one set of customers requires that
fares for others be higher – unless certain types of ridership can be increased. Increased peak
level ridership does not necessarily increase financial viability since it requires upscaling of the
fleet. The key is to increase off-peak ridership because this will increase volumes in vehicles
that are running anyway
731.
One possible solution is to consider reducing the maximum fare initially to R 14, and then with
time introducing increases to the maximum fare. DoT would like to understand the financial
impact of such an option.
We would obviously like to have fares that are as low as possible, but must address the
financial impact of this. Reducing the maximum fare to R14 would be entirely the wrong
approach. Indeed, we of of the view that under certain circumstances the maximum fare should
be considerably higher. The objective is to charge more to people who are able and willing to
pay more, but have cheaper options that poorer people can access under certain
circumstances. Lower off-peak fares are a key element of this. These could be lower than R14.
732.
While not discussed in the MyCiTi Business Plan, there are other aspects of the system’s fare
system described on the CoCT website. In particular, the website notes that various discounts
will be applied to certain customer classes. Based on age, young children will be given free
The main motivation for introducing the age based discount is that Cape Town public transport
users are currently familiar with this approach. Only if it proves significantly problematic in the
Cape Town environment would we consider changing to a height based approach, since any
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ridership and others will be given discounts. International experience has shown that agebased discounts have largely failed in developing-nation circumstances. The amount of
gaming can be significant. In particular, customers will falsely claim a child’s age to gain the
discount.
City response
change of this type creates uncertainty and new problems and we need to have a well geared
up marketing capability to manage such a change
There is a much better mechanism for implementing a discount of this type. A “height-based”
rule is a much preferred mechanism. In this case, children below a certain height are admitted
freely. A height-based rule is an absolute measure that cannot be easily gamed by the
customer. Furthermore, height is probably a better indication of whether a child will be sitting
on a customer’s lap or whether the child will require his or her own seat.
DoT recommends that the CoCT reconsider any use of an age-based discount.
733.
It is understood that the CoCT is proposing to force customer transfers on longer feeder routes
in order to improve revenues. In general, purposefully creating customer inconvenience is not
a recommended practice, especially if a system is intent on capturing discretionary users.
Cape Town is apparently initially forcing such a transfer at Camps Bay for customers
emanating from Hout Bay. In this instance, customers will undergo the inconvenience of a
forced transfer (which they do incur currently) and they will end up paying more. There will be
a negative reaction to such circumstances. Moreover, as the system grows the likelihood of
additional long-distance feeder routes will increase.
DoT would like the CoCT to consider using a distance-based fare structure on the feeder
services. This fare structure will increase revenues in addition to avoiding circumstances such
as those being planned for the Hout Bay to CBD route. It is recognised that there are
concerns with fare gaming with distance-based feeder fares, there are effective solutions to
these issues. DoT would be pleased to assist the CoCT in the design of a distance-based fare
system for the feeder network.
We are already seeking to introduce distance based feeder fares for long feeder routes and
have made sure that the fare system technology will be able to address this.
The following issues remain difficulties:
o
Tapping on and off on the vehicle exposes the system to gaming. i.e customers tend to tap
off early but they remain on the bus.
o
The proposed city’s feeder fleet has one left sided door. This was to avoid fare evasion
issues wrt the 2nd door. At this one door, both boarding and alighting passengers will have
to tap on and off which will negatively impact operations.
o
What happens to this distance-based feeder when it enters the flat fare inner city domain?
Initially, the plan involved a long feeder from Hout bay to CBD via Kloof Nek. Passengers
desiring to go around the coast towards Sea Point would have transferred (at an additional R5)
in Camps Bay. A closed feeder-feeder transfer in Camps Bay was investigated but technically
could not be achieved. The length of this feeder and poor operational performance resulted in
the proposal to split this feeder at Camps Bay.
The city would welcome the technical advise to overcome the above concerns and issues with
distance based feeders.
734.
1.3 System plan and design
735.
This section states a projected Phase 1A operational deficit of R 118 million per year.
However, it is not clear if this projection includes the additional services to Montague Gardens
(trunk service from Racecourse Road and feeder service to Du Noon). It would be useful to
clarify the operational revenue and cost savings from these additional services.
Yes, this does include the Racecourse trunk into Montague Gardens and Du Noon to Century
City feeder. It is at present not possible to give the costs disaggregated between different
routes, since the Phase 1A system has been modelled as a whole. However, this information
can be determined and will be shared with DOT in the future.
736.
It is also not clear if the Racecourse Road trunk service is part of the long-term plan or if the
connection to Montague Gardens will change in the future (e.g. along Blaauwberg Road for
customers coming from Atlantis). It would be useful to clarify until when the services will use
Racecourse Road.
Yes, Racecourse Road is part of the long term plan. This trunk will be extended southwards
from Montague Gardens towards Century City, Frans Conradie Ext, Vanguard Drive towards the
SE Metro.
737.
It is noted that there is the addition of a feeder from the R27 to Century City. Does the
existence of this feeder now preclude trunk services being eventually applied to this route? If
trunk services are eventually to be used to connect to Century City, when is this projected to
happen?
This feeder service replaces the previous trunk service from Century City to the CBD. In recent
months, PRASA completed the new Century City Rail station which now provides an adequate
‘trunk function’ from Century City to the CBD. This feeder now connects the R27 trunk and the
Rail service which should function of feeders.
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738.
If the above noted services to Montague Gardens and Century City are “temporary”, there are
many issues regarding how any future transition is made to different services along these
routes and corridors. In particular, what provisions are included in contracts to make such
changes? How will fleet vehicle types be re-deployed at the time of the transition? To what
extent will existing infrastructure become redundant (e.g. feeder stations being replaced by
trunk stations) in the future? DoT requests the CoCT to provide information on the monetary
value of all infrastructure that will become redundant in such circumstances. DoT also
requests a clearly defined plan on the transition process along with time lines.
No, these are not planned to be temporary.
739.
If the above noted services are not temporary, then DoT does have concerns about the longterm quality of the system and related issues of attractiveness to discretionary users and
overall system legibility.
Not so. Refer to item 737.
740.
There is also an issue as to whether the Sea Point area of the CBD should be served by a
trunk or feeder service. From the City’s modelling results, it appears that there is justification
for one trunk route into Sea Point. This would allow customers to make easy trunk-to-trunk
transfers to Sea Point services at either the Civic Centre station or the Stadium station. Such
access would help create a more legible and intuitive system. The trunk services will also
reduce travel times to Sea Point.
The trunk route to Sea Point was always planned to be in mixed traffic west of Bree Street. The
future option to extend the trunk service west of Stadium Station has not been discarded. The
original plan had two feeder routes on Main Road west of Glengariff Road, both travelling in
congested traffic conditions. The latest plan has one of these feeder routes on Beach Road in
less congested traffic. If a trunk route appears more desirable in the future, the latter feeder
route can be moved to Main Road with no real change in the vehicle km. The shelters at feeder
stops/stations on Beach Road can then be reused elsewhere. About R100m can be saved by
not building trunk stations on Beach Road, Sea Point and strengthening the road pavement in
the short term. Very little travel time will be saved by providing the trunk to the west of Stadium
Station. Only one trunk route was planned to use Beach Road, so most passengers would have
had to transfer at either Civic Station or Stadium Station anyway. Feeder Stops/Stations are
located at closer spacing than trunk stations, so passengers will have a shorter walk with the
current plan.
By contrast, by providing only feeder services to Sea Point, customers will have to make nonintuitive transfers at the Civic Centre or the Waterfront. The feeder services will travel in
slower mixed traffic lanes and increase travel times.
While it is understandable that Sea Point may not be a Phase 1 priority, it nevertheless does
possess trunk demand figures overall. Currently, the area is served by both minibus taxis and
Golden Arrow services.
Will the City leave open the possibility of future trunk services on Beach Road in Sea Point by
not implementing feeder services now on Beach Road?
It is recommended that Cape Town does not implement feeder services on Beach Road that
would effectively block out a future trunk route.
741.
Likewise, in the CBD area, it is understood that the MyCiTi team is opposed to transit malls,
especially on Long Street. However, there are many stakeholders that favour such an
approach, including Cape Town Partnership and individuals in the City’s Planning Department.
The development of a transit mall could lead to a closed feeder station at the top of Long
Street that would ease transfers across the City. Instead, customers will have to travel much
further to make a transfer. The transit mall concept also holds the potential to positively
transform the area.
There may also be an opportunity to create a convenient closed transfer station on Dorp
Street near Wale.
DoT requests an engagement with the CoCT to discuss the potential of a Long Street transit
mall as well as a transfer station on Dorp Street.
Very little travel time will be saved by providing the trunk to the Dorp Street area. Only one trunk
route was planned to the Dorp Street area, so most passengers would have had to transfer at
Civic Station anyway. Leeuwen Street is better than Dorp Street for trunk buses to manoeuvre
in. The best location for the only trunk station planned beyond the Adderley Street Station on
this original route is on Loop Street between Dorp and Wale Street on the right-hand side of
Loop Street.
Feeder Stops/Stations are located at closer spacings than trunk stations, so passengers will
have a shorter walk with the current plan. The excellent free transfer facilities being planned at
Civic Centre station offer wonderful access between trunk services and origins/ desinations.
Where there are broader initiatives to improve urban landscapes and pedestrian facilities (eg in
upper Long Street), the MyCiTi routes and infrastructure should be adjusted / planned
accordingly.
The City is looking forward to engaging with DOT on this matter.
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742.
1.4 Passenger demand per IRT route
Table 2 of this section summarises many of the operational characteristics of specific routes.
DoT has much concern over the vehicle capacity being stated for the 12-metre feeder
vehicles. The table states a value of 91 passengers per vehicle. Based on international
standards, this value would seem to imply a standing passenger density of 7 persons per
square metre (or even higher). Such a level is well beyond what is acceptable for an IRPTN
investment. Such a level will discourage any use by discretionary customers and lead to
premature deterioration of the vehicles. A more typical passenger capacity for a 12-meter
vehicle would be approximately 70 passengers. Furthermore, the CoCT would be well
advised to plan its operations at something slightly less than 100% crush capacity.
743.
Likewise, for an 18-metre vehicle on the T01 trunk service, the table states a vehicle capacity
of 146 passengers. Again, this passenger density is well beyond what has been envisioned
for quality IRPTN systems in South Africa. An 18-metre vehicle operating with 4 persons per
square metre of standing space will have a capacity of approximately 120 passengers.
Operating at levels higher than this in the South African context is discouraged.
744.
DoT requests that the CoCT formally respond to the issue of the passenger capacity on all
MyCiTi vehicles.
745.
There is also much concern regarding some of the headways being stated in Table 2. In
general, peak headways above 8 minutes are discouraged. It is found that above this level,
customers begin to require a “scheduled” service rather than a show-up-and-go type service.
It is understandable that higher headways may be necessary in some instances, especially in
cases where 8-metre vehicles are already being assigned to the service.
746.
However, it is rather questionable to employ peak headways as high as 15 minutes when
utilising larger vehicles, such as 12-metre feeder vehicles. In such cases, the CoCT would be
encouraged to shift to a smaller vehicle in order to achieve a more customer acceptable peak
headway.
The 18m (146) and the 12m (91) vehicle capacity have been based on accommodating 5
people per m2 available for standing. City feels that this is acceptable. The available legal limit
on these buses are: 18m – 142 passengers + 2 wheelchair positions, 12m standard – 89
passengers +. 1 wheelchair position and 12 Airport – 92 +. 1 wheelchair position. The model
will be updated to account for the minor differences.
The City disagrees. Customers tend to require a more scheduled service if headways exceed
10, and in some cases 15 min, in South African conditions – although lower headways are
obviously preferable.
The City notes DOT’s point of shifting to smaller vehicles to improve the headway. However the
shift to the smaller 9m vehicle has a significant impact on the operational cost. There is a
significant difference in capacity which then translates to more vehicular units which further
translates to more drivers which then adds to the operational costs.
The City (for reasons of geometry and urban fit) is currently reviewing the use of 12m as
feeders.
747.
As has been seen with the initial efforts on the City’s inner city service and Airport service,
ridership may be quite poor when offering a compromised system. Long peak headways will
undermine attempts to capture discretionary users. Thus, projected cost savings from larger
vehicles may end up costing more in terms of lost revenues.
The use of passengers numbers on the inner city and airport service to motivate this point is not
valid. Current surveys have indicated that the current headways are acceptable for these
services. The main reasons for the low patronage is inadequate marketing and the lack a full
‘network’ that takes close to my desired destination as opposed of being dropped at the civic
station. The original inner city loop was an event service which was constrained by road
closures and adequately serving the fan mile and festivals. After the World cup the poor
patronage was expected and therefore terminated accordingly. A revised inner city service is
planned to commence shortly.
748.
For this reason, DoT would like to conduct discussions with the CoCT on the issue of feeder
vehicle sizing.
Engagement is welcomed.
749.
1.5 Remainder of Phase 1A
A key objective of the interaction between the CoCT and National Government will be to focus
Comment on BP and City response Dft4.12 101008.doc
In addition to reducing operational deficit, the roll-out of the system must attempt to complement
and integrate with the city extensive and well used rail system and also packaged to ease
industry transition process.
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on efforts to extend the system in a manner that provides value for money in terms of reducing
operational deficits.
750.
751.
For this reason, DoT is formally requesting that the CoCT more actively pursues options that
can cost-effectively build upon existing infrastructure. It would seem that the existing busminibus taxi lane on the N2 in Cape Town could be used for this purpose.
In particular, services could be potentially extended to Mitchells Plain, Delft, Khayelitsha, and
Mfuleni with a modest infrastructure investment using the R300 and the N2. The interest in
these routes stems not only from the increased passenger revenues but also from the addition
of existing Golden Arrow subsidies to the MyCiTi business structure.
This city has not pursued these options because:
•
With no stops between origin and destination, this service would duplicate the rail
service. The city acknowledges the current problems of the rail service (safety and
lack of capacity) but this need to be challenged and fixed accordingly.
•
These express services require feeder services at the home side of the trip which now
requires significant infrastructure (stops and a depot) and fleet especially in these
densely populated areas.
•
These proposal criss-cross existing operations and is premature with respect to
industry transition.
This express service will not provide significant more travel benefit to the customer who
currently uses the existing road based public transport. This service does not play to ‘BRT’
strengths.
752.
For these reasons, the DoT formally requests the following information from the CoCT for
services to Mitchells Plain, Khayelitsha, Delft, and Mfuleni:
o
Estimated amount of passenger trips per day and passenger trips per peak morning
hour between each of these areas and the CBD
o
Estimated cost of two trunk stations in Mitchells Plain, two trunk stations in
Khayelitsha, one trunk station in Delft, and one trunk station in Mfuleni
o
Estimated amount of Golden Arrow subsidies currently being applied for services in
each of the areas.
753.
DoT requests that the CoCT indicates when such estimates could be produced. Much of this
information should be readily available from the city’s demand model and from existing
infrastructure cost projections.
754.
DoT certainly recognises that there would also be additional infrastructure costs to consider
(i.e. possibly additional depot costs). DoT also recognises that there would be considerable
industry transition issues to be undertaken for these areas. Nevertheless, given the significant
potential operational revenue and subsidy gains from these services, DoT would like these
additions to be given urgent consideration in full Phase 1 planning (rather than waiting until
Phase 2).
Noted and will be shared accordingly
Refer to item 750 and 751.
755.
1.6 Sequencing the roll out of Phase 1A
The CoCT lists five milestones in the implementation of Phase 1A with the completion targeted
for September 2013.
756.
It appears that the CoCT will launch trunk services to Bayside by January 2011 (Milestone 0),
but there will be no corresponding feeder services in either Table View or the CBD until late
2011.
Comment on BP and City response Dft4.12 101008.doc
Correct (until November 2011) – but see Oct Business Plan for final dates.
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757.
Comments
DoT is concerned about the plan for premature service launches. While it is understandable
that Cape Town wishes to launch the system prior to the March 2011 elections, there are risks
associated with another premature start-up. Without a minimum critical mass of origins and
destinations, demand may fall well short of the expected levels. In turn, criticism from the
news media and other stakeholders can further erode council and public confidence in the
system. Clearly, the lack of customers on the current Airport service is a prime example of
this phenomenon.
City response
Noted and agreed. It is acknowledged in the plan (pg 32, section 4.4) that piecemeal
implementation is not ideal. However due to cash flow constraints and time required to
construct, the city had no other choice but the proposed piecemeal implementation.
The city is reviewing its roll-out to better address DOT’s concerns. However its needs to
balanced out with time and money.
758.
It is understood that the CoCT may launch CBD feeder services early but without the
associated formal station infrastructure. However, as DoT witnessed during the World Cup
trial of the inner city routes, a mere signpost may be insufficient to draw awareness and
demand towards the system. Temporary services may create a downward spiral in which
poor quality and poor system legibility results in low customer demand which in turn reduces
council and public support in proceeding with further investments.
The inner city feeders is planned to be completed by October 2011. These stops will be
constructed as planned and originally designed. An interim service will commence shortly and
will extend to October 2011 serving the current airport trunk and the future Bayside trunk. To
improve stop visibility and legibility of these interim stops, peninsula stops (bump outs) are
being built. Light posts flanking these stops will have MyCiTi ‘flags’ to assist the system visibility.
759.
Furthermore, attempting to implement multiple stages of temporary measures consumes
tremendous amounts of staff time that could potentially be better utilised to bolster the
system’s long-term sustainability. By focussing resources on short-term milestones, the
ultimate quality of the system will be undermined.
Noted and agreed.
760.
DoT requests that further discussions are held with CoCT over its multi-stage plan for
implementing Phase 1A.
Agreed.
761.
1.7 Vehicles
762.
As has been noted above, DoT is concerned over the stated passenger capacities of the
vehicles. The values of 91 passengers for a 12-metre vehicle and 146 passengers for an 18metre vehicle are well beyond DoT’s objectives for passenger comfort with IRPTN services.
As noted, DoT requests further discussions with the CoCT on this issue.
See discussion at items 742 and 743above
763.
DoT also has concerns about the standard left-sided doorway on the 12-metre trunk vehicles.
This doorway violates DoT’s mandate to provide universal access with all IRPTN services.
Even if it is claimed that the use of this doorway will only be on a temporary basis, there are
concerns that it may become a permanent feature that undermines national policy objectives.
The left sided door has been specified wider for interim use until the system is fully realised. The
City has no intention to reduce its general standard on the Universal accessibility for the
medium term.
764.
CoCT has explained that the left-sided doorway will be used to provide services to three rural
stops along the roadway stretch between Sandown Road in Table View and the R307 in
Atlantis.
765.
Utilising trunk services for these stops is problematic for several reasons. Trunk vehicles
along this route will be travelling at a speed of 100 kph, and private vehicles will be travelling
at even greater speeds. Stopping a trunk vehicle at this speed can create safety issues.
Furthermore, given the low demand at the rural stops, it would seem unlikely that the service
would stop regularly. Instead, the trunk vehicle will be slowing to see if there is a passenger at
the stop. While this technique can work for a conventional bus service in a slower residential
setting, it is quite at odds with a high-speed trunk service.
Correct, this left sided door vehicles will be used (in the long term) on the Atlantis trunk service.
Currently there are rural stops (including Koeberg Power station) between Atlantis and
Sandown Rd. The number of boarding and alighting does not warrant (capital and operational)
trunk stations along this stretch of road.
Kerbside ‘median like’ stations could be constructed but this now requires:
Comment on BP and City response Dft4.12 101008.doc
•
Expensive infrastructure on both sides
•
Customers would have to cross the bus way to access the station.
Currently these stops are served and it would not be appropriate for system not to include these
stops.
Taking into account all the constraints the left sided door option seemed the more suitable. The
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766.
Comments
There is also the issue of pedestrian crossings on this portion of the R27. Currently, no
crossings are provided at these stops. This is entirely unacceptable for services funded
through the IRPTN programme and the PTISG. The roadway involves high speed traffic and
DoT simply cannot support unprotected crossings in such circumstances. A safe form of
crossing could involve installing a traffic signal with a signalised pedestrian crossing.
However, this form of crossing would create many problems on this type of roadway since it
would only be used sporadically and motorists would be unaccustomed to stopping.
Alternatively, CoCT could construct elevated pedestrian bridges at each stop, but this would
be a significant investment for such a small demand.
767.
It is recognised that current Sibanye services are indeed providing operations at these rural
stops. This does not mean the practice, though, is appropriate or acceptable for the type of
high-speed roadway.
768.
There are also other potential solutions to rural services. DoT requests a session with CoCT
to resolve this issue.
769.
In any event, no further vehicles should be purchased that do not meet national IRPTN
standards with respect to universal access.
City response
City acknowledges the issues of traffic and pedestrian safety and the resulting fare
management issues. This will be addressed accordingly.
The City welcomes a session with DOT to resolve the interesting dilemma.
Noted.
770.
2. Decisions related to infrastructure and costs
771.
2.1 Kassel kerb and bridge
There is no indication in this section if Cape Town is still committed to providing Kassel kerbs
on feeder stations.
The City intends using Kassel kerbs at all feeder stops. 17000 Kassel Kerbs have already been
manufactured and stored for this purpose.
772.
2.2 Non-motorised transport
773.
Besides the investment in the West Coast cycle way, most of the other NMT components
(bicycle parking, bicycle sharing facilities, pedicab system) appear not to have been
implemented to date. It is also not entirely clear the extent to which pedestrian facility
upgrades are actually being constructed around the station areas, beyond the upgrades at
high-profile stations such as the Cape Town Stadium. Could CoCT elaborate on which station
environments have undergone a significant pedestrian upgrade up to a distance of 500 metres
from the station?
Pedestrian and cycle facility upgrades have been planned wherever these are desirable.
Designs and tender documents for improved access facilities to all the West Coast IRT trunk
stations are ready for the advertisement calling for tenders in the very near future. The City has
been awaiting confirmation of funding from Treasury before proceeding. Many NMT
improvements have already been implemented around Granger Bay, Stadium and Civic Centre
IRT stations
774.
This section reaffirms the intention to permit bicycles onto the vehicles, as is now standard
practice in many overseas applications. However, in the responses to the PTIS survey, CoCT
indicated that they are re-evaluating whether bicycles will be permitted. Could CoCT confirm
whether bicycles will be permitted on both trunk and feeder vehicles? There is a concern that
this may be an area where the original vision for Cape Town’s system is being somewhat
diluted.
No, this is not the case. Busses have been specified to accommodate bicycles. However, it
may not be practical to allow bicycles at peak times, depending on the passenger volumes per
bus during peak.
775.
It is noted that none of the current vehicles have a bicycle insignia on the doorways to show
Noted.
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that bicycles are permitted. CoCT should ensure that the vehicle specifications mandate a
bicycle symbol at the doorways.
776.
DoT is somewhat concerned that CoCT has de-prioritised NMT investments and integration.
Could CoCT provide a clear time line schedule for the implementation of each NMT
component?
The City has not deprioritised NMT and is happy to provide DOT with the timeline re the
relevant elements. All these timelines were already provided in Annexure E to the City’s PTISG
Budget Proposal of August 2010.
777.
3. Business structure and contractual relationships
778.
3.1 Introduction and overview
779.
DoT largely supports the business model approach of the CoCT in which a municipal entity
oversees various independent contracts including: Vehicle Operator contract, Fare System
contract, Control Centre contract, and Station Services contract.
Noted.
780.
It appears that the Fare System contract, Control Centre contract, and Station Services
contract are yet to be awarded. This implies that the system will operate for several years
without these critical functions. DoT is quite concerned about this lack of time line coordination. DoT requests that CoCT provide a detailed time line of when these contracts will
be brought into operation.
Regarding the Fare System and Control Centre contracts: preferred tenderers have been
identified and negotiations have commenced. The plan is to conclude these contracts by midDecember 2010, subject to the following: (a) successful negotiations; (b) awarding of the
contracts to the preferred bidder (subject to City Manager approval and Council support); (c)
approval by the City Manager; (d) Council approval in terms of s33 of the MFMA. The tenderers
have indicated that they can be fully operational regarding Milestone 0 by early April or May
2011.
Regarding the Station Services contract: It is expected that this contract be put out to tender in
early December 2010 and that it can be awarded by April or May 2011 (provided that there is a
Council meeting in March 2011, which may or may not be the case depending on the date of
the elections). It is planned that interim cleaning and security at Bayside stations will be
provided through interim VO contracts, and provision of smart cards and topping them up at
station kiosks through the City’s Revenue Services.
781.
3.2 Quality of service mechanisms
782.
It is not clear if the few measures of quality listed in this section are a complete list or if CoCT
has developed something more complete. In most modern systems of this type, there is a
more detailed list of the incentives to control quality.
The Business Plan is a high level document, and thus summarises the quality control provisions
(as is the case with many other components of these contracts). Extensive provisions to ensure
high quality is planned to be included.
783.
Furthermore, the contract should include positive incentives to reward quality rather than just
fines to penalise poor performance. If only the negative incentives are introduced, there is no
motivation for VOs to excel in terms of customer service.
The City has planned to include such positive incentives. These measures have been
questioned through some internal debates, under the belief that providing such positive
measures will merely result in a higher deficit. This issue is still being debated, and it is likely
that some incentives will be built in. (!)
784.
DoT is willing to assist CoCT if the City does not have an appropriate contractual system
developed.
The City would like to make use of DOT’s offer and will request further input and suggestions.
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785.
3.3 The fare system contractor
786.
This section makes reference to fare products that permit unlimited trips during a set period of
time (day, week, month, etc.). This type of fare product has not worked particularly in the
developing-nation environment in which customers will game the product by allowing
significant sharing of cards between potential customers. DoT strongly encourages CoCT to
consider the ramifications of all its fare product options.
Ramifications will be considered.
787.
This section notes that the Fare System contractor has yet to be appointed and that the
contractor will require up to 24 months to test and to install the equipment. This time line issue
is of significant concern to DoT. An electronic fare system should be in place prior to the
system operating to Bayside. It is undesirable to operate a distance-based fare without an
automatic fare system.
It is expected that the Fare System will be in operation from April or May 2011 – see from item
887.
788.
4. Institutional Plan
789.
4.1 Institutional framework
790.
It appears from this framework that the internal city unit will continue to determine the route
and network structure of the system even after the municipal entity has been formed. This
type of structure has generally caused difficulties in applications overseas in which political
interference in system design and development has hampered success of the system.
This is indeed the proposal as it stands. The City will appreciate discussing these aspects with
the DOT. (!)
While city officials must be part and parcel of the system design, the lead should ideally come
from the municipal entity. The entity will be better equipped from a resource and staffing
position to handle this task. Furthermore, the entity will be better positioned to evaluate routes
and network issues from a business perspective without political interference.
[See also item 795 to 797 below.]
791.
4.2 Determining an appropriate mechanism for the provision of BRT services
792.
While DoT supports the overall institutional plan, there is concern over the delay in
implementing the municipal entity. The initial development of an operational management unit
within the CoCT may pose several risks. First, such a unit will not have the professional
staffing resources available to a municipal entity. Second, the effort to create such an internal
unit will detract from other key design work.
The document states that the municipal entity will only become realisable once the system has
proven its financial stability. However, the management of the system through the internal unit
may inhibit that objective being reached. The professional nature and business acumen of a
municipal entity would likely be the best route to achieving a sound business and financial
model.
Comment on BP and City response Dft4.12 101008.doc
The Business Plan indicates at para 7.2 as follows: “The administration is of the view that the
City should first achieve higher levels of confidence in the projected implications of the roll out of
MyCiTi to identify and minimise the risks of the system to the City before creating a Municipal
Entity. The level and extent of operations required to justify the establishment of the Municipal
Entity is not expected to be achieved for 18 months to two years. Thus, there is a need for
internal capacity to oversee MyCiTi operations.”
It is noted that DOT is of the opinion that the very fact of delay in the establishment of the
municipal entity will add to financial risks materialising. However, the initial phase which is the
subject of the BP, is relatively small in comparison with the complete roll out of the BRT. The
potential risk of not having the ME in place from the very beginning is outweighed by the
expected benefit of the City dealing with the initial phase and gaining expertise in development
of a Service Delivery Agreement with the ME.
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The City would be happy to discuss and debate the relevant issues with DOT.
793.
DoT requests that the CoCT provide a clear time line as to when the municipal entity will be
established.
The City estimates that the Municipal entity will be established within 18 months to two years.
The City is considering reducing this period of delay.
794.
4.3 Pertinent issues regarding the eventual role of the Municipal Entity
795.
As noted above, DoT is concerned that the municipal entity will only have an advisory role in
network development. The municipal entity with its day-to-day business knowledge of the
system and its professional staff will be in the best position to make these types of plans. The
proposed entity will not function in the manner of international institutions in which the
operational planning aspects reside with the operational entity.
See item 790 above.
796.
5. Staffing structure and strategy
797.
The Organogram in Figure 15 reinforces a concern already expressed above that the
operations side (i.e. the future municipal entity) will be devoid of key planning responsibilities.
Instead all modelling, operational planning, and network development will reside within the
City. This structure will significantly inhibit the effectiveness of the eventual Municipal Entity.
See item 790 above.
798.
6. Financing MyCiTi
799.
6.1 City’s maintenance, project management, and other recurrent costs
800.
Table 10 shows the MyCiTi Project Office funded through the 2013/14 fiscal year. DoT hopes
that the Municipal Entity can be in place well before this period.
The budget for the Project Office relates primarily to the activity that has to be funded and does
not preclude an earlier implementation of the Municipal Entity. Currently the expected timing of
the Municipal Entity implementation is quite distant; however this will be reviewed as soon as
the starter service is running at which point there is likely to be a different perspective in the City
on the need for earlier establishment.
801.
The figures in this table do not show any escalation in future years. This is probably not a
particularly realistic view.
Figures are in real terms and will be adjusted for inflation.
802.
6.2 Phasing in Phase 1A
803.
Table 14 summarises the growing deficit from 2010/11 through 2013/14. It would be useful to
also show in this table the relevant PTOG funds that could be available to the system as it
enlarges. Section 9.6.5 indicates a total annual amount of R 55 million for all of Phase 1A, but
it is not clear the interim amounts for the partial Phase 1A milestones.
The subsidy amount available is negligible until the Atlantis service is comprehensively
implemented. However, estimates will be provided.
804.
Given the increasing deficit as Phase 1A proceeds, DoT urgently recommends that CoCT
provide the information requested above for potential early services between the CBD and
Mitchells Plain, Khayelitsha, Delft, and Mfuleni. These services have the potential to
This investigation will be done and these routes seriously considered as early options. It is
recognised that linking up to the South East is the next crucial step as soon as the
demonstration phase is in place. A key option already being considered is to link the new west
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dramatically increase revenues and PTOG inputs at a minimal infrastructure investment.
City response
coast infrastructure to the south east.
805.
6.3 Future PTISG requirements
806.
DoT would be interested in seeing more of a breakdown of planning costs expected for Phase
1B and Phase 2. Hopefully, the City has been cultivating in-house capabilities on skills such
as financial modelling to reduce these planning costs. A precise estimate of the future
planning costs and the assumptions in the estimate would be useful.
Currently costs have been estimated using standard rules of thumb between expected
infrastructure costs and planning costs. A number of decisions need to be taken prior to the City
being in a position to estimate these costs more accurately.
807.
6.3 Parking revenues
808.
809.
This section seems to hold a common misperception about parking fees. The idea that the
management of roadside parking yields significant net income benefits is typically unrealised.
At best, roadside management schemes by public authorities results in better control of
parking but not necessarily significant revenue.
Originally, the CoCT was pursuing a parking levy concept. This has internationally proven to
be a more lucrative opportunity. It will be disappointing if the CoCT has forgone consideration
of a parking levy. If this is the case, then it would undermine the extent to which the City has
the will to pursue a fuel levy as well. DoT requests that the CoCT provide a summary on the
status on the parking levy concept.
The on-street parking management system in a portion of the Cape Town CBD yields a net
return of over R7m per year. If this is rolled out together with the IRT trunk and feeder routes the
net income is likely to help subsidise the Station Services contract.
It is not expected that the management of parking around the stations will earn substantial
revenues outside the CBD. However, it is expected that there would be significant security and
control advantages throughout the system.
The pursuit of introducing a parking levy (presumably only on non-residential properties) has not
been forgone and nor is this compromised by the proposed on-street parking management
proposal. A parking levy proposal, linked to the property rates system has been developed.
The fuel levy is being actively pursued. No progress will be likely if Cape Town seeks to pursue
this on its own since such a levy will have to be agreed to in terms of national legislation and be
nationally administered. The matter is therefore being pursued jointly with four other
metropolitan councils and SALGA. Proposals for a share of the fuel levy to be dedicated to
public transport have been drawn up and presented by SALGA to the Minister of Finance on 5th
October 2010 at the national Budget Forum.
810.
6.4 Short to medium term
811.
In addition to the options discussed in this section, DoT would like to work with the CoCT to
evaluate the revenue and PTOG impacts of bringing forward certain services between the
CBD and the Cape Flats.
Noted and agreed
812.
6.5 Long term
813.
It is understood that the full phase scenario presented in this section was just an initial model
run. DoT requests that some planning investment is made to refine these figures to improve
the precision.
This is already regarded as a high priority matter for the city
814.
7. The transition from existing to new vehicle operators
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815.
7.1 Assignment of operators to company groups
816.
817.
The assignment shows that the two largest public transport companies in the city (Peninsula
Taxi Association and Golden Arrow) have been placed in the same group. This effectively
implies that this single company will ultimately control approximately 40% of the MyCiTi
system, based on existing mode shares. This large share will undermine the competitiveness
(and potentially fairness) of the system.
DoT would like to receive a more detailed explanation of why the CoCT elected this structure
given the long term negative ramifications.
*It is correct that Golden Arrow is a large public transport company, but is likely to have a
relatively small share in Company A: presently calculated at 22.5% (subject to further surveying
and settlement of the model). However the Peninsula Taxi Association is essentially a taxi
association and is not one of the “largest public transport companies” in the city.
The amount of the work that will be assigned to Company A will be based on the City’s
assessment of the size of the market share that the constituent parts of that Company will bring
to the IRT.
The City’s model of company formation will result in new companies being formed for each of
the contracts that will be put out as the IRT is rolled out. This will in fact build new companies
and will enhance competition. Thus the analysis upon which DOT relies is mistaken.
We will be happy to engage with DOT about this.
818.
7.2 Approach to industry transition
819.
Overall, the CoCT has created a model approach to the industry transition process. DoT
would like to work closely with the developers of this model to assist other South African cities
in similar processes.
Noted
820.
However, there is one area where clarification is being sought. DoT would like to know the
extent that the City has and will be consulting with the operators not affected by Phase 1A. As
has been the case in Johannesburg and Nelson Mandela Bay, these non-affected operators
can have significant impacts on the roll-out process.
The City will be engaging in a wider consultation process as part of the roll out for future phases
821.
8. Customer relations, marketing and communications
822.
DoT’s team has evaluated the marketing during and after the World Cup starter service.
Comments on these aspects are included separately in the report evaluating the initial
operations.
These comments have not been received as yet.
823.
National Treasury
824.
The National Treasury has reviewed the progress report and MyCiTi implementation plan. We
recognize the need for assurance regarding future PTIS allocations, and welcome the
consultation process underway on envisaged financing arrangements.
Noted.
825.
As provided for in Section 8(4) of the Division of Revenue Act, 2010, the indicative
allocations to the City of Cape Town set out in the schedules attached to that Act may
be regarded as firm allocations for the MyCiTi IRT project phase 1A.
In terms of s8(4) of DORA, where Treasury has specifically approved funding in terms of s 8(4)
of DORA, such funding “must be regarded as being firm allocations for the next financial year
and the 2012/13 financial year that will not be altered downwards in the Division of Revenue
Acts in respect of those financial years.” Thus national support and confidence in the Cape
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Town project is appreciated, and now enables the City to enter into multi-year construction
projects, which will help project delivery.
826.
Please note that, notwithstanding this commitment, material delays in project implementation
resulting in lags in expenditure, may result in adjustments to these allocations.
It is noted that, if project expenditure lags, allocations may be adjusted downwards.
827.
We would appreciate an opportunity to explore further the question of the ownership of the
busses and the proposal to sell these assets to a financial institution. It is not clear to us that
this is preferable to the establishment of an entity through which the city owns the busses and
exercises full control over their allocation and reallocation to operators, within the framework of
the evolving transport plan. (From a public policy point of view, the tax advantages of the
leaseback option have to be disregarded – we gain nothing collectively from an arrangement
structured to benefit a particular public authority at the expense of the wider fiscus, even if
these benefits are partially returned to the city or commuters.)
The proposed mechanism will be framed in terms of a set of agreements between the City, the
financial institution and the vehicle operators that grant the city step in rights whereby under
specified circumstances the City can effectively end the lease to the VO’s and take it over itself
or transfer it to a different operator. These step-in rights are only trumped by the asset owner
going bankrupt which is highly unlikely in the case of those financial institutions which will be
invited to tender. The alternative of setting up a municipal entity for this purpose is slow and
costly (probably more expensive than the fee to be paid to the bank). Banks are used to leasing
such assets and are thus likely to manage the relationship with the VO’s in a much more
professional way than an ME. Bringing banks into the arrangements allows new sets of
relationships to develop which are likely to have benefits in future – whether in terms of
accessing beneficial financing terms for future purposes or allowing the VO’s and banks to
become familiar with each other’s operations. The tax advantages, which are standard in these
arrangements, and significant, and have been factored into current modelling; it creates
uncertainty for the city if it is now ruled that this is not to be permitted, and will increase the
projected deficit.
828.
The National Treasury notes the proposed use of contact-less cards and pre-paid debit cards
which do not need a bank account, with no need to connect online to the banking system or be
verified by signature or PIN, and exemption from the Financial Intelligence Centre Act. These
systems appear to offer considerable advantages in reducing the risk of fare evasion or
collusion.
Treasury support for the proposed fare system in Cape Town is noted.
829.
Subject to the provisions of Section 33 of the Municipal Finance Management Act, 2003 being
fulfilled, the National Treasury sees no impediment to the city entering into contractual
commitments beyond the three-year MTEF period. We note, in particular, the motivation to
allow for operational skills to be developed in order to provide for public transport operations
such as contracts for vehicle operators (12 years), automatic fare collection (7 years), control
centre operations (7 years) and station management (6 years). The details of enabling such
contracts are important, and should incorporate appropriate performance obligations,
standards of service delivery and penalties where standards are not met. The Treasury and in
particular our Public-Private Partnership Unit would be happy to assist in reviewing draft
agreements, if this would be of assistance.
Treasury support for the proposed long-term operational contracts in the Cape Town IRT is
noted.
830.
We note that it is projected that the system will run at an operating loss for the period ahead,
estimated at R51 million in 2010/11 growing to R115.7 million in 2013/14. We will need clarity
on how these shortfalls will be met, taking into account city resources and funding available
from the national or provincial departments of Transport.
Comment on BP and City response Dft4.12 101008.doc
The City will engage with Treasury’s Public-Private Partnership Unit would be happy to review
draft agreements, to ensure the contracts contain appropriate performance obligations,
standards of service delivery and penalties where standards are not met.
As indicated in Table 19 on page 98 of the Business Plan, the City has allocated R65m per
annum from its rates income to contribute to covering the deficit. In addition, the City will rely on
reallocation of the public transport operational grant (PTOG), released through the
implementation of Phase 1A of IRT – and urgent steps by National DOT are required to achieve
this in time (see par 9.6.5 of the Business Plan). Any additional subsidy required on a temporary
basis (ie during roll-out of IRT, but before the PTOG funds are reallocated, or in case of an
unexpectedly high deficit) would need to funded as a transitional measure by drawing on PTISG
– as set out in par 9.8.1 of the Business Plan – while adjustments are made. (!)
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Annexure B: Comments on MFMA Section 33 information document, with City response
The information statement published in terms of section 33 appears in Annexure D, appearing from page 134.
Item
Comments
City response
Golden Arrow Bus Services (Pty) Limited
See also from item 192 for GABS’ comment on the full Business Plan.
831.
It should be pointed out from the outset that although the information document comprises 33
pages, it is pitched at a relatively high level of understanding, is very vague and/or evasive in
respect of certain issues and does not contain sufficient information regarding the cost
implications, benefits of the envisaged services, the level of patronage expected; etc, for
anyone to make an informed decision on, or for that matter, to comment on constructively.
The Section 33 process, which is a legal requirement, is not aimed at interrogating the MyCiTi
system but at the much narrower question of the implications of entering into contracts of longer
than three years.
832.
As mentioned, it appears that the City is intentionally evasive, specifically in dealing with any
issues that would have an impact on the cost structure. All matters in the document dealing
with issues of a financial nature are vague and no specific figures are provided. No proposed
budget is included in the document and it is noted with a great deal of concern that the
document does not specify the capital costs of any of the other Phases mentioned in the
document. Is the capital outlay for the other Phases going to be more or less than the
estimated R4 billion of Phase 1? Such detail is essential to anyone wishing to comment on the
City’s proposed IRT implementation. If one considers the detail in which the cleaning contract
is described, one can only assume from the absence of a similarly detailed projection
regarding transport, that the City does not know and/or wish to divulge the anticipated costs of
the implementation of IRT.
The City is committing itself to Phase 1A. Only very high level planning has been done relating
to future phases and the city is thus reluctant to provide cost estimates for these.
833.
Par 2.2:
There are a myriad of legislative requirements that the City has to meet in implementing a
project such as this – from the country’s Constitution to the National Land Transport Act, and all
legislation pertaining to local government. The City is paying close attention to these legislative
requirements.
Are these the only legislative requirements that the City has to comply with in order to
implement the IRT?
If not, what other legislative requirements have to be complied with and has the City
complied with said requirements?
834.
Par 3.1:
“Subsidised bus and rail systems have relatively low fares but peak services are
uncomfortable and off-peak services are inconvenient – where they exist at all”
What exactly is meant by this? The current subsidized bus services are scheduled in
accordance with demand and in the majority of communities currently utilizing such services,
the peak service rendered is on par with international standards.
It should also be noted that Golden Arrow has introduced approximately 400 new buses over
the past few years in an effort to meet demand and renew the existing bus fleet.
From the above quote and the general theme throughout the document it is clear that an
unsubstantiated negative impression is created in respect of the existing bus and rail services
Comment on BP and City response Dft4.12 101008.doc
The paragraph from which this quote is taken refers to public transport in Cape Town in general.
Not all characterisations refer equally to all modes. Most peak services are overcrowded, with
rail and minibus services particularly at fault here. Peak bus services are comparatively less
crowded but congestion makes peak bus services very slow. There is a severe absence of
reliable off-peak services. Minibus taxis which do run to some degree in off-peaks wait till they
are full before departing, making them seriously unpredictable.
While Cape Town’s public transport could be worse, there seems to be widespread agreement
that it could be a lot better.
The MyCiTi project seeks to develop a new trajectory for public transport over time, which is not
possible merely through making incremental improvements to the current services and business
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Item
835.
Comments
City response
in an effort to promote the proposed IRT services. The question of course is whether the IRT
services will deliver better and less expensive services to the public.
models.
Par 3.2:
The document emphasises the need to integrate with other modes – especially between road
and rail.
No mention is made of a transport plan on which the integration of the various modes of
transport is based. More specifically, no mention is made of how the City is going to deal with
the minibus taxi industry and whether the taxis are going to be required to cease operating or
whether only some taxi services will be operated and what the cost is going to be to ensure
the co-operation of the minibus taxi industry.
It is obvious that no mention is made of the negative aspects of the IRT, although the
countries that have implemented this system have pointed out said aspects. In this respect the
information document lacks balance. It also does not distinguish between the various cities
which have implemented IRT. Many of those cities are not comparable with Cape Town at all.
No mention is made of the estimated fares and fare increases required to sustain this type of
service.
“Existing minibus-taxi and scheduled bus operators are able to be accommodated
competitively within the new system providing opportunities for economic empowerment of
informal service providers.” – What does this mean? On reading this statement it appears that
the City is creating expectations that anyone, including all informal service providers, will be
accommodated within the IRT system.
Mention is made that the BRT is viewed as the most suitable solution to public transport
problems in the South African “context of lower density South African cities”. This is contrary to
international implementation of the BRT system where it has been shown to be most effective
in a high density environment.
Is the funding support from the PTSIG, as referred to in the document, guaranteed funding? If
not, what are the prerequisites to access the funding and will funding be guaranteed if the
prerequisites are complied with?
New legislation makes it impossible to force minibus taxis to stop running immediately although
it does provide for not renewing their licences, which means that over time they will cease to
run.
In essence, the approach is to improve rail, while replacing the current road based system with
the new trunk and feeder MyCiTi system. In principle, the approach is to accommodate the
current road-based players as operators in the new system, although it is not expected that all
will necessarily want to remain in the industry.
The operators will operate vehicles designed in line with MyCiTi specifications. The standard
model is that the operators will own the vehicles themselves, although initially different models
are being adopted because of the particular circumstances of Phase 1A.
The city is intending to pay compensation where required in cases where it replaces services
which have not reached the end of their period of permission to operate.
The BRT is made up of both trunk and feeder routes. The trunk routes could be seen as
somewhat equivalent to the current rail services, with pre-board fare collection and dedicated
right of way.
However Cape Town’s low density means that passenger loads on rail are very low outside
peak hours.. It is almost impossible to drive new rail lines through the current urban fabric – and
it would be prohibitively expensive. BRT provides a service somewhat equivalent to rail, yet it is
much cheaper to introduce and can provide smaller vehicles than trains, with more frequent offpeak services. It is able to penetrate into the current road based urban fabric in a rail cannot.
BRT thus lies somewhere between the current rail services and current bus services, and seeks
to combine the advantages of both. Trunk routes will be implemented in areas not served by
rail, including up the West Coast and for routes (e.g. from the South-East to Montague Gardens)
across the city not served by rail (which generally radiates from the CBD outwards)
PTISG funding is guaranteed for the immediate financial year and the City is in the process of
going through the steps required to ensure that funding for the following two years is
guaranteed; this is expected to be achieved.
836.
Par 3.4:
There are no figures or facts in the entire document that substantively support the principles
that underlie the sustainability of the IRT.
837.
Par 3.5:
Reference to Phase 1A should be clarified – does Phase 1A include Atlantis or not?
Sometimes reference to Phase 1 A refers to Atlantis and other times it is rather vague as to
whether Atlantis is included in Phase 1A.
The ridership has been extensively modeled and sustainability established on that basis. The
service will require subsidies as indicated in the document. Golden Arrow services are currently
subsidised.
Phase 1A does include Atlantis, although Phase 1A will take three years to implement and the
Atlantis service will be implemented in the latter part of the period.
Phase 1B is not yet clearly defined. It may involve more comprehensive servicing of routes in
the west coast, or a connection between the West Coast and the South-East.
Reference is also made to Phase 1B – What is Phase 1B? There is no description of Phase
1B in the entire document.
Comment on BP and City response Dft4.12 101008.doc
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Item
838.
Comments
Par 3.6:
Throughout the documents vague reference is made to the advantages of the new IRT system
and the vehicles to be utilised for the implementation of the services, e.g. “Vehicles will be
safer and more comfortable than most …” Based on what information are such general
statements made – are passengers going to have more comfortable seats; are all passengers
traveling from Atlantis going to be seated? Surely if such sweeping statements are made there
must be some basis for them and such specific information must be shared with the public and
interested parties in order for their comments to be informed and add value to the commenting
process.
The following statements refer:
“Providing a higher level of public transport service, patronage will increase through choice
users shifting from private transport which will result in a reduction of operating cost per
passenger though economies of scale. This factor also reduces pressure for increased road
space provision, which over time represents considerable saving. Furthermore, providing
continuously increasing road space for private car users is not a sustainable or viable option.”
and
“By smoothing the peaks and increasing off-peak demand, overall costs can be reduced and
income to the system increased.”
o
How big a switch from private vehicle use to public transport use is foreseen to take
place to arrive at the situation described by the City?
o
These statements imply that there is going to be a major switch from private vehicle
travel to public transport travel. What is this assumption based on? Is this a
reasonable expectation based on international experience?
o
Is the information utilised to base the assumption on used throughout all the phases of
the IRT? If so, then there is a basic flaw in the assumption, as there are some areas
where there will be a greater switch from private vehicle use to public transport use,
but there are also areas where there will not be a substantial switch simply because
people in those areas do not have private vehicles and have always utilized public
transport.
City response
The public has seen the standard of vehicles to be used in the World Cup service, so
comparisons are possible. They are clearly more comfortable than some of the current services
provided.
Atlantis is an extremely long distance when compared with most urban public transport services.
It is envisaged that passengers from Atlantis will generally be seated.
The modelling is based on a shift of between 0% and 10% of current car users. It is anticipated
that the faster travel time on the West Coast trunk will prove attractive to current car users, thus
making the service reasonably car competitive.
It is not expected that the service will make a major impact in reducing congestion immediately.
However over a period of a decade or more it is expected that congestion and the need for
additional road space for private vehicles can be contained, despite significant increases in
numbers of people anticipated to be living in the West Coast area. The switch is not expected to
be dramatic or immediate – but the service should create the conditions for a significant shift
towards public transport over time.
The modelling has distinguished between choice users and captive users. It is anticipated that
current public transport services will be replaced, with the result that the new system will carry
most if not all captive users. It is intended that over time the system will reduce the desire to
shift from public transport to cars.
Compensation for the minibus taxi operators is being addressed. However, the basis for this is
not the same as the Nelson Mandela Bay approach, which appears to be prohibitively
expensive. See the Business Plan for further details on compensation and contracts with
existing operators.
An aspect that will also increase costs is the compensation to be paid to minibus-taxi
operators. No mention is made of this aspect and it must be addressed in detail as it has
major cost implications for the IRT.
839.
Mention is made that in Phase 1A, elements other than the vehicle operations are going to
incur costs that will not be covered by the revenue generated from fares. It should be spelt out
exactly what the additional costs are estimated to be and where the financing for said costs is
going to be sourced.
These additional costs will not be limited to Phase 1A but will be incurred with the
implementation of all the Phases envisaged to be implemented.
The claim that as the system is rolled out it will be possible to fund the operations from a
combination of the fare revenue and the level of subsidy similar to that currently provided to
conventional subsidized bus transport, is misleading and unsubstantiated:
o
Does this statement mean that no additional subsidy will be required to operate the
IRT, other than the subsidy currently being paid for the bus services rendered in terms
Comment on BP and City response Dft4.12 101008.doc
The total costs are provided in the Business Plan. Estimates cannot be provided in too much
detail, given the tender processes yet to run.
The claim that the system should be able to be run on fare revenue plus current subsidy levels
is based on modelling done by international specialists.
The claim is that the total subsidy required from government should not be greater than it
currently is.
There are fixed costs associated with the first Phase which can be spread as the system is
extended.
The detail of the subsidy requirements and how they will be financed are dealt with in the
Business Plan. It is intended, in line with government policy, that subsidies currently being paid
to the existing industry will shift to the new services as the new services replace the legacy
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Item
Comments
of the Interim Contract with the Department of Transport? Or
o
City response
system. In Phase 1A these amounts will not be sufficient and further sources are required.
Does it mean that, in addition to the fares collected, the subsidy required would be at a
rate per passenger similar to the current rate of approximately 50%? If that is the case,
it will make the IRT much more expensive than the current service.
The modelling done in respect of Phase 1A shows that it will be 100% more expensive
than the current services being operated and there are no definite sources of income
indentified to cover the expenditure. Continuous reference is made to the PTISG where
additional funds may be accessed but there is no guarantee that the PTISG will provide
the additional funding required.
840.
Par 4.3:
The articulated vehicles purchased to operate services for the 2010 SWC and services for
Phase 1A are only allowed to operate on dedicated roads in terms of road traffic legislation.
This could be problematic depending on the areas where these vehicles are going to be
operated and in the event that a specific road is declared a dedicated road, the operation of
these vehicles on ordinary road surfaces will result in the deterioration of said roads at a much
faster pace than through ordinary vehicle usage. This in turn will result in additional road
maintenance costs.
841.
Par 5:
The IRT contract structure is going to be very expensive to maintain and run due to the
number of contracts and the fact that some of the services could be rendered by the vehicle
operator.
Due to the fact that additional contracts are created in the IRT contract structure, the real total
cost of operations is hidden in all the contracts. If one compares the existing bus costing and
subsidy, it includes all costs, while additional costs are incurred in the new system with the
introduction of the additional contracts.
842.
Par 5.1:
Clarity is required whether the City intends to establish a municipal entity to manage the IRT.
From the wording used it is unclear whether the City intends to establish a municipal entity.
843.
It is agreed that the relatively high axle loads of fully loaded MyCiTi buses will increase the
general road pavement maintenance costs, but the system has been planned so that these
maximum loadings will usually occur where we have provided suitable new road pavements.
A key element of the business structure is that it permits for greater competition than is currently
the case. International experience suggests that Phase 1A can accommodate two operators
which are large enough to be within the bounds of efficient company size for this industry,
although in the initial period before Phase 1A rollout is complete there will be inefficiencies
arising from small operator size. The intention nevertheless is to work towards a second
operator as early as possible in order to establish the principles of competition.
The choice of separating control centre, station services and fare collection contracts was based
on international experience and the realisation that this would allow a wider range of specialist
firms to participate enhancing quality and competition.
The City is investigating whether to establish a municipal entity and if so, when. This is guided
by legislative processes which must be followed.
Par 6.1:
The directly affected operators may wish to include business partners.
Who are the partners of the directly affected operators referred to under the heading
“Description of contract”?
The objective of the Section 33 process and consultation around the Business Plan is to
optimise the interests of the City. It is not intended to be the mechanism for engaging with the
industry, which is being done through parallel but linked processes. It is inappropriate to seek to
engage at this level of detail within this current process.
The directly affected operators are expected to give up their rights in return for shares in the
companies contracted to operate the new system but no clarity is given as to how many
shares will be allocated to them. This is essential information required by the directly affected
operators in order to make informed decisions about the IRT and the future of its own
business.
Reference is also made to compensation offered to directly affected operators in exchange for
giving up their rights. What is this compensation estimated to be and has this cost factor been
included in the total cost calculations?
Shareholding for directly affected operators in the operating company is only mentioned in
respect of Phase 1A. This principle will have to be implemented in respect of all the operating
Comment on BP and City response Dft4.12 101008.doc
The cost has been estimated and is contained in the Business Plan – see Chapter 9.
The principles incorporated in Phase 1A are intended to apply throughout the system, although
it could be redesigned based on the experience in Phase 1A.
‘Non-exclusive’ in this context means that any of the MyCiTi operators can be required to
operate on these routes. It does not mean that other non- MyCiTi operators can operate on
these routes. One of the merits of the model is that because vehicle operators are paid by
vehicle kilometre, more than one operator can serve a given route. This permits for a level of
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Comments
companies for all the Phases as they are implemented as there will be directly affected
operators affected in all the Phases envisaged in the implementation of the IRT.
City response
competition not possible under current arrangements.
The non-exclusive rights on the trunk routes awarded to the VO’s will have a negative impact
on the whole IRT system. If the trunk routes are non-exclusive, there is nothing stopping
another operator from operating along the routes. This could even result in a situation where
illegal taxi-operators commence operating along the trunk routes. Then one is back again
where the City is at present.
844.
What is “light maintenance” of the depot?
A maintenance policy and plan for IRT Infrastructure, including depots, will be prepared.
845.
In terms of the information available the VO’s are not going to be responsible for fare
collection but are going to be responsible for fare evasion. How does the City envisage this
being implemented? Does this imply that inspectors and/or conductors have to be placed on
vehicles? If so, have the cost implications been taken into consideration or is this to be an
additional cost to be borne by the VO’s?
* Different mechanisms are required for trunks as opposed to feeder routes.
846.
Par 7.1:
The figures do not show a deficit of R510m. See Business Plan for more detail if required.
If the figures provided in the document are calculated it appears that there is a deficit of
approximately R 510M that is not addressed. How will it be funded?
Covering the deficit has been addressed above. National government’s intended source of
subsidy is the Public Transport Operating Grant and it is evident from NLTA regulations that this
is intended to be shifted to the new system and the new system replaces the old.
As mentioned previously, reference is made to PTISG, but there is no guarantee that PTISG
will make any funds available to cover any shortfall that there may be.
Use of PTISG is a temporary measure if required.
No reference is made to how many passengers are currently utilizing public transport; and
The R116m is the cost of the total deficit of all operations once Phase 1A is fully rolled out.
No figures are provided of how many passengers it is envisaged that the IRT will convey; and
No mention is made of the fares passengers will be expected to pay for the new services.
The R116M deficit referred to in the document – is that the deficit for the operations contract or
the total deficit in respect of all the contracts required to run an effective IRT system?
847.
Par 7.2:
The City concedes that in Phase 1A the subsidy requirement will increase from R 55M (the
current subsidy along the Atlantis corridor) to approximately R 116M but at the same time it
contends that subsidies in the other Phases will decrease as these Phases are implemented.
This is an illogical and baseless contention.
848.
There are additional costs associated with servicing only a part of the metropolitan area,
especially one incorporating Atlantis at MyCiTi service levels.
The basis for this contention is the modelling that has been done for the system as a whole.
It is common knowledge that Johannesburg and Port Elizabeth have already commenced with
the implementation of the IRT system.
The system has unfortunately not been in place in either city long enough to draw clear
conclusions. Johannesburg, for example, does not have a proper fare system in place.
It would be interesting to establish from their experience, what the cost implications actually
were when the system was implemented in Johannesburg and how much the system is
costing them now that it is up and running.
The City of Cape Town does not envisage following the same compensation model as currently
planned in PE. Compensation costs are to be borne by national government and it is not
confirmed that national government is willing to finance the PE model.
Port Elizabeth has estimated what the minibus-taxi industry compensation is going to cost
them on a monthly basis. It should be established how many such operators they have
compared to the Cape Town and what the cost implications would be for the City based on PE
compensation model.
Comment on BP and City response Dft4.12 101008.doc
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Item
Comments
849.
Chamber of Commerce
See also from item 127 on page 27 for the Chamber’s comment on the full Business Plan.
850.
City response
The Chamber repeated many of the points in the left-hand column in their comment on the full
MyCiTi Business Plan. Where the same point is made as in the Chamber’s other comment, the
response below is also repeated, rather than merely cross-referring to the earlier response. This
should make it easier for the reader.
Noted
Introduction
The Cape Chamber of Commerce strongly supports the initiative the City Council has taken to
bring about the creation of an effective, modern public transport system.
851.
We have argued for decades that a co-ordinating body was necessary to take responsibility for
the integration of existing public transport operations, improve efficiencies and extend
services, but our proposals for a Metropolitan Transport Authority to do this work have came to
nought. The reason appears to be that national, provincial and municipal interests could not
agree on how to go about the task. Now, prompted by the need to provide services for the
2010 World Cup, the City has taken the initiative and the indications are that the embryo
service created for the event has been well received by the public. We now have an
opportunity to move forward and give Cape Town the public transport service it needs.
852.
Having said this, we have some serious concerns about the model chosen by the City to
create the new era of public transport.
See comment on item 129.
853.
Operating model
In the first place we are concerned that the City has no experience in running public transport
and that it may not have the expertise to do so.
854.
855.
Unlike Johannesburg and Durban, Cape Town has never run a municipal bus service and has
no experience of the heavy losses which those cities recorded year after year. If a history of
losses were part of the City’s institutional memory, we believe there would have been a great
deal more caution in costing the first legs of the new service and we would not have had the
gross underestimate that brought so much embarrassment to the City. In these circumstances
we feel the City should limit its involvement in the new public transport ventures to the
absolute minimum.
The City is not proposing to implement a municipal service. The model is designed to have the
private sector run the service, but within an institutional framework that provides for competition
between service providers, rather than a monopoly.
Our main concern is the decision to create a municipal entity to run the new transport routes
and then to contract four other companies to run the buses, run the fares and ticketing system,
run the fleet management system and yet another company to maintain the bus stops and
stations as well as provide the cashiers and customer service agents. This would effectively
break the service down into five separate parts with no guarantee that the different contracted
companies will be able to work together.
Please see Covering Statement (appears from page 5) regarding this issue.
Comment on BP and City response Dft4.12 101008.doc
The initial underestimate of capital costs has been explained in some detail in reports to Council
and the Annexure to the Business Plan. There was no prior experience within South Africa on
costs related to this kind of project; initial assumptions were based on international experience
within the context of the urgency of meeting FIFA 2010 deadlines. Since the project review and
cost revision projected costs have remained stable.
The approach being adopted here is based on modern, proven business models.
The approach adopted allows ‘best of breed’ capabilities across functions which are clearly
different, and separation of activities where this is logical.
One area that could have been provided by a single company on an integrated basis was the
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Item
856.
Comments
The result will be a considerable management burden on the municipal entity which will have
to deal with possible disputes between sub-contractors on matters ranging from the quality of
the service they provide to their share of any subsidy that might come from the Government,
Province or Municipality. For example there would appear to be a good chance of friction
between the company that controls the fare system and the company which will provide the
cashiers.
City response
Control Centre and Fare System Contracts. The tendering process provided for this; however
the market response demonstrated that these capabilities did not exist in this combination.
Close attention is being paid to integration. The City is considering whether to apply further
resources to thoroughly audit whether the task of integration of the Control Centre and Fare
system is properly implemented.
857.
It is also likely that each sub-contracting company will try to be as profitable as possible and
this might well increase costs rather than improve efficiency.
858.
It is the Chamber’s view that bus operating companies have a better understanding of the
supporting services they require, how to obtain them and how much they should cost than any
new municipal entity is likely to have. We also believe that if the service providers were
contracted to and reported to the bus operating company or companies there would be clear
reporting lines, a reduction in the overlap of responsibilities and a much firmer hand on costs.
This would improve viability, reduce the possibility of conflict and ensure a better service.
This is not a feasible approach. See Covering Statement for an explanation of the logic of the
proposed model
859.
We believe that in creating the infrastructure and purchasing the buses, the City has done its
job and all it should now be required to do is call for tenders to operate the buses with the
successful bidders free to use the service providers and software systems of their own choice.
See Covering Statement (appears from page 5) for an explanation of the logic of the model
860.
Cost
861.
We are concerned about some of the vagueness in the proposal document, particularly on
matters of costs. Municipal bus services around the world require substantial subsidies and
with contributions from the Department of Transport on the decline, we must ask how much
will be needed and where the money will come from. Property rates are already very high and
we would like to know whether the city is planning to introduce new sources of revenue such
as taxes on parking garages or tolls for commuter cars entering the city?
The Business Plan, which was published for comment after the process for comment in terms of
the Information Statement, provided significantly more information.
National Treasury, the national Department of Transport, the Financial and Fiscal Commission,
and various city governments are all applying their minds to long-term funding of public
transport.
The city is in favour of a predictable and sufficient revenue source other than property rates
dedicated to public transport, and recommends that this be a share of the fuel levy. This will
provide a clear and sustained budget envelope within which to address public transport.
The City is satisfied that its exposure to property rates impacts arising from Phase 1A are
manageable. Experience in Phase 1A will determine on what basis the system is rolled out
further.
862.
Concern has been expressed that much justification is based on the notion “the model tells
us”. If the input figures into the model are incorrect, the model will provide the wrong
projections.
Agreed. Extensive modelling has been done based on actual current public transport ridership.
Costs have been refined based on experience from contracting World Cup services from the
local industry.
863.
The Chamber believes it is essential to be open about costs and the possibility of losses
before service providers are contracted. We cannot afford another shock.
864.
The Chamber urgently requests that a detailed summary of costs, incorporating all the
elements of the project, be provided for scrutiny.
The Business Plan, which was published for comment after the process for comment in terms of
the Information Statement, provided significantly more information. More detailed information
cannot be provided without compromising some of the tendering and negotiating processes yet
to be implemented
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865.
Risks
866.
A further major concern is that the greater the municipal involvement, the greater the risk of
yielding to political pressure on matters like routes and timetables. “Popular” decisions would
tend to undermine the viability of the service and the city’s proposals to insulate the municipal
entity responsible for the service from the City Council are not convincing.
The City agrees that public transport is an area subject to populist pressures. However,
ultimately the city cannot absolve itself of all pressures, and given its significantly increased
responsibilities in public transport since passage of the NLTA, must find ways of addressing
these. The proposed model should assist in managing these and would be much improved if
there was a clear and predictable budget envelope as discussed above.
867.
We are also concerned that the proposals fail to deal with the old problem of a lack of coordination between rail, bus and mini-bus services. In fact, it might be argued that the City is
complicating the problem by bringing new operators and services into the picture, making it
more difficult for any future umbrella body to co-ordinate public transport.
The approach proposed is precisely aimed at facilitating co-ordination between modes while
providing for competition between service providers.
The model proposed by the chamber in the paragraphs above will not, for example, allow for
competition within the road-based sector or allow integration of ticketing across modes.
868.
Conclusion
869.
The Chamber would like to stress that we have a great opportunity to create the public
transport service Cape Town deserves but it is essential to get the formula right. We have only
one chance and we cannot afford to blow it.
We agree and are willing to engage with the Chamber and other parties to refine our approach.
870.
Western Cape Provincial government
871.
The Provincial Department of Transport and Public Works and the Provincial Treasury
appreciate the agreement of the City of Cape Town to extend the timeframe for the
submission of comments on the abovementioned aspect to 6 August 2010 from 30 July 2010.
Noted
872.
The Department has interacted with the Provincial Treasury so as to ensure that a
consolidated response is provided by the respective Provincial Government departments. This
letter therefore covers comments raised by both departments, and does not necessarily
duplicate questions or comments which both departments had.
Noted
873.
Department of Transport and Public Works
874.
1. Although the Section 33 process is required for contracts that extend for more than three
years, a more comprehensive assessment of the IRT’s financial implications can truly only be
provided if all contracts are outlined ie contracts less than three years as well as those longer
than three years in duration.
The Section 33 comment process was aimed at specifically meeting legislated requirements.
The Section 33 information document contains information of a much more extensive and wideranging nature than is usually provided in such types of documents, specifically to give the
reader a broader assessment of the overall financial implications. They are not limited to the
specific long-term contracts involved.
However, recognising the need for a more comprehensive view, the City subsequently
published the full Business Plan for comment. The latter document contains sufficient detail
regarding this comprehensive assessment of the financial implications.
875.
2. The executive summary indicates that a key motivation for starting with phase 1A corridor is
that no rail service currently exists. The document does not make any mention of the cost-
Comment on BP and City response Dft4.12 101008.doc
The current goods rail link does link the City with Atlantis but lies well to the east of the main
catchment area in the southern part of the west coast corridor, running largely alongside the N7.
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876.
Comments
City response
benefit ratio of investing in implementing a rail service on the infrastructure that does exist
within the corridor, especially given the increase in costs of the Phase 1A since initial
inception.
To run commuter trains along this corridor would require substantial improvements to this line
and purchasing of additional rolling stock. At present. the demand from Atlantis itself is
insufficient to warrant such investment and operational costs and its location would have
resulted in limited ridership other than from Atlantis. It would thus not have provided any solution
to the key areas of current congestion. The cost of providing off-peak services on an Atlantis rail
line to such a demand profile would result in low service levels with very long off-peak
headways, resulting in a generally unsatisfactory service. The planned IRT solution is much
more appropriate as a public transport solution of passengers along this corridor.
3. At no point does the document make mention of any proposed linkage to the Provincial
tracking or fare management system, thereby not necessarily providing a whole picture of
creating savings for the City of Cape Town.
The provincial system has been investigated with a view to assessing scope for using it and a
report compiled. That report explains in detail why the Provincial tracking system does not meet
the requirements of the City. In addition, Province has no significant fare management system in
place, and it is not EMV compliant (i.e. not fully compliant with DOT’s AFC Regulations.) In fact,
duding September 2010 Province has requested City to share its tender documents for the fare
management services, since province intends to put out a tender in this regard. This confirms
that the City’s approach is supported by those in Province responsible for fare management.
The Provincial tracking system was employed during the 2010 World Cup event and valuable
insight obtained / lessons learnt that have fed into the MyCiti ITS decision making.
877.
4. On page 6 of the document under the Station Services Contractor, a statement is made that
the two categories of cashiers and security personnel are specialized functions resulting in the
contract period needing to be longer than three years. The statement regarding the
specialized functions is questioned.
Both categories of staff will require more skills than conventional cashiers and security
personnel. Cashiers will be responsible for managing all aspects of the operation of the
stations, providing customer information and communications between the station and MyCiTi
management in the TMC where necessary. The security personnel will be skilled in dealing with
fare evasion and other customer functions such as assisting disabled passengers, and acting as
roving security on trunk vehicles.
878.
5. Furthermore in the paragraph on the Station Services Contractor the statement is made that
the contract period must coincide with the periods of the Fare System and the Control Centre
contracts. However the latter two contracts are for a period of seven years each. This appears
to be contrary to the statement of contract periods coinciding.
The period of the station services contract will be adjusted so that its termination coincides with
the termination of the Fare System and Control Centre contracts. The start of contracts may be
at different dates and thus actual contract period may be slightly different.
879.
6. The inference that it is expected that additional funds will be sourced from the PTISG does
not provide certainty to stakeholders that sufficient funds will be available to ensure that the
system is sustainable.
Sourcing funds from PTISG for covering operating costs is a short- term measure for managing
the deficit if it is larger than envisaged. This will allow time for either managing costs down or
accessing additional revenue, using strategies as set out in the Business Plan.
880.
7. The fact that Phase 1 is divided into two parts is mentioned, however at the details of Phase
1B are not outlined in the document.
Correct. This information will be included in the updated Business Plan to be considered by
Council in October 2010.
881.
8. In relation to the research and modelling statements on page 17, a question must be posed
as to the extent to which improvements in the rail system have been modelled in conjunction
with the IRT roll-out and what is the resultant impact on the feasibility and viability of the IRT
with improved rail across the metro.
IRT is intended to complement rail not compete with it, and thus to the extent that rail services
are improved, the viability of IRT would also improve and vice versa. The feeder/distribution
service in the central area, for example, will initially be used more by rail trunk users than
MyCiTi users.
882.
9. Further the final paragraph on page 17 makes reference to funding operations from a
combination of fare revenues and a level of subsidy similar to that currently provided. The
original reason taken for rolling out IRT was that it would be feasible with only an infrastructure
/ capital “subsidy” and no operational subsidy.
The original estimate was over-optimistic. However, a reasonable and feasible objective is to
provide a much enhanced service within the envelope currently available from existing bus
subsidies. This provides an ample reason for implementing IRT.
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883.
10. Vehicle Operator Contracts
884.
a. It is noted that the operator will be responsible for light maintenance. Has the City taken
account and budgeted for the heavy maintenance?
885.
b. What incentives have been built in for good and excellent system operation by the
operator?
886.
c. An additional reason for the 12 year period of the contract is the NLTA requirements.
Yes – see the Business Plan.
Agreed.
887.
11. Automatic Fare Collection
888.
a. Given the substantial roll-out time for IRT in totality, is it financially feasible to implement a
smartcard system at this stage, incur the cost of retail networks, etc, when only a very limited
service would be operational in the metro?
The operating costs of a manual fare system quickly outpace those of a smartcard system.
Furthermore the manual system allows far less flexibility. The system being procured is
consistent with the new model and standards set by DoT, which is compatible with new
technology in the banking sector introduced in 2010, and will therefore be able to be extended
to other services. Starting with a more limited area enables the system to be properly bedded
down and configured to needs before it is extended.
889.
b. Too many people are involved in handling cash as the AFCS refers to the contractor
collecting and paying revenue, as well as the Station Service Contractor.
The AFCS monitors the sales and electronic transfer to the City of revenue from a range of front
office service providers, including retailers/ auto bank machines etc, where smartcards can be
loaded. It will not handle and channel any of these funds.
The station service contractor is essentially another of the front office vendors. Again, station
services handle all the cash internal to the MyCiTi system, and regularly pay over the cash
collected to the City through electronic means. Again, the AFCS’s function is not to handle any
cash, but rather to monitor sales and electronic transfers to the City.
890.
c. There is no economic argument provided as to why the contract period should be seven
years.
The main motivation for the relatively long contract period is to ensure continuity of the rollout of
MyCiTi during its first years of existence, given that Phase 1A will occur over three years and
subsequent phases will be in the roll-out stage immediately after completion of Phase 1A.
Changing the stations services contractor at shorter intervals will create disruption and risk the
operational flow of the system while it is in the development stage. It is likely that subsequent
station services contracts will be of a shorter duration.
891.
12. Control Centre Contractor
892.
a. Will the control centre contractor have experts in scheduling and controlling services, is the
contractor not an expert from a software and system development perspective?
The control centre contractor will supply the scheduling software and expertise to undertake
scheduling in term of its contract. During the course of the contract the control centre
contractor’s specialists will establish the system, train MyCiTi staff and hand over the scheduling
tasks MyCiTi staff. Thereafter they will assist where required during the contract period.
893.
b. The economic argument is not provided as to why the contract period should be seven
years, rather than eight or six. Furthermore, it cannot be that the contract period is “about”
seven years.
The principle was that control centre contract (as with other contracts) should more or less
coincide with the termination of the VOC contract which will have a term of 12 years. Thus two
contracts will be let during this period, each notionally being of six years duration. It is
necessary to keep the ITS (station services and Fare system) contracts long enough to maintain
the ITS technology installed, but also provide an opportunity to replace outdated ITS systems in
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a new contract. However, it may be desirable may be desirable to stagger contract termination
dates so that disruption is reduced that would otherwise occur should all the principal contracts
are replaced simultaneously, thus the use of the term “about” seven years.
894.
13. Station Services Contract
895.
a. It is not agreed that general parking management be included – only park and ride.
Noted. The potential of controlling and managing parking in the immediate vicinity of trunk
stations is currently under investigation, and will be pursued on its merits. It is considered that
there may be advantage to passengers and to MyCiTi to encourage parking in demarcated
parking areas attached to MyCiTi stations, and to offer parking concessions. This will serve to
attract more passengers to the system. Lastly, it will help control unacceptable levels of parking
needed by local residents, through a permit system similar to what was provided in Greenpoint
during the World Cup. Parking fees could be collected by the stations services contractor as an
extension of its cash function, and security personnel at stations can also ensure vehicles are
protected.
896.
b. There is no economic argument as to why the contract period should be six years.
See item 890 above for an explanation.
897.
14. Financial Implications of IRT Contracts
898.
899.
a. Section 33 of the MFMA indicates that the municipality may only enter into a contract for a
period longer than three years if the “municipal council has adopted a resolution in which it
determines that the municipality will secure a significant capital investment or will derive a
significant financial economic or financial benefit from the contract.” The document provided
does not substantiate sufficiently the fact that the municipality will derive a significant financial
or economic benefit from entering into the contracts for periods longer than three years.
b. Page 32 refers to the fact that the costs exclude services provided by the City such as
infrastructure maintenance. The statement is made that “because of the nature of
infrastructure investment, these costs are minimal and covered by existing municipal service
capabilities.” This statement is contrary to discussions that have taken place between the
DTPW and the City regarding funding and budgets for road infrastructure maintenance and
the levels of funding available to the City to ensure that the necessary standards are
maintained. It is suggested that the necessary recurrent costs for maintaining infrastructure
are included in the business plan so as to show the total cost of running and maintaining the
Comment on BP and City response Dft4.12 101008.doc
These contracts are complex; thus a longer period is needed to benefit from the capabilities
created. Tendering for a short period will be more costly, since the tenderer will have to recover
investment over a much shorter period. Furthermore, the roll-out of the first phase is occurring
over more than three years. To seek to retender for these services while the first phase is being
rolled out will cause uncertainty and create significant and costly management challenges.
There will be both direct and indirect economic and financial benefits arising from the
introduction of MyCiTi throughout the City, of which Phase 1 is only the first stage. Firstly to
address the direct impacts of Phase 1A contracts, the municipality will determine that significant
capital investment will be made to implement capital projects (bus ways, stations and buses),
this being funds received through PTISG amounting to some R 4,3 billion. Such funding
represents a major investment in infrastructure in the City of Cape Town. There are further
undertakings from DOT that the major share of operating deficit will be funded from National,
and that the contributions form the City will be manageable. The indirect benefits to the City in
having a world-class integrated public transport network (and ensuring that MyCiTi and the
Metrorail system are seamlessly integrated) as is to be undertaken over the next decade will be
significant. While the economic benefits to the City of such a system that replaces the current
unsatisfactory set of uncoordinated public transport operations (bus, taxi and Metrorail) have not
been quantified, these will be very significant over time.
The dedicated trunk routes have been built largely with continuous re-enforced concrete. This
requires far less maintenance than a conventional surface. It was on this basis that the
statement was made.
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system in totality.
900.
The Provincial Treasury’s comments focused on the following issues:
901.
15. The proposed procurement of buses and the “leasing” / “transfer of ownership to
bus operator companies
902.
a. In terms of the cover letter to the Provincial Treasury, the Municipality indicates that it is its
intention to acquire buses which are to be “paid for by the City and owned by the vehicle
operating companies.” In terms of paragraph 1.2 (first bullet) of the Information document
[issued in terms of section 33 of the MFMA – see from page 134] it has been indicated that the
buses will be “leased to the vehicle operating companies”. In page 24 of the information
document a leasing option is alluded to with the ownership of the vehicle passing to the VOs
at the end of the contract period for the VO. It must be noted that if this is the proposed
disposal method then at this stage the requirements of section 14 of the MFMA must apply.
The key issue is that the buses would remain under the ownership of the participating financial
institution until the end of the 12-year contract, at which time they would be near the end of their
useful life. The question at that point as to whether ownership remains with the bank, is
transferred to the city, or transferred to the operators (or whether the vehicles are scrapped) is a
matter of detail to be resolved in finalising contracts.
903.
b. It must be noted further that the Municipality cannot pre-maturely declare an outright
disposal at the end of the tenure of the contract with giving effect to the specific requirements
of section 14 which include consideration of the “minimum level of basic municipal service.”
The municipality has to also consider on reasonable grounds that such assets are no longer
needed to provide the minimum level of basic services; and has considered the fair market
value and the economic and community value to be received in exchange for the asset. A
decision by council is also required on consideration of the above requirements. It must also
be noted that the disposal for all intents and purposes must give effect to the five pillars of
procurement as entrenched in section 217 of the Constitution.
The processes provided for in Section 14 of the MFMA are being followed regarding the
intention to transfer bus ownership to a financial institution which would, in turn, lease the
vehicles to the vehicle operator. Given that at the end of the contract the vehicles will not be an
asset of the municipality, section 14 cannot apply at that stage.
c. Issues around life cycle costing; repairs and maintenance; depreciation of asset value has
not been considered or otherwise reflected in the document
Significant attention has been paid to these matters.
904.
If public transport is deemed to be a ‘basic service’ and section 14 applied on those grounds, a
host of arrangements currently in place around the country would be illegal. This is unlikely.
905.
16. The Municipality’s proposed financial obligations in terms of the contract for each
financial year of the contract
906.
a. In terms of the funding options pitched by the municipality it is evident that it is based on
certain presumptions in respect of availability of funding from different sources.
Assumptions are made, but alternatives are provided if the assumptions are not met. A key
example is the transfer of the PTOG to the service where IRT replaces an existing subsidised
service.
907.
b. Funding is also dependant on decisions to be made that are outside the control of the
Municipality and which vest in other organs of state.
This is true to some extent, and arises because of the system of inter-governmental fiscal
relations in the country. Provincial budgets, for example, are ultimately almost entirely
dependent upon decisions made by the national sphere. Given the consistency of the project
with national government’s intentions, and experience so far, there is a reasonable degree of
confidence that such matters will be satisfactorily addressed.
The city is also proposing a funding stream for public transport which would limit such risks in
future
908.
c. The option tabled in terms of funding the deficit appears not to, for all intents and purposes,
cover the deficit fully.
Comment on BP and City response Dft4.12 101008.doc
This is not correct. A range of scenario’ has been provided for. Under certain circumstances
PTISG would have to be used. This can be done on an interim basis to allow for adjustments in
service levels, etc.
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909.
d. The additional funding option is also preconceived in terms of the transfer of bus subsidies.
The transfer of bus subsidies is mandated in terms of regulations issued in terms of the NLTA.
910.
e. The City indicates that if all options fail/do not materialize then the deficit will be funded
through the transitional PTISG through adjustments made to costs and revenues. It must be
noted that this may impact on or compromise other infrastructure service delivery obligations
that may be funded through the PTISG allocation and upon which such contracts have been
awarded in terms of supply chain and financial management policies.
Use of the PTISG will compromise infrastructure delivery. The risk alluded to here must be
managed.
911.
17. The impact of these financial obligations on the municipality’s future municipal
tariff’s and revenue:
912.
a. The Municipality has not indicated in its information document how this requirement of the
Section 33 requirement is proposed to be dealt with.
913.
18. Determination that the Municipality will derive significant financial economic or financial
benefit from the contract
This is addressed in the information document and in greater detail in the Business Plan
subsequently published for comment.
Financial Analysis:
Capital Cost = R4.3 b
Covered by PTISG = R3.41b
City= R0.38 m
914.
Additional funds required from PTISG?
The City has put in a request for a further R809.9 million for the completion of Phase 1A.
915.
Deficit per year of R116m (R391-R275)? More information is required and how it is built in the
model. The R55million available per annum from bus subsidies will also be key and the
Province would like to see how it is built in the financial model.
The City is not able to reveal all details, since this may compromise negotiations with service
providers. The City is willing to engage with the Province on this on a confidential basis.
916.
It must be noted that it is difficult to deduce the financial viability / economical vitality from the
information document as financial modelling is required in order for the Provincial Treasury to
have an understanding how the Nett Present Value responds to the required discount rate. It
is also difficult to provide constructive comments, given that there is no indication made in the
document in respect of the internal rate of return.
It is not clear that this form of analysis is appropriate under these circumstances. The Province
is welcome to approach the City if it wishes to take this discussion further.
917.
Economic Analysis: A detailed analysis is required in this regard to have an understanding on
how the project responded to economic net present value from an economic perspective.
An economic evaluation was planned as part of the Operational Plan. The Benefit/Cost Ratio for
the Airport-CBD service was calculated to be about 2. This evaluation has not been completed
for Phase 1A.
918.
Stakeholder Analysis: There are various stakeholders in the project and VO’s and other
stakeholders are key in this regard. What benefits will be derived from the project? Or what
return of the investment will be derived?
Please refer to the Business Plan
919.
Sensitivity Analysis: The Provincial Treasury would like to see what risk variables have been
identified as sensitive and how the Net Present Value (NPV) responds accordingly.
Detailed analysis has been done on the risks related to recurrent revenue and expenditure, and
the impact on the projected deficit. However, it would appear that, given the degree of
assumptions required, the type of analysis the Province has in mind here would deliver
somewhat arbitrary results. The Province is welcome to approach the City if it wishes to take
this discussion further.
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920.
19. Term of the Contract and SCM Implications
921.
a. Vehicle Operating contractors-12 years
922.
• How is the calculation/formula determined of the life cycle of commercial vehicles (busses) to
coincide to with contract of 12 years? (Page 2)
The projected life of the vehicles is based on information provided by the industry. Projected
kilometre life was combined with projected kilometres per year to identify a projected year life.
923.
• The commercial vehicle life cycle is further indicated as 1½ million kilometres (page 25). How
is this calculated and is the VO going to reach the required kilometres at the end of 12 years?
See above.
924.
• If the intention of the City is to lease the busses to VO’s and ownership is transferred after 12
years, what financial benefit will VO’s derive from busses? And how will this increase residual
value? Is the city giving commitment to VO’s that busses after 12 years will still be in a mint
condition after ownership? What are the risks for both city and VO’s in this risk and has a
sensitivity analysis been conducted on risk variables? Have the financial cash flows derived
from City been tested against the possible required rate of return for VO’s?
The issue is not a crucial one. The vehicles will be of limited value at the end of the contract, but
the VOs may be able to exploit such value usefully in their next contract, and this gives an
incentive to VOs to ensure that this value is preserved as much as is feasible.
925.
• How does one interpret that the VO’s will after the initial of 12 years be appointed through a
tender process (page 23)? How will they be appointed to commence with the service from
year 1?
The intention is to appoint through negotiations for first round, in terms of the NLTA. The
contract for the initial 12 years is intended to cover services from year one (apart from some
interim services while these contracts are being concluded).
926.
• Is the decision to appoint VO’s for 12 years based on the National Land Transport Act as
defined on page 23 or the life cycle of busses or 1½ million kilometres?
The former.
927.
• What is the correct wording? Leasing busses to VO’s or disposing of busses to VO’s (see
page2).
What happens to the vehicles once they have been used for 12 years and the lease comes to
an end is not a crucial element of the model. One option is to transfer them to the operators.
928.
• How will the city derive benefits if busses are leased or disposed to VO’s and what
procedures will be followed?
This matter is covered in the Business Plan and in a separate process being followed in terms
of MFMA. The overall model that the City seeks to implement with regard to bus ownership is
tax-efficient and guards against the risk of loss of vehicles in case of VO bankruptcy.
929.
b. Infrastructure
930.
In respect of the construction and the maintenance of Depots; how is this being funded?
(page 24)
Grant funded through PTIS.
931.
The Depot will be provided at no cost to VO’s (page 24). However, later in the document it
is mentioned that VO’s are responsible for light maintenance? Was that built into the
financial modelling? (What is meant by “light maintenance” and at what costs and who will
render the service.) Will this be sufficient to carry maintenance cost or will the city carry
the deficit? What has been projected as the costs that the city will be provided in terms of
space for buildings for VO’s?
A maintainence plan will be prepared for IRT depots, which will describe the responsibilities of
the Vehicle Operating companies and the City.
932.
Maintenance has been budgeted for as a percentage of the cost of provision on an annual
basis.
It must also be noted that insurance and all other associated risks has been indicated to
be borne by the City
933.
c. Automatic fare collection contractor: 7 years
934.
• Will this option not create a monopolistic market for the selected contractor and keep out
Comment on BP and City response Dft4.12 101008.doc
The AFC contract will be awarded by Phase 1A, and opportunities will be available for other
competitors to tender for contracts required for subsequent phases. The first of these phases
will go to tender before the expiry of the Phase 1A contract. While certain systems that are to
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competitiveness or place barriers for others to enter? Is it not possible that a maintenance
contract be arranged for other contractors? Will the contractor of the software and hardware
also be responsible for the management and operation of the contract? Will it take three years
to design?
be introduced through the first AFC contract will be universal for subsequent contracts (such as
the functionality of the back-office), opportunities for new improved technologies will be
expected of subsequent tenderers. It is considered that the contractor for Phase 1A must be
responsible for the maintenance of hardware and software systems, as this places a greater
incentive to ensure that equipment and software systems function properly for the whole period
of the contract. It is possible that once the contract expires after seven years a minatenance
contract only could be considered. The intention is that the management and operation of the
contract will be undertaken by IRT Operations, with training provided by the contractor. This will
include certain personnel provided by the contractor to assist IRT Operations until it is able to
operate independently. The contract document requires the contractor to undertake detailed
design of the system within the specifications contained in the contract document, and it is
expected that this will be completed within 3 – 6 months of award. Thereafter, the contractor is
responsible for building the software and banking systems and installing hardware on stations,
in buses, and at the TMC.
935.
d. Control Centre Contractor- 7 years
936.
• Will this option not create a monopolistic market for the selected contractor and keep out
competitiveness or place barriers for others to enter? What are the risks for appointment of 3
years?
See the response to items 933 and 934 for the first part of the question, as this also applies to
the Control Centre contract. Due to the phasing of completion of stations and the ordering of
buses, should the contract be awarded for only three years the contractor may not have
completed the installation of all hardware required for Phase 1A, and certainly a substantial
number of locations/buses may only just have had equipment installed before the three-year
point in the contract is reached. The risk would be that the contractor’s defect liability period
could be outside the contract period, and that the contractor’s presence would be minimal when
problems occur.
937.
e. Station Service contractor- 6 years
938.
• A large number of personnel is required in terms of this option, who is going to provide
funding for the personnel and at what cost? What are the risks of appointment for 3years?
For Phase 1A it is estimated that between 600 and 700 contract staff will be required under the
Station Services contractor, of which approximately 55% will be engaged in security functions,
40% will be cashiers and 5% cleaning/landscaping staff. The funding of the Station Services
contract (and its personnel) will be a part of the operating expenditure of the IRT system, the
balancing of which will be covered by fares, advertising and subsidy. Subject to investigations
currently being undertaken, funds for payment of the Station Services contract may be
supplemented by parking income generated by designated parking bays in the vicinity of trunk
and feeder stations.
939.
20. General
940.
a. Whilst the City alludes to the fact that the possibility of providing the services via one of its
departments was considered, it has not been expanded on the reasoning as to why this option
was not regarded as feasible. It is noted that the Station Service Contractor Contract could be
an ideal opportunity for sustainable job creation.
An internal option would mean (i) a more than doubling of the City’s current staff complement (ii)
that the City would likely operate the services less commercially viable than private operators
and (iii) a business arrangement that would also not be in line with the trends in most
comparable national / international cities. As a result, it is recommended that an internal
mechanism is not a reasonably feasible option and that an external mechanism would be more
appropriate.
941.
b. It is also a concern that the motivation to create requisite skill and competencies over the
term of the contract may predispose the option to create a monopoly or a niche market for a
select few.
It is expected that Station Services tenders will be invited for subsequent Phases of the IRT
system, and this will create competition in the market. While multi-skilling of contract personnel
will be necessary and required of the contractor, the particular skills are not of a highly
specialized nature and with the necessary training the workforce can be easily expanded by
subsequent competing tenderers. Thus it is not considered that the initial Phase 1A contractor
will be in a position to create a monopoly by virtue of having trained personnel with the attributes
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required of the contract.
942.
21. Other issues
943.
a. The City has not indicated how it will mitigate against the potential risk against opposition
from the minibus taxi industry and against the potential risk of violence and all associated
financial implications stemming from it.
The City is taking steps to mitigate against this risk by engaging with the minibus taxi industry,
as it has been doing for over 18 months. All taxi associations in the area are now positively
engaged in the process.
944.
b. The City has not satisfactorily met the requirement that there will be sufficient budget for the
tenure of the contracts as required in terms of section 33.
If costs are too high the City will have to reduce service levels, reducing the number of kms
purchased from VOs. It cannot be assured under all possible circumstances, but under
reasonable assumptions this criterion has been met.
945.
c. It must be further noted that the contracts proposed are centered on the contracts of the
VOs which the Province was not requested to comment on. So for all intents and purposes the
awarding of these contracts becomes pivotal to the process of securing a return on the
investment made in respect of the acquisition of the busses. Therefore the Provincial Treasury
is of the opinion that this request for comments is purely academic at this stage as it may be
construed as a natural consequence for a process already having commenced.
The Section 33 process is required in respect of contracts of duration longer than three years.
The City is complying with these requirements.
946.
It is understood that certain of the questions posed and comments made may be dealt with in
other documents developed by the City of Cape Town, and not necessarily captured in the
Section 33 Information Document.
The documents issued in terms of the Section 33 process are sufficient for this purpose.
However, as indicated, more detailed documentation has been made available.
947.
Should it be necessary, both the Department of Transport and Public Works, as well as the
Provincial Treasury are willing to interact with the City to discuss the comments made and
issues raised in this letter.
Noted.
948.
Individual procurement-related responses
949.
R Josias (Seastreams CC), Mamre
950.
I wish to apply for the vehicle contract offered by MyCiTi. Would you be so kind as to forward
all information or if we could arrange for a sitting. The company I am starting will be able to
supply a brand new Quantum Bus 14 seater. We can upgrade to more vehicles and employ
various people for our purpose yearly. The company is a member of the Tourism Board and
wish to focus on Tourist. However we can arrange for shuttling of patrons to and from Mamre,
Atlantis and surrounds. The company will abide by MyCiTi rules and system currently in place.
Discussion regarding pricing and branding, etc can be arranged. Your answer regarding this
matter will be of significant value to both parties.
951.
Bob Stanway, previous project manager of the Rea Vaya
BRT project in the City of Johannesburg
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952.
Having recently been through a similar process as part of the Rea Vaya BRT project in the
City of Johannesburg, I was interested to read through the documentation published for
comment by the City of Cape Town in compliance with Section 33 of the Municipal Finance
Management Act.
953.
I was very impressed with the quality and content of the documentation, and I only
picked up a few items that I thought I should note down and send to you as comments in case
they have not been covered either in this Section 33 process, or elsewhere, namely:-
954.
General: In order to fully comply with S33, is it not necessary to also publish the estimated
financial implications of each of the proposed contracts?
City response
Noted.
No, not according to our reading of the MFMA. In addition, if we publish such information, it is
likely to compromise procurement procedures, since companies who tender for future contracts
would have access to the City’s estimates as to these contracts. This would undermine the
procurement objective of obtaining the best price for a quality product / service.
955.
[Vehicle] Operator Contract
956.
Clause 4 - Appointment:: It is assumed that the contract will be awarded in terms of a
negotiated contract provided for in the National Land Transport Act, however the authority for
the City itself to enter into a negotiated contract would also need a deviation from the normal
Municipal Supply Chain Management regulations.
Agreed.
957.
Clause 6 - Duration: This clause provides for a new appointment after 12 years. Should there
not be mention of the important employment obligations provided for in the Tripartite Heads of
Agreement between Labour, Government and the Bus Industry?
Agreed – reference will be made to this in the final Business Plan. (!)
958.
Clause 14.2 - Escalation: If it is intended to cover a constant proportion of operating costs via
fare revenue, then it would be important to also include a similar escalation provision in the
City’s annual tariff setting process to allow for the users’ fare to be adjusted.
Tariffs will be increased annually through the usual tariff review process.
959.
Fare System 2B
960.
If not already provided for, it would be important to require the tenderer to propose and
motivate for an estimated number (and locations) of various off-station and off-bus points of
sale.
This has been provided for.
961.
If not already provided for, it would be important to require the tenderer to guarantee that
integration will be possible with all the other IRT ITS systems, like the Control Centre, TETRA
etc, and to specify the costs….especially if different tenderers are appointed for the different
components.
This has been provided for.
962.
C2.2 Schedule of Quantities
This is being finalised through engagement and negotiation with the preferred bidders.
It is not clear whether the manner and specific prices obtained will be sufficient to fully
evaluate the relative implications of both the capital and full operating cost implications of
alternative tenders based on the estimated number of transactions, number of points of sale,
etc.
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963.
Station Services
It is noted that the tenderer will also be responsible for cash handling and deposits. In order to
minimise the possibility of fraud, there could be benefit in managing this cash handling and
deposits function via a third party separate from both this tender as well as the AFC tender.
City response
Various options were considered during developing the Business Plan for MyCiTi, resulting in
the model to be introduced in Cape Town. This is largely based on international experience and
has further already been implemented in Johannesburg’s BRT system. The cash will be
collected by stations services staff at kiosks and possibly from vending machines. The cash
collection function, while a responsibility of the station services contractor, will in all probability
be under taken in practise by a third party specialist subcontractor. This model ensures that the
AFC contractor is responsible for collecting all the information on the amount of fares that
should have been collected, indicating the amounts the station services contractor must pay to
the City. Thus they are independent checks on each other.
964.
Sibanye Bus Service
965.
We have become aware that the City of Cape Town is seemingly now in the process of
implementing the Integrated Rapid Transit Project and, in this regard, issued a document
dated 25 June 2010, under the title ‘Information Document as required by section 33 of the
Municipal Finance Management Act’.
966.
We will, in due course, comment on the content of the above document but, for the present,
reserve all our rights in this regard.
No further written comment was received within the timeline for public comment.
967.
We record that the implementation of the IRT System in the City of Cape Town may adversely
impact on our rights as an existing bus operator within the jurisdictional areas of the City of
Cape Town.
Preferred participation as a shareholder in the vehicle operations will be offered to Sibanye, as
has been made clear since end 2008. The basis upon which this is proposed to happen is set
out in Chapter 10 of the Business Plan.
968.
We want to formally enquire whether the statutory prerequisites for the implementation of the
IRT System, contained in sections 36 and 38 of the National Land Transport Act 5 of 2009,
have been adhered to and observed by the City of Cape Town.
The City will adhere to all relevant legal requirements, and processes are underway to ensure
this.
969.
Schaapkraal Civic & Environmental Association – SCEA
Nazeer Ahmed Sonday
970.
SCEA is a ratepayers’ and community based organisation operating in the Philippi
Horticultural Area- PHA- which makes up most of ward 80. The PHA is surrounded by
Mitchell’s Plain, Strandfontein, Pelican Heights, Pelican Park, Eagle Park, Lotus River/ Grassy
Park, Ottery, Hanover Park, Samora Machel, Brown’s Farm.
971.
The PHA is bordered by 3 main roads namely Lansdowne Road, Vanguard Drive and
Strandfontein Road. Because of its geographical size and location on the Cape Flats, the PHA
is subjected to ever increasing volumes of traffic annually.
Noted.
972.
The importance of the PHA for Cape Town
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973.
The PHA is of strategic importance to the city. It provides 70% of the fresh produce consumed
by the people of Cape Town (recommendations of the Philippi Horticultural Area task team,
07.08.2009).
974.
The PHA is also vital in view of the expected effects of climate change on water and land
resources in the Western Cape in the future. According to the International Panel on Climate
Change, scientists identified the need to protect underground water resources as a response
measure against imminent climate change, to secure water for food production and domestic
use. The Cape Flats aquifer under the PHA can potentially supply two thirds of the basic water
needs of Cape Town (Segun Adelana and Yongxin Xu: ‘Contamination and Protection of the
Cape Flats Aquifer, South Africa’ in Groundwater Pollution in Africa, UNEP, 2006).
975.
It is clear from a food security point of view; the PHA plays an important role in supplying Cape
Town with fresh and affordable vegetables currently and in the future. In the light of the abovementioned studies, it is therefore important to protect the PHA as a food producing area.
City response
Noted.
976.
The benefits of the R300 extension for the PHA and the Cape
Flats
977.
The R300 extension will benefit communities in the PHA, on the Cape Flats and as further
afield as the Southern suburbs, Northern suburbs and the West Coast region. This road will
improve transport networks and facilitate better integration of BRT routes.
978.
The R300 extension will protect food production in the PHA. The absence of the R300
extension is a major cause of crop theft in the area and this impact negatively on the safety
and security of farmers and farming operations in the PHA. This road has the potential to
become a secure border for farmland in the north and redirect traffic away from farming
operation in the PHA.
979.
The R300 extension will integrate the PHA in the larger Cape Flats. This will place local and
surrounding Cape Flats communities in a better position to benefit from the BRT system and
the City’s Integrated Transport Project.
980.
The R300 extension will improve traffic movement between the rest of Cape Town and the
Southern Suburbs, coastal areas and recreational areas. This will boost tourism in these
areas.
981.
The R300 extension will lead to improvements to conservation and recreational areas
including coastal areas on the Cape Flats. This will facilitate the building and promotion of
tourism on the Cape Flats.
982.
Currently numerous deaths and injuries are occurring annually on inadequate PHA rural roads
as a result of increasing traffic volumes. The building of the R300 extension will prevent this
carnage.
983.
The building of the R300 extension will improve political stability on the Cape Flats.
Comment on BP and City response Dft4.12 101008.doc
The City’s road network plan covers your concerns accordingly. Your comments are noted and
will be forwarded to relevant department.
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984.
The building of the R300 extension will create greater local economic activity on the Cape
Flats and facilitate and improve socio-economic conditions of local communities where
unemployment is high.
985.
The building of the R300 extension will encourage greater investment on the Cape Flats.
986.
The upgrade of Strandfontein Road from Baden Powel Road to the N2
987.
The upgrade of Strandfontein Road from Baden Powel Drive to the N2 offers an exciting
opportunity to integrate the BRT system and the development of a viable and much needed
mixed-use and high density corridor. This will showcase the effectiveness and benefits of the
IRT project to improve the lives of local communities, create investment opportunities, improve
housing densification, encourage local economic activity and create thousands of new
sustainable jobs.
City response
988.
The benefits of developing the IRT in conjunction with
Strandfontein Road upgrade
989.
This will benefit many communities along the road and further afield including Mitchell’s Plain,
Strandfontein, Pelican Heights, Pelican Park, Eagle Park, Lotus River/ Grassy Park, Ottery,
Hanover Park, Samora Machel, Brown’s Farm, Lansdowne, Wetton, large parts of Athlone
including Rondebosch East, Crawford, etc.
Noted.
990.
The IRT will be optimally used and transport networks can be easily aligned in all local
communities using the road.
Noted.
991.
The upgraded Strandfontein Road could become a high density mixed use housing/ economic
zone with integrated development that will allow for work, live and recreational elements
supported by the IRT transport network.
992.
This will attract investment and create thousands of jobs.
993.
This will improve the recreational and conservation areas on the Cape Flats such as
Zeekoevlei, Edith Stevens Wetland Park, Rondevlei and others.
994.
The Cape Flats pristine and under-developed beaches will attract interest and investment.
995.
This will promote the development of tourism on the Cape Flats.
996.
This will encourage political stability on the Cape Flats.
997.
Conclusion
998.
As outlined above, the development of the IRT Project on the Cape Flats is vital for growth
and socio-economic development. The prioritization of the BRT system is essential for the
R300 and Strandfontein Road. This is also in the interest of Cape Town and should become a
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Noted.
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priority for phase two as envisaged by the City.
999.
The benefits of the IRT and BRT for the PHA and the Cape Flats are overwhelming. It will be a
significant public investment on the Cape Flats and also holds many benefits for the local and
provincial economy, the environment and for tourism. .
1000.
Noted
Noted.
Mode of transport
Carbon emissions/ Passenger (kg)
Car
36.6
Train (full)
5.2
Bus (full)
4.3
Source: written parliamentary answer in the UK in 2006.
Bus travel as opposed to car travel will save 88% of Co2 emissions.
Capital investments in busses are far more productive:
Bus emits less pollution.
Reduction of cars on the roads will save the economy billions because of traffic jams and
foreign exchange.
Congestion on the roads will improve.
Bus travels are safer.
Death and fatalities on roads will reduce dramatically.
Savings to the state in road deaths and accidents will mean more money will be available
for social spending.
1001.
UK transport analyst Lynn Sloman has developed the 40:40:20 concept:
Noted.
40% of current car journeys could be made by means of public transport, bicycle and on
foot.
40% of journeys could be made by public transport and bicycle/ scooter if facilities are
improved.
20% of car journeys cannot be swapped.
1002.
The South African Chamber of Commerce and Industry –SACCI- released a statement in April
2010 in which it estimated: Traffic congestion conservatively costs the South African business
R15 million an hour.
Noted.
This estimate does not include fuel and vehicle maintenance costs, the cost of late freight
deliveries, or other associated transport and business opportunity costs.
It also does not include costs related to accidents and collisions.
1003.
If drivers are convinced to swap cars for public transport, billions could be saved annually and
the Co2 emissions will be reduced by 70%-80%. Governments need to invest in public
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Noted.
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transport rather than building infrastructure for the private car.
1004.
Western Cape Provincial Taxi Council
Tim Wright on behalf of Vernon Billet. WCPTC
1005.
IRT in General
1006.
We support the concept of an improved public transport system and that IRT (amongst
the fleet mix) has a role to play in the improvement of transport services to our
commuters.
1007.
The COCT has not properly addressed the definitions of “affected operators” or the
implications of change and therefore not included the impacts on previously disadvantaged
operators in planning. We are ALL affected by plans to rationalise or grow services. We wish
to be made aware of, be included in planning, and eventually participate in each and every
opportunity that utilises public funding to affect our current plans and future potential to
develop operations
There are two categories of affected operators, viz. directly affected and indirectly affected
operators. Directly affected operators are described in par 6.2, footnote 9: “directly affected
operators, who are those whose services are proposed to be replaced by a particular phase of
MyCiTi, whose legal rights are affected and who have agreed to surrender their operating
licence and operating vehicle.” Indirectly affected operators are those whose routes partially
overlap with the IRT routes. They will not be required to surrender their operating licences and
vehicles, but will be required to truncate their routes and have their operating licences amended
to exclude the portion of the route that overlaps with the IRT route. In this instance they will be
compensated accordingly. In some instances (on certain routes) indirectly affected operators
will have the option to continue to operate alongside the IRT system but without being offered
any compensation.
1008.
We believe (based on observations of current status) that COCT has wasted taxpayers money
or at least not optimised spend as a result of having to comply with FIFA municipal
requirements which leave limited benefit in terms of legacy:
For the World Cup service the City had to deliver services in terms of FIFA or Record of
Decision requirements. The City believe that it delivered these services successfully given the
myriad of logistical, administrative, financial and procurement process constraints confronted at
the time.
1009.
From the outset the wrong vehicles were chosen. These vehicles required massive
infrastructure investment when there are options better suited, fit for purpose and requiring
substantially less investment (of the order of billions of Rands). To try and justify this fact after
the mistake has been made is irresponsible.
The vehicle swere specified as appropriate for a BRT system taking into account the desired
infrastructure requirements and constraints.
1010.
IRT has its priorities wrong – it has been implemented on inappropriate routes where there is
no need for the service
It is acknowledged that the metro south east is the prime focus for public transport investment,
but the reasons for selecting the first phase are fully documented and explained in the Business
plan.
1011.
Hundreds of millions have been spent on consultants because COCT does not have the
expertise. Why were operational experts at grass routes levels (ourselves, other operators e.g.
GABS etc) not employed as part of the consultation / planning process?
Since it was the first time the concept of BRT was being introduced in Cape Town (and South
Africa), specialist BRT experts which were not available in this country had to be engaged.
Other local consultants also had to be engaged for the design work, as is the case with all major
projects, not because the City does not have the expertise, but because of the personnel
resources required for a project of this magnitude. On the industry transition side the City has
engaged experienced industry specialist to assist with the process of engaging and consulting
the industry. When the City employs consultants, they may not have a personal vested or
conflict of interest when working on projects.
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1012.
Who at COCT is responsible for these decisions and what levels of accountability are in place
for these blunders and to ensure that they are not allowed to continue?
All procurement decisions follow the City’s procurement policy and processes which is full
compliance of the Municipal Finance Management Act. The procurement process is a very
transparent process and Bid Adjudication Hearings, where appointment reports are considered,
are all open to the media and public.
1013.
Contrary to promises made to National Government, IRT as it is currently implemented and
contemplated, will cost more (not less) in Government subsidies
National government (Departments of Transport and Treasury) are fully aware of the increased
cost of the project and the fact that Phase 1a will require additional operating subsidy. A
detailed report on these facts have also been presented to Council in October 2009 which
resulted in a slowing down of the project implementation to match available funding. This
process of making the Business Plan available to the public for comment is a way of advising
ratepayers and tax payers of the capital and operating costs of the project.
o
Has National Government been advised of the deviations from the initial
recommendations?
o
When will these facts be made available to the public/taxpayers/ratepayers?
1014.
We have never been afforded the opportunity to review/comment on integrated transport as
we have never been provided the detail or regularly and consistently been part of the planning
teams as required by law
The Integrated Transport Plan (ITP) is a statutory plan prepared by the City’s Transport
Department (as the Transport Planning authority). This plan is produced once every 5 years and
updated annually. Extensive public participation and consultation around the ITP took place,
including the taxi industry. These processes have all been documented. For more detailed
information on the participation process for the ITP, please contact the city’s Transport
Department.
1015.
The dynamics of the Western Cape requires an assortment of logistics and fleet mix including
rail/assorted buses/mini bus/metered taxis according to the routes, demographics and
financial circumstances of passengers. Because of the potential overlaps we believe that it is
critical to include ALL operators in planning discussions so that impacts can be understood
and agreements put in place that enable the integrated vision to function
This is exactly what the ITP is aiming to achieve through engagement with all the roleplayers.
1016.
Detailed plans have not been provided to us so it is not possible to comment on the future
save to say:
If the same levels of competence and strategic thinking are allowed to continue to be
applied to future planning then the potential value of integrated transport will not be
realised and costs will continue to escalate and prevent IRT from being implemented
beyond the initial phase
If the contracts currently in place are extended then we will oppose these developments in
the strongest possible terms
1017.
If the same levels of competence and strategic thinking are allowed to continue to be applied
to future planning then the potential value of integrated transport will not be realised and costs
will continue to escalate and prevent IRT from being implemented beyond the initial phase
The Systems, Business and Infrastructure planning of IRT is very complex and must be
undertaken in an integrated way. Whilst it may be easy to point out weaknesses or
shortcomings on one aspect of the project, the Project Team needs to consider the impact on all
dimensions of the project when decisions are taken.
1018.
If the contracts currently in place are extended then we will oppose these developments in the
strongest possible terms
The IRT 12 year VehicIe Operator contracts or any interim vehicle operator contract will be
negotiated with the affected taxi and bus operators in Company A and Company B
1019.
Comment to IRT Plans (as provided on the COCT website)
1020.
If this is the extent of the current plans then the process should be halted immediately while
proper planning and financial feasibilities are put together as the basis for comment.
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1021.
General
1022.
1023.
1024.
Comment on the information document as required by section 33 of the Municipal Finance
Management Act:
o
o
Insufficient detail and information is provided regarding cost implications and benefits
of the envisaged services. The business case (usage etc) cannot be ascertained and
therefore it is not possible to make informed comment
Of particular concern is the inability to establish risks from the data provided with
respect to potential issues that are not addressed and their impact on the cost
structure. Details provided are too vague with no specifics.
1025.
-
No proposed budget included (? capital costs of any of the other Phases; ? more or
less than the estimated R4 billion of Phase 1?)
1026.
-
Why is this information so vague? The data provided for other contracts (e.g.
Cleaning) is there – does this mean that COCT does not know or want to publicise
detail for the potentially higher cost of the implementation of IRT. Given the
wastages on Phase 1 surely this is a high risk to National and Local treasury?
1027.
What is the transport plan? Where is it? We need to see it before any meaningful comment
can be made. The “background information” supplied is deficient. Proper detail should be
supplied in order for current operators as well as the public to properly understand the full
implications and then comment constructively.
The s33 document should be read together with the full Business Plan, which provides more
details.
Detailed figures per operational contract cannot be provided, since this will undermine an
appropriate negotiation and tender process regards the relevant services.
Comments from National government and other key national stakeholders have confirmed that
the level of detail provided in the s33 document is sufficient, and in fact that the s33 document is
a document which can serve as an example to other cities.
See the City’s approved Integrated Transport Plan – obtainable from the City’s website or
directly from the City’s Department of Transport.
1028.
Specific comment
1029.
“Existing minibus-taxi and scheduled bus operators are able to be accommodated
competitively within the new system providing opportunities for economic empowerment of
informal service providers.”
This statement refers to the affected minibus-taxi and scheduled bus operators. The broader
bus and taxi industry not affected by the implementation of IRT will continue to operate as they
do now.
This is not true – unless the COCT intends to change its current modus operandii then it is
misleading the public because it has continued to mislead the mini bus taxi industry
1030.
Who are the directly affected operators referred to under the heading “Description of
contract”? What is the basis for this definition? What national approval has been granted to the
COCT to use this as the basis for strategy?
As indicated in the Business Plan par 6.2, footnote 9: “directly affected operators, who are those
whose services are proposed to be replaced by a particular phase of MyCiTi, whose legal rights
are affected and who have agreed to surrender their operating licence and operating vehicle.”
1031.
Where is the detail re the equity participation of the WCPTC? What compensation is offered to
our members if they chose not to participate?
The affected members will have the opportunity to participate and receive compensation in
terms of the transition and compensation mechanism described in the Business Plan
1032.
Yes, the City has, or is in the process of complying.
Legal issues
o
Has the COCT considered all legislative requirements and procedures to implement
the IRT? Has the COCT considered and complied with all implications of the new
NLTA, National legislation and the Constitution?
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o
City response
If not, what other legislative requirements have to be complied with?
1033.
Phases - clarity required
1034.
o
Does Phase 1A include Atlantis
Yes.
1035.
o
What is Phase 1B?
Will be detailed in the update of the Business Plan, to be submitted ito Council in October 2010.
1036.
Benefits v Current operations
There seems to be a selling job being done that is misleading, based on selective information
that does not look at pro’s AND con’s:
The Business Plan is not intended to be a discussion document about whether or not to adopt
BRT, but a document indicating how BRT is to be implemented. Nevertheless, the document
does not seek to avoid raising problematic issues. Section 2.6, for example, sets out those
elements of the system which enable BRT to operate more cost-effectively than alternative
services but also lists those elements which increase costs compared with other services.
1037.
o
Comments made would indicate that the COCT does not understand the dynamics of
existing service provider delivery and the commercial realities of subsidies
It is not possible to respond to this unless the commentator is more specific about issues to be
addressed.
1038.
o
What is the basis for comparative comments re the benefits of BRT v the existing
services?
Comparative comments are based on international experience; more recently initial elements of
the Johannesburg Rea Vaya system have been implemented and proven highly successful
1039.
o
No mention is made of the negative aspects of the BRT experienced in other countries
that have implemented this system
International experience has been largely very positive, which is why there is such a rapid
proliferation of such systems on all continents, including various initiatives in Africa.
1040.
o
No mention is made of the estimated fares and fares increases required to sustain this
type of service
The fares are explained in the Business Plan. However, this is now under review with a more
differentiated structure intended to be implemented.
1041.
o
COCT claims BRT is the most suitable solution to public transport problems in the
“context of lower density South African cities”. International implementation of the BRT
system shows BRT to be most effective in a high density environment.
All transport systems are generally more cost-effective in higher density contexts. BRT has
proven very flexible in that it can accommodate high passenger volumes but, unlike rail, can
operate reasonably cost-effectively at quite low volumes. Thus it is better suited to South
Africa’s highly peaked demand. It is correAt very low densities systems such as minibus taxis
may operate more effectively as feeders to the trunk routes
1042.
Do COCT plans for IRT address the areas where immediate relief are required? The current
strategy in vehicle procurement would tell us that this is not the case
This point is not clear.
1043.
Feasibility and viability (business case)
1044.
The additional operational costs are not fully explained. How will they be financed?
See the Business Plan.
1045.
Comments made re subsidies over and above fare revenue are unclear and misleading. Our
information tells us that IRT can be as much as 100% more cost than current services.
This may be the case on some corridors. The Business Plan provides a strategy on how the
costs will be covered – re PTOG see par 9.6.5; Rates to the amount of R65m, par 9.6.6. Longer
term strategies are set out in par 9.8.
1046.
Budget deficiencies and underpinning by PTISG? Is the funding support from the PTSIG
guaranteed? If not, what are the terms and conditions and is funding guaranteed against
them?
PTISG grants for the City is now guaranteed until 2012/13, re the amounts gazetted in DORA
(ito s 8(4)). The grant framework of PTISG in DORA 2010 states that the grant is expected until
at least 2020 in support of the Public Transport Strategy.
1047.
No evidence of sustainability
The City’s Integrated Transport Plan vision is the move towards sustainable transport that
Comment on BP and City response Dft4.12 101008.doc
Page 127
128
Item
Comments
1048.
o
What is basis for claims re the switch from private vehicle to public transport
1049.
o
What about the areas where people already rely mainly on public transport
1050.
o
What is the strategy and what are the additional (excluded) costs in compensation to
be paid to minibus-taxi operators
1051.
o
The IRT contract structure is going to be very expensive to maintain and run due to
the number of contracts. Multiple operations and additional contracts are contemplated
in the IRT contract structure which is inefficient and hides the true costs of operations
1052.
Phased roll-out with numerous companies in each phase lacks
1053.
o
Economies of scale
1054.
o
Management capability (to many too expensive, to do the job properly): Executives;
Operations
1055.
o
Technical resources: Planning; Servicing and support
1056.
o
Size optimisation issues
1057.
City response
pursues more sustainable means of transport and challenges the current reliance of the private
car. For current captive public transport users, the IRT will provide a more quality service which
will improve convenience, safety and reliability.
It is intended that once the system is fully rolled out across the metropolitan area it will result in
four or five companies competing for approximately 20 contracts. This structure will be able to
capture both economies of scale as well as provide a competitive environment. However this
will take some time to emerge.
It is important that there be some competition in the initial phase – hence the creation of two
companies. During the initial period of phasing in of Phase 1A there will be some additional
costs arising from having two companies serving a small market, but these additional costs will
diminish as the phase is implemented. Part of the motivation for having two companies initially
is to enable current industry service providers to be more easily accommodated.
Because they are smaller companies: Less resource; Inability to cross subsidise operations;
Limitations of human capital development throughout structure; Less capable of financing
requirements; Capital equipment and central resource optimization.
1058.
IRT Contract Issued to Trans Peninsula Holdings
1059.
We have been advised by the current Mayor that this contract would be made available for us
to scrutinise (February 2010). When this was not forthcoming we requested to receive this
contract under the Access to Information Act. COCT has continued to deny us our rights to
receive it. This is a poor reflection of COCT intent to transparency.
1060.
Therefore we are unable to comment re any specifics of this contract
1061.
In general:
1062.
o
We are opposed to the award of this contract or any extension thereof
Noted.
1063.
o
We consider the COCT to have acted illegally in excluding us from the process and
choosing to negotiate directly with TransPeninsula. We have voiced our objections to
COCT’s policy in this regard and continue to be ignored
The City is satisfied that the award of the contract was fully lawful and appropriate.
1064.
1065.
The request was dealt roughly with within the prescribed timelines. Firstly, the request referred
to the wrong report – which report was provided within 30 days. An objection against releasing
the data was registered, and had to be dealt with through an appeal process. It is understood
that legal services have ruled that the contract must be provided, and that it was provided
already.
AFCC Contract
o
An agreement is in place between SANTACO and National Government for the mini
bus taxi industry to supply this system
Comment on BP and City response Dft4.12 101008.doc
The award of the tender falls within the area of decision-making of the City.
Page 128
129
Item
1066.
1067.
Comments
o
City response
COCT tender does not acknowledge this fact and therefore should be withdrawn
WCPTC Plans
1068.
o
In stating the above it is clear that we disagree with and will oppose COCT’s current
strategies on IRT
The WCPTC has been consulted about the present model. If it does not support the model, this
is noted.
1069.
o
We have various solutions that will enable us to participate and that should be heard
and included in future planning.
The City fully intends to engage with the WCPTC on an ongoing basis, if the Taxi Council is
interested. This consultation could focus on issues left open in the business plan, and on future
phases.
1070.
Xpress Computers, Langverwacht
1071.
The invitation to render public comment on the above-mentioned contracts has reference. As
stated our comments at this stage is of a preliminary nature and a comprehensive
commentary will be forwarded to you soon.
1072.
The content of the proposed multi-year contracts for the My CiTi Integrated Rapid Transit
System has been perused and considered. However, notwithstanding that mentioning was
made of stakeholders, inclusive of Minibus and Bus Industries were consulted is not uphold by
the writer. Reference is made to the recent Prospectus issued by the City to Phase 1A 2009.
1073.
It has been observed that the City did contract the services of an Operator during the recent
Soccer World Cup and MyCiTi busses were deployed for a limited period. As agreed the
opportunity to provide a collective input around the inclusion of the said SMME Bus Operator
as potential operator is still awaited. A timely timeframe should be instituted to fast track our
input which may impact on the all inclusive negotiated contract process.
Comment on BP and City response Dft4.12 101008.doc
The Business Plan and information interms of the s 33 process was published for public
comment, and opportunity was provided for comment.
Page 129
130
Annexure C: City’s preferred model on vehicle ownership, transfer and use
The table below lists the comments received in response to the City’s invitation for comment on its preferred model on vehicle ownership, transfer and use. For the full information documents, published as
part of this invitation, see Annexures E and F, starting respectively on pages 149 and 155.
Item
Comments
City response
Comment on the vehicle ownership model
1074.
Comments on Business Plan from joint workshops with Portfolio
Committee on Finance and Transport Roads and Major Projects: 201007-15 and 2010-08-16
See items 118 and 119.
Additional information is required on the Bus Ownership model that is being proposed
This is dealt with in detail in the Business Plan and in the Information Statements issued
for comment in terms of the MFMA determined processes – see Annexures E and F,
starting respectively on pages 149 and 155.
Requirements of MFMA in relation to asset transfer
1075.
Vehicle Operator Company A, comprising of Golden Arrow, and three
taxi associations based in the Inner City: comments and questions
regarding Business Plan
See item 499.
The options for the ownership of the vehicles/busses need to be discussed especially in terms of the
preferred Option D which the City has. This option mentions ‘credit worthiness’ which the VO’s need to
have, while it remains only a shell at this point with no balance sheet.
“Credit-worthiness” for the VOs will be less of an issue for the financial institution
proposed to own the vehicles, since the funds required to pay for the lease is proposed
to be paid to the financial institution on behalf of the VO by the City – drawing from fares
received and from the interest to be paid by the financial institution to the City upon
funds invested by the City in the financial institution. These funds are generated by the
sale of the vehicles to the financial institution. However, the financial institution is
expected to require of the VOs to take physical and financial responsibility for the
vehicles and any damage caused to them while under the control of the VO.
1076.
Vehicle operator company B grouping, comprising of the Sibanye bus
company and six taxi associations in the Blaauwberg / DuNoon /
Atlantis areas – Comment on Business Plan
1077.
See item 528.
With regard to the vehicle ownership options put forward in the business plan and the preferred model
outlined by the City company B reps wish to note that they will ask for independent advice on the merits
and de-merits of the option preferred by the City and if necessary provide the City with a 5 th option
Comment on BP and City response Dft4.12 101008.doc
The City looks forward to further input on this model from the VOs. However, it expects
to make a decision regarding the preferred model (at least provisionally) through the
adoption of the Business Plan, which decision is expected in October 2010. To give
adequate consideration of alternatives it would be necessary for the City to receive such
input from Company B by 27 September.
Page 130
131
Item
Comments
1078.
Western Cape Provincial government
1079.
Copied from comments on the s33 info document, items 901 to 904 above.
City response
The proposed procurement of buses and the “leasing” / “transfer of ownership to bus operator
companies
1080.
a. In terms of the cover letter to the Provincial Treasury, the Municipality indicates that it is its intention to
acquire buses which are to be “paid for by the City and owned by the vehicle operating companies.” In
terms of paragraph 1.2 (first bullet) of the Information document [issued in terms of section 33 of the
MFMA – see from page 134] it has been indicated that the buses will be “leased to the vehicle operating
companies”. In page 24 of the information document a leasing option is alluded to with the ownership of
the vehicle passing to the VOs at the end of the contract period for the VO. It must be noted that if this is
the proposed disposal method then at this stage the requirements of section 14 of the MFMA must
apply.
The key issue is that the buses would remain under the ownership of the participating
financial institution until the end of the 12-year contract, at which time they would be
near the end of their useful life. The question at that point as to whether ownership
remains with the bank, is transferred to the city, or transferred to the operators (or
whether the vehicles are scrapped) is a matter of detail to be resolved in finalising
contracts.
1081.
b. It must be noted further that the Municipality cannot pre-maturely declare an outright disposal at the
end of the tenure of the contract with giving effect to the specific requirements of section 14 which
include consideration of the “minimum level of basic municipal service.” The municipality has to also
consider on reasonable grounds that such assets are no longer needed to provide the minimum level of
basic services; and has considered the fair market value and the economic and community value to be
received in exchange for the asset. A decision by council is also required on consideration of the above
requirements. It must also be noted that the disposal for all intents and purposes must give effect to the
five pillars of procurement as entrenched in section 217 of the Constitution.
The processes provided for in Section 14 of the MFMA are being followed regarding the
intention to transfer bus ownership to a financial institution which would, in turn, lease
the vehicles to the vehicle operator. Given that at the end of the contract the vehicles will
not be an asset of the municipality, section 14 cannot apply at that stage.
1082.
c. Issues around life cycle costing; repairs and maintenance; depreciation of asset value has not been
considered or otherwise reflected in the document
Significant attention has been paid to these matters.
1083.
See item 924.
1084.
If the intention of the City is to lease the busses to VO’s and ownership is transferred after 12 years,
what financial benefit will VO’s derive from busses? And how will this increase residual value? Is the city
giving commitment to VO’s that busses after 12 years will still be in a mint condition after ownership?
What are the risks for both city and VO’s in this risk and has a sensitivity analysis been conducted on
risk variables? Have the financial cash flows derived from City been tested against the possible required
rate of return for VO’s?
The issue is not a crucial one. The vehicles will be of limited value at the end of the
contract, but the VOs may be able to exploit such value usefully in their next contract,
and this gives an incentive to VOs to ensure that this value is preserved as much as is
feasible.
See item 927 and 928.
What happens to the vehicles once they have been used for 12 years and the lease
comes to an end is not a crucial element of the model. One option is to transfer them to
the operators.
What is the correct wording? Leasing busses to VO’s or disposing of busses to VO’s (see page2).
1085.
If public transport is deemed to be a ‘basic service’ and section 14 applied on those
grounds, a host of arrangements currently in place around the country would be illegal.
This is unlikely.
How will the city derive benefits if busses are leased or disposed to VO’s and what procedures will be
followed?
Comment on BP and City response Dft4.12 101008.doc
This matter is covered in the Business Plan and in a separate process being followed in
terms of MFMA. The overall model that the City seeks to implement with regard to bus
ownership is tax-efficient and guards against the risk of loss of vehicles in case of VO
bankruptcy.
Page 131
132
Item
1086.
Comments
M Havenga
This sounds like a merry-go-round of cash flow. The City buys the (bus) (s) – “sells” the bus (s) to a
Financial Institution who “leases” the bus (s) to a Vehicle Operator and at the end of the day the City
pays all the costs of the Vehicle Operator.
Looking further to point (e) The Vehicle Operator then “pays” the Financial Institution with the money that
the City “paid” the Vehicle Operator!
This sounds rather like a mickey-mouse cover-up movement of Tax Payers money and at the end of the
day the only “Institution” who set up any funding was the City when the City purchased the bus (s) to
start this round-about moving of money. The only one that will benefit from this is the Vehicle Operator
as the Vehicle Operator will possibly secure capital for his/her pocket by means of ticket sales. All other
expenses will be paid for by the City to the Vehicle Operator to the Financial Institution.
1087.
1088.
City response
This arrangement has specifically been entered into to ensure that the buses procured
through public funding are well maintained and remain available for the provision of the
service.
The fare revenue is used by the City to offset costs related to the provision of the public
transport service and is not directly attributable to the Vehicle Operator. The expenses
for the operator will arise out of obligations put on the Operator through the contract
entered into with the Vehicle Operator.
The tax arrangements are legitimate steps to improve tax efficiency.
National Treasury
We would appreciate an opportunity to explore further the question of the ownership of the busses and
the proposal to sell these assets to a financial institution. It is not clear to us that this is preferable to the
establishment of an entity through which the city owns the busses and exercises full control over their
allocation and reallocation to operators, within the framework of the evolving transport plan. (From a
public policy point of view, the tax advantages of the leaseback option have to be disregarded – we gain
nothing collectively from an arrangement structured to benefit a particular public authority at the expense
of the wider fiscus, even if these benefits are partially returned to the city or commuters.)
See comment to item 827.
1089.
General comment offered (unrelated to the vehicle ownership
model)
1090.
B M Sing-Jam
Peak Period: R5 + 0.30 per km travelled (to a maximum of R16)
Just wanted to enquire to how much the bus fare will be along the Table View route.
Off – Peak Period: R4 + 0.30 per km travelled (to a maximum of R15) [#Insert actual
fare in terms of existing model.]
1091.
H Wilmot
As a staff member of the City, I would like to suggest that the unserviced Northern suburbs, be
considered on a trial period.
No alternative to Metro Rail as Public Transport is currently available, and the service is so appalling that
many frustrated City Employees arrive at work late, and then have to utilise their annual leave to make
adjustments to the Time and Attendance statements. This unacceptable service from Metro Rail really
needs to be addressed.
Comment Noted. Unfortunately this area is not part of Phase 1a and will be included in
Phase 3 accordingly. The city will continuously review the full phase roll-out to assess if
needs are addressed accordingly. Comments will be forwarded to officials responsible
for planning and engagement with rail.
The Office of Mr Robin Carlisle will also be approached about the Brackenfell, Kraaifontein area, with
Comment on BP and City response Dft4.12 101008.doc
Page 132
133
Item
Comments
City response
only Metro Rail as Public Transport.
1092.
The City wants to encourage people to make use of Public Transport, and discourage private vehicles
entering the CBD daily.
Noted and will investigate. !
The City as Employer should stop providing parking to ALL staff with private vehicles. Many Staff
members have parking reserved at minimal cost for many years.
1093.
J Valentine
S A Road link luxury busses will be a good investment should they be interested.
1094.
M Demas
It worries me that that currently there is no work for the buses (MyCiTi).
I haven’t used it yet, but if I may make a proposal, there are currently a lot of vehicles on the main roads,
like the N2. From Strand and Somerset West, especially in the morning there is heavy traffic. Why don’t
you use the buses for that route and see what the costs involved will be as well as the income?
1095.
T Thiart
I have been using the Golden Arrow bus service for many years to and from Table View. I will make use
of the new MyCiTi service on condition that it is very near the weekly/monthly fare I pay at present to
Golden Arrow. I am not prepared to pay very much more per week/month for MyCiTi.
Furthermore I am concerned regarding the amount of seats available on the new Volvo busses. It seems
the seats are very limited, and I am not prepared to stand to and from Table View. I realize that some of
the seats had to go to make space for wheelchairs, but still I want a seat. If the seating is limited as I
expect it to be, why not put articulated busses on the Table View route.
Only custom-made vehicles will be able to dock at trunk stations, because the doors are
required on the right hand side, and the floor height is higher than usual, to ensure level
boarding.
Comment valid. The City is investigating a Park & Ride initiative with ACSA to attempt to
relieve congestion along the N2. The current fleet have been ordered for purposes up
the West Coast which is planned to commence early next year. These vehicles are
therefore only available in the interim, until these services start.
The proposed IRT fares are currently being critically assessed to ensure that fares are
generally comparable to existing fares, while still ensuring that operational deficits do not
increase unreasonably.
The seating and standing mix has been optimised to ensure ease of movement within
the vehicle. The current bus consist of many seats which results in a narrow aisle.
International best practice supports an optimum mix between standing and seating that
encourages ease of movement for all passengers including wheelchairs. The dedicated
lane will significantly reduce the journey time and there the perceived inconvenience of
standing will be reduced. In addition, there is a significant expected seat renewal rate, ie
those passengers who have to stand in peak time will soon be able to take a seat as
other passengers disembark.
Lastly, buses have dedicated seats for the elderly, pregnant and disabled, which will
ensure that they should always be able to be seated.
Comment on BP and City response Dft4.12 101008.doc
Page 133
Annexure D: Information document – Long term contracts
CITY OF CAPE TOWN
MYCI TI
Integrated Rapid Transit Project
Contracts forming part of
Phase 1A
and that extend beyond three financial years
Information document as required by Section 33 of the Municipal
Finance Management Act
25 June 2010
Notes: Page numbers in the published document (as made available to the public) are given in square brackets as such “[Page 1]”, to
find text that commentators refer to in their comments in Annexure C, appearing from page 103.
1. Executive summary
Cape Town’s Integrated Rapid Transit (IRT) system is a bold initiative to transform the public transport sector over time by integrating all
public transport modes into a vastly improved and coherent system for the user. Among the modes to be integrated are road-based
rapid bus services on trunk and feeder routes, Metrorail passenger rail services, minibus-taxi and conventional scheduled bus services
and metered taxi services. Improved pedestrian, bicycle access and park-and-ride facilities are integral elements of the system.
Forming part of the multi-modal IRT system will be a Bus Rapid Transit (BRT) system, to be implemented as the rapid bus component
of the IRT system. It will consist of a network, provided throughout the City, of trunk bus and feeder bus services that will integrate with
the Metrorail passenger rail services and other modes.
In the long term all public transport modes forming part of the IRT system are proposed to be branded as MyCiTi services. A small IRT
bus service with MyCiTi branding, between the Cape Town airport and the inner city, was introduced in May 2010, prior to the 2010
Soccer World Cup. This is the beginning of the implementation of Phase 1A of the IRT system. Phase 1 is the first of four envisaged
phases to complete BRT throughout the City of Cape Town.
Phase 1A will provide bus services that will link the inner city area with the airport and service a corridor between Atlantis, Blaauwberg /
Table View, Dunoon, Montague Gardens and the inner city (the Atlantis corridor). It includes feeder services in the inner city and
elsewhere in this corridor and includes newly developed high-density residential areas and low-income communities.
A key motivation for starting with this corridor within the City is that no rail service currently exists in that part of the city. The main Phase
1 trunk route intersects with the rail network at Woodstock station. Given the way the City’s rail system functions, all rail routes pass
though this station. This results in the Phase 1 service creating a very significant linkage of the west coast area of the city to the rail
network.
The purpose of this document is for the City to provide information to the public and certain key government departments regarding IRTrelated contracts for a period spanning more than three municipal financial years. This is linked to an invitation to these parties to
comment on this proposal, forming part of a statutory process in terms of Section 33 of the Municipal Finance Management Act.
Four contracts that in combination comprise the operation of the IRT system are proposed to be concluded between the City of Cape
Town and private sector service providers. These contracts are proposed to extend over a period exceeding three financial years. This
is necessary to ensure continuity of service and for financial advantage to the City.
[Page 5]
1.1 The Section 33 process
Where a contract is intended to span more than three municipal financial years, Section 33 of the Municipal Finance Management Act
requires the municipality to provide background information and to invite written comment from the local community, and to write to
specific government departments to obtain their comments. The City is required to initiate the public information process by advertising
the matter at least 60 days prior to the Council meeting at which any of the relevant contracts are to be approved.
1.2 Why the contracts are to extend beyond three years
Reasons differ slightly for each of the contracts, however a common reason is the need for complex operational skills to be built by the
contractors, and contracts of short duration will negatively affect high standards of delivery of their services. Additional reasons are:
135
Vehicle Operating contractors – 12 years
The contract duration corresponds with the expected commercial lifespan of buses, which are to be acquired by the City and
leased to the vehicle operating companies. This arrangement has financial benefits for the City but will also ensure that the
companies maintain the vehicles in good condition.
Automatic Fare Collection contractor – 7 years
The contract involves the design, installation, and establishment of a fare management system over a period of about three years.
This will include access control equipment and a system to provide electronic cards and to top up credit on these cards. Once
installed, the contractor will maintain the hardware and software. The system will further keep detailed electronic records of sales
and use of the system, as a control upon the station services contractor, who will be responsible for sales and access control on
stations. It is important that the installing company remains responsible for the high-tech infrastructure and banking systems it
installs for a significant period, which is key to the financial viability of the system.
Control Centre contractor – 7 years
This contract is similar to the Automatic Fare Collection contract, in that the contractor must install high-tech electronic hardware
and software systems, which require maintenance, replacement and software updates continuously. The system will also keep
electronic records on a range of elements, such as the location and movement of the vehicles, number of passengers physically
boarding vehicles, and a system for fault reporting and tracking of all elements, also those outside the installation ambit of this
contractor. The contractor must remain responsible for the system for an extended period to reduce risk to the City.
Station Services contractor – 6 years
This contract involves the employment of large numbers of personnel to manage stations, comprising among others cashiers,
security personnel and cleaning staff. The first two categories of staff are specialized functions, and given that the company will
recruit and skill its staff over a period of a least three years (as it upscales operations during the three years as the different
components of Phase 1A comes on line), the contract period should extend for a longer period that provides some stability and
continuity of operation of IRT. There is also logic in this period coinciding with the periods of the Fare System and Control Centre
contracts, since this will allow issues of integration and alignment between the contracts to be addressed at the same time.
[Page 6]
1.3 Financial implications for the City
Section 33 of the MFMA requires that the City’s Council must be assured that contracts to be concluded for a period spanning more
than three financial years will, once awarded, be financially sustainable and affordable to the City for the full period of the contracts.
This implies that the services delivered by these contracts must generate sufficient income to cover costs, or alternatively, the City must
make provision for deficits expected to be incurred by the contracts to be funded through other funding sources, such as from its own
revenue or grants from National and Provincial spheres of government.
The capital costs of implementing infrastructure and systems necessary to commence operations of Phase 1A of IRT will be R 4.3
billion, of which R 3.41 billion has been covered by the National Public Transport Infrastructure and Systems Grant (PTISG) funding and
the remaining R 0,38 billion by the City’s own funds. It is expected that the additional funds required will be sourced from the PTISG.
The amount of R 4,3 billion may escalate by up to R 0,31 billion arising from a potential adverse decision regarding the VAT treatment of
municipally provided public transport infrastructure. This matter is subject to discussions between National Treasury and SARS.
After extensive modelling of expected costs and revenues and further system design optimisation a potential deficit range has been
identified. Based on a conservative approach to risk it has been concluded that a deficit of approximately R 116 million per year can
reasonably be expected once Phase 1A is fully rolled out. This is based on estimated revenues from fares and advertising of R 275
million per annum and estimated expenditure of R 391 million.
Regulations issued in terms of the National Land Transport Act require that existing scheduled bus subsidies be transferred to new
services replacing currently subsidised services. In Phase 1A this can be expected to result in approximately R 55 million being
available annually from this source towards covering the deficit. Assuming receipt of this amount, and so long as the actual deficit does
not exceed the estimated deficit, the City has already provided for sufficient funds to cover this deficit. To the extent that the R 55 million
is not available or the deficit exceeds the estimated deficit it has been established that PTISG funding can be used to address the
shortfall on a transitional basis while adjustments are made to costs and revenues. This could include adjustments to service levels,
changes to fares and development of additional revenue sources.
The City is supporting initiatives by national government departments and the Financial and Fiscal Commission as well as other Cities to
provide for sufficient and predictable funding sources other than rates income for both municipal transport implementation and
operations. Modelling indicates that once the system is fully rolled out across the city, existing bus subsidies to be transferred to MyCiTi
will fully cover the projected operating deficit.
[Page 7]
1.4 Programme
It is intended that the Section 33 process will be focussed on allowing for the commencement of start-up services in the first part of 2011
(beyond the very small service between Cape Town Airport and the inner city, and any other limited related services), which requires
that certain of the contracts must commence in September 2010. Following this public consultation process and the receipt of
comment, and when the relevant contracts are ready to be awarded and contracts to be signed with the relevant contractors, reports
regarding each or all of these contracts will be submitted to Council. The first such report is expected to be submitted to the Council
meeting scheduled for 25 August 2010. This will be after the minimum statutory period of 60 days between the date of advertising and
the date of a possible decision of Council.
136
[Page 8]
2. Introduction
The purpose of this document is to inform the public, certain government departments and other stakeholders, as required by the Local
Government: Municipal Finance Management Act, 56 of 2003 (MFMA), of the intention of the City to award contracts for a period
spanning more than three municipal financial years to service providers it needs to help operate the IRT System.
Where a municipality intends to award a contract to a service provider and the financial obligations to the contractor span more than
three municipal financial years, it must follow a procedure set out under Section 33 of the MFMA. This Information Document sets out
the requirements of Section 33 and outlines the content, objectives and estimated costs of the projects involved.
The implementation of the Integrated Rapid Transit (IRT) system by the City of Cape Town will require the City to procure the goods and
services needed through a number of contracts to be awarded to services providers. These contracts will in combination provide the
necessary infrastructure and vehicles, and procure service providers to undertake the operations of vehicles and supporting services.
Infrastructure contracts include the construction of busways, stations and depots, which are essentially civil engineering projects with
contract periods planned to be less than three years in duration, and thus Section 33 do not apply to them.
Operations contracts affected by this process include the four contracts types dealt with in this Information Document, which together
provide for the operation of vehicles, management of the fare system, maintenance of the control centre, manning of stations and the
provision of the security necessary to protect passengers and project management services required to administer Phase 1A of the IRT
system.
2.1 Projects dealt with in this document
The specific projects dealt with under this application are:
The Vehicle Operating contracts – 12 years
The Control Centre contract – 7 years
The Automatic Fare Collection System contract – 7 years
The Station Services contract – 6 years.
The descriptions of these projects are provided in Chapter 6.
[Page 9]
2.2 Requirements of Section 33 of the MFMA
Annex 1 to this document contains the full text of Section 33, for reference purposes.
Section 33 requires as follows:
Section 33(1)(a)
The municipal manager must, at least 60 days before the Council meeting where a contract is to
approved, inform certain parties of the intention to award the contract by:
Section 33(1)(a)(i)
Issuing an information statement summarizing the municipality’s obligations and draft contract
documents to the public and inviting comments and representations; and
Section 33(1)(a)(ii)
Soliciting the views of –
•
•
•
National and Provincial Treasury
National Department responsible for local government
National Department having functional responsibility related to the service being delivered
(in this case the National DOT).
Section 33(1)(b)
The Council must prior to the award by the Municipal Manager of the contract, take into account:
Section 33(1)(b)(i)
The financial obligations on the Council for each financial year of the contract;
Section 33(1)(b)(ii)
The impacts of these obligations on its revenue;
Section 33(1)(b)(iii)
Any comments received from the local community and other interested persons;
Section 33(1)(b)(iv)
Written views and recommendations of the National and Provincial departments referred to above.
Section 33(1)(c)
The Council must adopt a resolution in which it:
•
•
•
Section 33(2), (3) and (4)
[Page 10]
Determines that it will have sufficient budget or revenue to pay for the contract;
Approves the entire specific contract document to be awarded; and
Authorizes the municipal manager to sign the contract.
These sections specify exclusions from the Section 33 process and do not apply to the IRT contracts,
or have provisions that repeat provisions summarised above.
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3. The vision of an integrated public transport system for Cape Town
3.1 The City of Cape Town’s responsibility for public transport
Public transport is a key mechanism for achieving the City’s transport vision of providing a sustainable transport system that moves all
its people and goods effectively, efficiently and safely without compromising people, the economy or the environment. Provision of a
quality public transport service is essential to ensure a substantial shift from private to public transportation, thus increasing public
transport market share and revenue generation.
It is increasingly acknowledged that effective and efficient public transport is critical to the social and economic development of South
African major urban areas, and by implication, of the country as a whole. Currently much of public transport in South Africa is unsafe
and inconvenient to both citizens and visitors. National, provincial and city government have, accordingly, made the improvement of
public transport a high strategic priority. This growing awareness of the importance of improving public transport is occurring alongside
an understanding that responsibility for public transport in the major cities in South Africa is best devolved to metropolitan governments.
The rationale for such devolution is that metropolitan governments are the sphere of government primarily responsible for the servicing
and management of the urban ‘built environment’. Cities make the key planning decisions influencing urban form; and they are
responsible for most of the infrastructure related services which, in reality, determine such urban form. Public transport is integral to the
management of the ‘built environment’ and thus needs to be run in a manner which is fully consistent with other ‘built environment’
related services.
The National Land Transport Act of 2009 as well as a variety of national government policy statements and initiatives gives substance to
this trend towards devolution of public transport responsibilities. This devolution will have major impact on the nature of metropolitan
governments since once responsibility for public transport is fully devolved – and particularly if the rail services are included – the
service will be significantly larger in scale than the current electricity function in the cities.
The existing system, for which the City will increasingly become responsible, is widely regarded as inadequate. Subsidised bus and rail
systems have relatively low fares but peak services are uncomfortable and off-peak services are inconvenient – where they exist at all.
Direct subsidies are not provided to the minibus-taxi industry, which disadvantages this industry as compared to scheduled bus and rail
services, and adds to the cost of its passengers. This results in minibus taxi operators chasing down passengers and competing for
ridership in a manner that is dangerous, whilst the phenomenon whereby taxis wait in off-peak periods to fill the vehicle with passengers
before moving is frustrating and unpredictable for users. This is resulting in burgeoning private motor car use and a sharp rise in traffic
congestion with pressures for costly road expansions.
[Page 11]
3.2 Cape Town’s IRT system
Cape Town’s IRT system is a bold initiative to transform the public transport sector over time by integrating all public transport modes
into a vastly improved and coherent system for the user. This must clearly be done hand-in-glove with other service providers, such as
Metrorail. Among the modes to be integrated are road-based rapid bus services on trunk and feeder routes, Metrorail passenger rail
services, minibus-taxi and conventional scheduled bus services and metered taxi services. Improved pedestrian, bicycle access and
park-and-ride facilities are integral elements of the system.
Forming part of the multi-modal IRT system will be a Bus Rapid Transit (BRT) system, to be implemented as the rapid bus component
of the IRT system. It will consist of a network, provided throughout the City, of trunk bus and feeder bus services that will integrate with
the Metrorail passenger rail services and other modes.
MyCiTi branding
In the long term all public transport modes forming part of the IRT system are proposed to be branded as MyCiTi services. A small IRT
bus service with MyCiTi branding, between the Cape Town airport and the inner city, was introduced in May 2010, prior to the 2010
Soccer World Cup. This is the beginning of the implementation of Phase 1A of the IRT system. Phase 1 is the first of four envisaged
phases to complete BRT throughout the City of Cape Town.
Phase 1A will provide bus services that will link the inner city area with the airport and service a corridor between Atlantis, Blaauwberg /
Table View, Dunoon, Montague Gardens and the inner city (the Atlantis corridor). It includes feeder services in the inner city and
elsewhere in this corridor and include newly developed high-density residential areas and low-income communities.
BRT in context
Key amongst the strengths of BRT is its flexibility both in serving varying passenger demand levels as well as penetrating the existing
urban fabric.
By easily combining different vehicle sizes and frequencies it can be tailored to serve a wide range of demand levels conveniently
and cost effectively.
As a road based system it is able to capitalize on the extensive road based urban growth experienced in recent decades and with its
network of trunk and feeder routes is able to penetrate at a much finer level into the urban fabric.
Unlike rail, which tends to divide urban space, BRT permits much greater ease of movement across transport routes, thereby
facilitating growth along corridors; it tends to ‘knit up’ rather than ‘cut up’ urban space.
At the same time, BRT is able to provide a high quality of service which, as indicated above, is essential to facilitate a growing move of
passengers from cars to public transport:
Dedicated busways along trunk routes permit fast movement along congested corridors.
Enclosed stations with pre-boarding fare collection and verification enables large numbers of passengers to board and alight in
quick time permitting a rapid service.
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Level boarding and high quality fittings widen access to the disabled while offering a comfortable service to all.
Short waiting times between buses add to convenience and should encourage more people to use public transport.
The business model for running BRT systems has been refined internationally over the years to maximize efficiencies while
accommodating pre-existing operators in the running of new systems:
Modern information and communications technology permits vehicle movements to be monitored and controlled centrally and
services continually tailored to better suit passenger needs.
Centralised vehicle control and automatic fare management enables vehicle operations to be outsourced to more than one company
fostering competition to serve the market while avoiding the chasing down of passengers which arises from current competitive
practices.
Existing minibus-taxi and scheduled bus operators are able to be accommodated competitively within the new system providing
opportunities for economic empowerment of informal service providers.
Based on these capabilities BRT is increasingly viewed internationally as the most sophisticated and effective form of road based public
transport available and by national government in South Africa as an appropriate and cost effective approach especially in the context of
lower density South African cities. This has led to significant funding support through the Public Transport Infrastructure and Systems
Grant (PTSIG) to metropolitan governments embarking on such initiatives.
[Page 12]
3.3 BRT to combine with rail to form the IRT system
Cape Town already has a substantial rail network. While low urban densities make it costly and inappropriate – other than in a few
limited cases – to seek to extend public transport services through expansion of this rail network, the new road based systems need to
be thoroughly integrated with the rail services as well as other forms of feeder services. The City’s vision is thus not mode-based but
driven by a need for integration of the various public transport modes into the most effective possible single seamless system, with the
vision of it operating under the MyCiTi corporate identity and branding.
For this reason the City has decided to start by implementing the rapid bus component of the IRT system. It is hoped that the system will
be in place throughout the City over the next 15 to 20 years. This would involve the establishment of a full public transport network,
encompassing high quality rail and road services, which will place at least 75% of Cape Town’s population within 500 metres of the
system.
[Page 13]
Design principles
The planning of the system is guided by a number of principles:
Quality – delivering a car-competitive service that is based around customer needs, including rapid travel times and frequent services,
few transfers, safety and security, service integration, universal access, comfort and convenience, clean vehicles, and helpful staff.
Equity – ensuring that all segments of society receive an equal, high-quality public transport experience, especially through
consideration of the special needs of low income earners, women, children, the elderly, and those with physical disabilities.
Security – a system which gives customers full confidence in their personal safety and security.
Sustainability – a system that is sustainable in terms of economic viability, the environment, and social equity.
Integrity – implementation in an open, transparent, and participatory manner
Phased implementation
The full implementation of the bus component of the IRT system has been divided into four Phases. Phase 1 focuses on the central city
and the corridor towards Blaauwberg, Dunoon and Atlantis. It is currently intended that this will then be followed in Phase 2 by the more
pressing public transport needs of the metro south east, including Khayelitsha and Mitchells Plain. This would then be followed by
Phases 3 and 4 to include the Durbanville area and Delft/Helderberg area respectively as shown below. However, the precise order of
roll-out is subject to consultation and investigation and will depend to some degree on the need to serve routes that pay for themselves
first so as to establish a financial base for extending to less profitable routes.
In parallel, the IRT will seek to integrate other modes, such as rail, into a seamless and effective public transport system.
[Page 14]
Phase 1 has been divided into two parts: Phase 1A and Phase 1B. Phase 1A includes the inner city and extends up the west coast to
include the rapidly growing residential area in Blaauwberg north of the Diep River, as well as the low-income communities of Atlantis,
Mamre, Dunoon and Doornbach and the industrial areas of Montague Gardens and Paarden Island. This corridor faces some of the
worst peak period congestion levels in the City, especially to the south and east of the bridges over the Diep River.
A key motivation for starting with this corridor within the City is that no rail service currently exists in that part of the city. The main Phase
1 trunk route intersects with the rail network at Woodstock station. Given the way the City’s rail system functions, all rail routes pass
though this station. This results in the Phase 1 service creating a very significant linkage of the west coast area of the city to the rail
network.
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[Page 15]
3.6 Factors affecting the financial viability of operations
IRT rapid bus services will offer a considerably higher level of service and quality of service than is provided by the current road-based
public transport system at fare levels that are more or less comparable. Key considerations include:
The degree to which a service is available at certain locations (i.e. coverage, service frequency, hours of operation.)
The quality of the service provided to passengers (i.e. speed, attractiveness, comfort, convenience, safety, security, and system
coherence).
Vehicles will be safer and more comfortable than most of those used in the current scheduled bus services and minibus-taxi indsutry;
travel times will be lower because of the dedicated busways and stations allowing for pre-boarding fare collection; and the off peak
service will be more frequent. IRT represents a shift from the current system aimed at peak period commuter travel to an all day public
transport system. The following features allow the IRT bus service to be provided more cost-effectively than the current service during
peak demand periods:
Fleet size can be optimally matched with projected demand while maintaining relatively high service frequencies.
The dedicated roadways allow vehicles to run faster in peak periods than would otherwise be the case often providing scope for
more than one trip per vehicle in the peak period. This reduces the required trunk vehicle fleet size and maximises the use of
current fleet.
Rapid boarding and alighting of all passengers including the disabled minimises dwell times at stations which reduces operational
costs.
The control centre tracks all vehicles, using sophisticated technology, and monitors compliance with the planned schedule. This
minimises any wastage and ensures optimum operations where demand and supply is continuously optimised.
Providing a higher level of public transport service, patronage will increase through choice users shifting from private transport
which will result in reduction of operating cost per passenger through economies of scale. This factor also reduces pressure for
increased road space provision, which over time represents considerable saving. Furthermore, providing continuously increasing
road space for private car users is not a sustainable or viable option.
[Page 18]
On the other hand, there are features which will increase costs when compared with the current system. These include:
Dedicated roadways and other fixed infrastructure must be provided and maintained;
Higher frequency of service during off-peak periods increases operational cost;
Stations and an independent fare collection system need to be operated and extensive security provided on the system, thus
increasing costs;
There are additional costs associated with the control centre, which controls and schedules vehicles in real time, as well as the
municipal entity or department required to manage the various contracts and the system as a whole;
By replacing current informal business practices with a more formal system employment conditions of staff are improved, thus
increasing costs.
A critical contributor to cost effectiveness is the difference between peak and off-peak demand. The overall capacity of the system is
driven by the requirements of the peak. But much of this is idle during the off-peak period. By smoothing the peaks and increasing offpeak demand, overall costs can be reduced and income to the system increased.
The current system seeks to deal with low demand in the off-peak period by cutting back severely on services. On many routes the
existing bus system does not provide any off-peak services. Minibus-taxis wait to fill up with passengers before proceeding. It is
intended that IRT bus services will provide an acceptable and predictable level of service in the off-peak periods providing the basis
over time to smooth the peaks and increase off-peak usage.
[Page 17]
4. Description of Phase 1A of IRT system
4.1 Background
In February 2007 the City undertook a scoping study for an integrated public transport network, and prepared a report entitled, “City of
Cape Town – Public Transport Implementation Framework.” The report identified the potential for BRT services across the City to
complement the existing rail system as part of an integrated public transport system. The concept for the BRT component of the IRT
system was modelled on the highly successful projects implemented in a number of cities worldwide, including Beijing, Bogotá, Curitiba,
Guayaquil, Los Angeles, Ottawa, Paris, Pereira, Quito, and Seoul.
In October 2007, the City formed a project office to undertake the development of the BRT system in Cape Town and in 2008 the City
appointed experienced consultant teams to develop the Operations Plan and Business Plan for the system.
To finance the development and implementation of Phase 1A, the City has received funds from National Government’s PTISG, and has
made further budgetary provisions from its own funding to cover the total costs. The PTISG fund was established by the National
Treasury to improve public transport country-wide in support of the hosting of the 2010 FIFA World Cup, but with a clear focus for a
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lasting legacy of improved public transport. The very initial services using IRT vehicles and infrastructure assisted the City to meet the
requirements for the 2010 Host City Transport Operations Plan.
On 27 August 2008, the City Council gave approval for the implementation of Phase 1A of the IRT System. Phase 1A includes the
Inner City, airport services, and certain routes in a corridor serving Atlantis, Dunoon, Montague Gardens and the Blaauwberg area.
4.2 Research and modelling
Extensive modelling has been done in order to optimise Phase 1A of IRT operations. This has revealed that, while vehicle operations
are likely to be covered by fare revenues, the other elements of the system, including stations and station services, the control centre,
the automatic fare collection system and the overall management of the system require some additional financing from other sources to
a greater or lesser degree. Operation of Phase 1A on its own is likely to result in a relatively high operational deficit.
However, as the system is rolled out the size of the operational deficit relative to turnover falls. Preliminary modelling of the whole
system indicates that it will be possible to fund operations, including the purchase of vehicles, from a combination of fare revenues and
a level of subsidy similar to that currently being provided to the subsidised conventional bus services in the Cape Town area. This also
means that the need for operational subsidy per passenger will fall significantly as the system expands.
See Chapter 7 for further details on financial implications of IRT.
[Page 18]
4.3 Description of Phase 1A
The limited MyCiTi bus service forming part of Phase 1A and geared to serve the 2010 FIFA World Cup commenced service in June
2010. This will be followed by the rollout of a starter service from the inner city along a corridor to Bayside Mall in Table View /
Blaauwberg early in 2011 and additional sub-phases to Dunoon, Montague Gardens and Atlantis will be implemented thereafter until the
completion of Phase 1A has been accomplished in 2013.
Phase 1A will link the airport and the inner city area and service the Atlantis Corridor. It includes the inner city and airport services, and
extends up the West Coast of the metropolitan area to include newly developed high-density residential areas and low-income
communities, industrial and commercial areas.
The inner city service
The inner city service will provide a convenient, costeffective way of getting around the CBD and city bowl areas
for the many thousands of people who live and work in this
economic hub. Key destinations include the Central
Station, V&A Waterfront, Long Street, Sea Point, Camps
Bay and Hout Bay. Smaller feeder vehicles will service
surrounding communities such as Tamboerskloof,
Oranjezicht, Vredehoek and Gardens.
Airport service
This part of the system will provide rapid, high frequency
services between the airport and the CBD and Green Point,
initially using the N2 BMT (Bus and Minibus Taxi) lane.
Atlantis corridor
The Atlantis corridor is home to several low-income
communities, such as Mamre, Atlantis, Doornbach and Du
Noon. Currently, areas such as Mamre and Atlantis do not
have a convenient and fast public transport alternative to
allow its residents access to jobs and public services. This
corridor also has some of the highest congestion levels in
Cape Town. Parts of Blaauwberg Road and Marine Drive
(R27) experience near gridlock conditions at peak periods.
It is expected that there will be high demand for the new
service with a significant move away from private vehicles
to public transport.
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5. Business structure of the IRT
system and the contracting process
There are six main entities / contractors comprising the
business structure of the City's anticipated Phase 1A of the
IRT system, which together will be responsible for operating
the system:
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the City of Cape Town;
a proposed Municipal Entity responsible for public transport that will manage and control the system for the City – a function which
initially is proposed to be fulfilled by an IRT operations department within the City;
two vehicle operating contractors;
the Fare System contractor;
the Control Centre contractor; and
the Station Services contractor.
This Chapter of the Information Document will outline the roles to be played by the first two entities on the above list. The roles of the
remaining four are explained in Chapter 6. The organisational chart below illustrates contract structure and the interrelationship
between the entities.
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5.1 The City of Cape Town
The City is constitutionally responsible for the provision of municipal public transport in the Cape Town metropolitan area.
During 2008, the City considered the issue of whether to carry out its public transport obligations itself (for example through one of its
existing departments) or whether to set up a separate entity to do so. Before making this decision, the City was required to comply with
two pieces of local government law, namely the Municipal Systems Act and the Municipal Finance Management Act. Since the vehicle
operations proposed to be provided will be a new municipal service, the City was required in terms of sections 77 and 78 of the
Municipal Systems Act to review and decide on the appropriate mechanism to provide this service. In December 2008 the City decided,
subject to the outcome of the assessment and public participation procedures prescribed by the Municipal Finance Management Act, to
establish a municipal entity (ME) for public transport services to carry out certain of its public transport-related functions on the City's
behalf. A key public transport function planned to be assigned to the ME was operations of the IRT. The City is currently dealing with
the requirements and steps set out in the Municipal Finance Management Act.
If the City does decide, after having complied with the requirements of the Municipal Finance Management Act, to establish a ME, the
City will enter into a service delivery agreement with that entity.
Various essential contracts, including most of those described in this Information Document, will initially be concluded by the City, but
administration and management of these contracts will be assigned through the service delivery agreement to the ME as soon as
possible after the ME’s establishment. In this agreement, the City may also assign to the ME certain of its other responsibilities in
relation to the proposed MyCiTi BRT and related system, but not all. The City will remain responsible for the fulfilment of a number of
BRT system functions, including the construction of the system infrastructure, roadway maintenance and cleaning, traffic signal control
maintenance, property and land acquisition, ownership of the infrastructure and broader transport planning functions. The City will also
be responsible for managing the performance of the Entity and ensuring that it complies with the standards set out in the service
delivery agreement.
The City will remain responsible for ensuring that the service is provided to the local community in terms of the Municipal Systems Act
and will ensure that everything done by the ME is in accordance with the City's Integrated Transport Plan, which is in accordance with
the City’s IDP.
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5.2 Operational Management of MyCiTi system
Interim internal management
The City will itself operate and manage the MyCiTi operations for an interim period until the ME is established and assigned these
functions.
The Municipal Entity for Public Transport Services
Subject to the process issues, one of the key responsibilities of the ME is proposed to be the operation and management of the MyCiTi
system and ensuring quality control of the services. The ME will have a decision-making role to update the initial routes and define the
routes, services and kilometres to be provide by vehicle operators, subject to the service delivery agreement.
The ME’s activities include the bidding and tendering process for the contracts to the private operators that will provide the relevant
parts of the service (apart from the initial contracts, which will be handled by the City), as well as managing the contracts once signed.
The ME will also be in charge of scheduling and controlling the bus operations, and developing quarterly, monthly, weekly and daily
basis schedules.
Once established, the ME will be governed by a board of directors, all of whom will be appointed by the City in terms of their specific
expertise and experience. No councillors or city officials will be entitled to serve on the board. The ME will be run by a chief executive
officer who will have a team of employees sufficient to fulfil all the functions assigned to the Entity. The offices of the ME will include the
facilities necessary for the scheduling and monitoring of the MyCiTi vehicles.
Upon its establishment, the initial contracts entered into by the City will be assigned by the City to the ME.
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6. Description of Section 33 contracts for the MyCiTi system
Only the proposed MyCiTi-related operational contracts that are proposed to span more than three municipal financial years are
described below. Excluded are contracts involving busway and station infrastructure and the procurement of vehicles, each of which
involve construction or procurement planned not to span more than three financial years. A project management services contract
limited to three years will also be procured to provide professional and technical resources to plan for the future phases of the MyCiTi
system and to assist the proposed Municipal Entity (ME) with certain duties.
The description below is subject to the approval by the Council of the business plan of the MyCiTi rapid bus and related services.
6.1 Vehicle operating contracts
Description of contract
At the centre of the MyCiTi system will be the vehicle operating contractors (the VOs) responsible for operating the vehicles necessary
to service both the trunk routes and the feeder routes of the MyCiTi system.
For Phase 1A, the City will award contracts to two VOs, both of which will be consortia established as private companies.
It is proposed that both VOs for the initial 12 year period will be appointed through a negotiation process as contemplated in the National
Land Transport Act, to be administered by the City, provided agreement is reached within a reasonable period. These negotiations will
be with directly affected public transport operators within the Phase 1A corridor, and their partners. Directly affected operators refer to
those operators whose services are proposed to be replaced and upgraded by the IRT, namely minibus-taxis and scheduled buses in
the Phase 1A area. They will be expected to give up their current rights in the Phase 1A area in return for shares in the companies
contracted to operate the new system or for compensation. The operators will form the core of these companies.
After the initial 12 year period VOs will be appointed through a tender process.
The VOs will be required to prove to the City that they have the required expertise to run vehicles operations as contemplated.
Each VO will be contracted to provide both trunk and feeder services and the contracts will be paid by way of a fee per kilometre of
service provided. The VOs must ensure that the amount that they are paid per kilometre is sufficient to cover all operational costs and
insurance cover and excess payments, plus a reasonable rate of return on their investment, which is a core element of the negotiation
between the City and these VOs – other than those costs that the City explicitly agree will be paid on a different basis.
The City will procure and pay the full cost of vehicles to be operated by the VOs out of available capital funds. Subject to detailed
contract agreements, the City then intends that the vehicles be leased to the VOs through a financial institution, with ownership of the
vehicles passing to the VOs at the end of the vehicle operator contract period. The terms of the lease will ensure that the vehicles are
used solely for the purposes of providing services in terms of the agreement with the City. The lease arrangement involving a financial
institution has been determined as optimal from both a financial and risk management perspective.
The VOs must be ready to test and train the drivers at least two months in advance of the system opening and will need to work with the
City or the ME on coordination of vehicle procurement, infrastructure construction, and system opening.
In terms of these obligations, each VO will be responsible primarily for operating trunk vehicles on specified trunk routes and feeder
vehicles on specified feeder routes. The detailed programming of services to be provided, the actual routes and the frequency of
services will be determined by the City/ME, subject to the terms of the contracts with the VOs. The final payment of kilometres will be
subject to deductions for fines for non-compliance of quality of service.
The contract will give nonexclusive rights to the VOs on the trunk routes and they may be required to operate on any route within MyCiTi
as determined by the City/ME. A specific set of fixed feeder routes will be assigned to each of the VOs.
The depots will be owned by the City and provided at no cost to the operator. The depots will be provided with all major fixed
infrastructure such as buildings, parking areas, maintenance pits, wash bays, fuel tanks, fencing, service connections, etc. The operator
will be responsible for the light maintenance of the depot and for the supply of all the required staff and equipment such as tooling, office
equipment, and payment for all services such as water, electricity, etc, as well as security.
The space and buildings for the administrative offices of the VOs, and the maintenance yards will be provided at the depots but owned
by the City. All of the equipment, furniture, maintenance tools and other costs associated with outfitting the depots will be borne by the
VOs. The City will be responsible for providing all the utility connections such as water, electricity, telephone, etc, but the user charges
will be the responsibility of the VOs.
The City retains responsibility for insurance of the infrastructure it provides, and the VO for all its equipment, although payment of
insurance excesses will generally be the responsibility of the VOs.
Each of the vehicles will be fitted with the necessary equipment, such as GPS transponders and on-board computers, to enable the
Control Centre or City/ME to schedule the departure and arrival times of vehicles at particular points and to monitor their movement.
The scheduling and monitoring equipment will also be utilised to ensure compliance with the requirements stipulated by the City. This
equipment will be provided for through the Control Centre contract.
The VOs will be responsible for the maintenance of the vehicles (except potentially for an initial period after the supply of the vehicles)
and will be fully responsible for driver management. The City/ME will specify the training requirements and carry out regular checks and
examinations.
The Automatic Fare Collection System contractor will be responsible for managing income paid by passengers to use the MyCiTi
system. Fare collection for trunk buses will occur mainly on the trunk stations through the use of smartcards, and not in the buses. For
feeder services, the buses will have smart card readers on board, provided by the Automatic Fare Collection System contractor. The
VOs will not be responsible for fare collection on trunk and feeder services, but they will be responsible to take steps regarding fare
evasion on buses. Feeder vehicles (and potentially some trunk buses) will have electronic cash boxes where passengers without smart
cards can pay the cash fare, but the driver will not manage cash.
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The VOs will not manage the process of advertising on vehicles, since such advertising revenue will be used for providing income to the
system as a whole. Advertising and revenue earned will be managed by the City or ME or a company contracted for this purpose. The
VOs must allow access to vehicles to the City/ME and advertising service providers, within the limited and specified spaces in the
vehicle set aside for this, and facilitate installation of facilities for infotainment.
[Page 25]
Why contracts should be 12 years
The duration of VO contracts will be for 12 years.
In order to obtain the best service out of the investment of the buses, the contract period for the VO is made to co-incide with the
expected commercial life of the vehicles used, namely between one and one-and-a-half million kilometres for trunk vehicles and about
one million kilometres for feeder vehicles. VO will have the incentive to ensure that buses are properly maintained, as inadequate care
and maintenance will result in more breakdowns and consequently reduced income to the VO. Furthemore, buses that are well
maintained and cared for during the 12-year contract period will have higher residual value at the end of the contract when they will be
transferred to the VO for a nominal amount. This is proposed to encourage the VOs to continue a high level of maintenance also
towards the end of the contract period, thereby to reduce downtime and thus a negative impact on operations.
[Page 26]
6.2 The Automatic Fare Collection System contract
Description of contract
An Automatic Fare Collection System contractor will be responsible to install and operate a simple-to-use, effective, efficient and
transparent fare collection system. This Automatic Fare Collection System contractor will supply all access control hardware at stations
and on buses, consisting of turnstiles, smartcard card readers and ticket machines, as well as the electronic and communication
hardware and software to run the fare system.
The Automatic Fare Collection System contractor will procure a network of retailers to sell smartcards, to supply smartcards to the City,
to supply fare transaction data to the City and to provide additional services such as training, maintenance, software upgrades, etc. The
contractor will need to provide timely and accurate information about daily fares collected and any other relevant commuter information
as requested by the City/ME for decision making and planning purposes.
The Automatic Fare Collection System contractor will be responsible for establishing and enforcing the day-to-day management of the
fare collection function and will have to adhere to the system’s goals for good customer service and experience.
The contract is proposed to comprise of two components: firstly, the contractor will be responsible for the detailed design, manufacture
and installation of the hardware and software systems of the automatic fare collection system. This part of the contract will comprise
capital implementation of systems. Once installed, ownership of such systems is proposed to be taken over by the City preceded by a
process during which the hardware and software systems are tested, commissioned and handed over by the contractor.
The second part of the
contract
involves
the
operation and maintenance of
the system during which the
contractor is responsible for
issuing smartcards to the
City/ME, for collecting and
paying over revenue, and for
maintaining hardware and
software systems. This part
of the contract will comprise
the
annual
recurrent
maintenance costs that will
form part of the operating
costs of the system. The City
plans to contract a set
monthly rate for maintenance
and minor repairs with the
Automatic Fare Collection
System contractor, to ensure
that substandard equipment is
not provided and to reduce
the City’s risk regarding
excessive maintenance and
repair
needs.
Regarding
major repairs, the City plans
to contract with the operator
set rates for different kinds of
repairs.
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Why contract should be 7 years
It is important that the contractor responsible for the installation of the hardware, software and banking systems continues its
involvement for a suitable lengthy period of time after hand-over, and continues to be responsible for maintenance and repairs at a set
rate, thereby reducing risk to the City. This is also because the contractor will be intimately familiar with the operation and maintenance
systems comprising complex proprietary software, hardware and electronic components, and it will further have a contractual
relationship with a banking institution that manages the fare cash flow between customer and the City/ME. Both operation and
maintenance aspects are best continued for a reasonable period after hand-over in order to promote transfer of skills and stability of the
MyCiTi system as a whole, while being a period sufficiently contained so as to allow the City/ME to tender for a replacement contractor
towards the end of the contract period.
Therefore, the contract with the Fare System contractor is proposed to be awarded for a period of about seven years.
[Page 27]
6.2 The Control Centre contract
Description of contract
The City/ME will enter into a contract with the Control Centre contractor, who will be responsible for the supply of the fleet management
system (both equipment and the software), the supply of certain CCTV systems (cameras, terminals and software), the supply of an
information display system (control terminal, in vehicles and station and bus stop displays and software) and the provision of various
services such as training, maintenance, software upgrades, etc. It will also have to install other equipment on the vehicles, such as the
GPS transponders and on-board computers. It will be required to set up and equip an operations control centre in the City’s Traffic
Management Centre and to ensure there is a system that will allow smooth operational communication between all contractors and the
City/ME.
The City/ME will in due course be doing the actual control and scheduling of the bus services, and the Control Centre contractor will
enable the City/ME to fulfil its scheduling, monitoring and control functions. The Control Centre contractor will operate the control centre
during the first 12 to 24 months of operation, depending on readiness of the City/ME, once the system is installed. A testing-andtraining period will take place prior to hand-over to the relevant officials. The Control Centre contractor will be responsible for replacing
any faulty or damaged equipment and providing software upgrades during the term of the contract.
As in the case of the Automatic Fare Collection System contractor, the contract with the Control Centre contractor is proposed to consist
of two components: an initial period of approximately two years during which the hardware and software systems are designed,
installed, tested, commissioned and thereafter handed over to the City as asset owner.
Once all hardware and software systems are operational the Control Centre contractor will have a continuing role in the second part of
the contract which involves the operation and maintenance of the system, commencing on hand-over. This component of the contract
will form part of the operating budget of MyCiTi. The City plans to contract a set monthly rate for maintenance and minor repairs with the
operator, to ensure that substandard equipment is not provided and to reduce the City’s risk regarding excessive maintenance and
repair needs. Regarding major repairs, the City plans to contract with the operator set rates for different kinds of repairs.
[Page 28]
Why contract should be 7 years
It is important that the contractor responsible for the installation of the hardware, software and banking systems continues its
involvement for a suitable lengthy period of time after hand-over, and continues to be responsible for maintenance and repairs at a set
rate, thereby reducing risk to the City. This is also because the operation and maintenance of these systems will comprise complex
proprietary software, hardware and electronic components with which the contractor will be intimately familiar. These aspects are best
continued for a reasonable period after hand-over in order to promote transfer of skills and stability of City/ME operation while allowing
for a period sufficiently contained so as to allow the City/ME to tender for a replacement contractor towards the end of the contract
period.
Therefore, the contract with the Control Centre contractor is proposed to be awarded for a period of about seven years.
[Page 29]
6.4 Station Services contract
Description of contract
A single contract will be entered into with the Station Services contractor. The Station Services contractor will be responsible for access
control onto stations, for ticket sales at stations, for security on vehicles and stations, and for general management services on the
stations and for delivering the City’s/ME’s quality goals of good customer service and experience. It will make use of CCTV surveillance
cameras and a communication system linking security personnel and the control centre installed by the Control Centre contractor and
others. An additional responsibility of the Station Services contractor is proposed to be to manage parking and park-and-ride facilities
within the precincts of MyCiTi stations and stops and potentially elsewhere in the relevant corridor, and to collect parking fares from
MyCiTi passengers.
The Station Services contractor will be responsible for hiring and training cashiers and customer service agents at the stations and
providing a level of service that exceeds customer expectations.
145
While the Automatic Fare Collection System contractor is responsible for procuring, installing, and maintaining the equipment in the
stations for fare collection, the Station Services contractor will need to coordinate with the Automatic Fare Collection System contractor
for maintenance and upkeep of the fare collection equipment within the station.
The Station Services contractor will be responsible for security in the station, for both passengers and the money collected at stations
from ticket sales, and for collecting cash from vehicles installed with electronic cash boxes, where passengers without smart cards can
pay the cash fare. This includes controlling fraud and fare evasion. The company will be liable for any money lost or stolen and will
ensure cash received at station kiosks is deposited in accordance with the Automatic Fare Collection System procedures.
The contractor will also be responsible for the cleaning of the stations and the bus and cycle ways, for landscaping and for minor
maintenance of the stations. Major
maintenance and upgrading will be the
responsibility of the City.
[Page 29]
Why contract should be 6 years
The contract for the Station Services is
proposed to run for six years after
award, with the first 12 months being a
period when recruitment and training of
personnel takes place and allows the
Station Services contractor to develop
its
management
responsibilities
efficiently.
The Station Services
contractor will be required to hire a
considerable number of personnel to
perform its functions, all requiring
training and management over a
significant period so as to ensure
consistently
high
standards
of
performance.
Cashiers and security personnel make
up the largest number of persons to be
employed.
Of importance is that
security personnel must be multi-skilled
so as to provide customer care and to
deal with fare evasion in addition to their tasks related to security. The cashiers at stations will, in addition to selling tickets and being
responsible for cash, will be given overall leadership responsibility for all aspects of the station at which they are located, and will thus
be trained to manage the station asset, security, fare evasion, customer care and management of personnel.
A contract period of shorter than three years will not provide the stability of service needed for the MyCiTi, especially during the initial
slower roll-out period of Phase 1A, and thus a period of about half the length of the VO contractors’ contract period is proposed. The
contract length of six years will still afford the City/ME the opportunity of re-tendering the Station Services contract to ensure that
competitive rates are obtained, and subsequent Station Services contracts may be for shorter periods to enhance regular competition.
[Page 30]
6.4 Integration between these contracts
The interrelation between the four contracts and with the City/ME is shown below. The various independent entities will require detailed
operational integration so the whole MyCiTi system operates as a unit with regard to responsibilities, reporting of information, faults,
repairs and other operational matters.
[Page 31]
7. Financial Implications of MyCiTi IRT contracts
Section 33 of the MFMA requires that the City’s Council must be assured that contracts to be concluded for Phase 1A of MyCiTi beyond
three financial years will, once awarded, be financially sustainable and affordable to the City for the full period of the contracts. This
implies that the services delivered by these contracts must generate sufficient income to cover costs, or alternatively, the City must
make provision for deficits incurred by the contracts through other funding sources, namely from its own revenue or grants from National
and Provincial spheres of government.
The Section 33 process currently being undertaken is specifically aimed at contracts that will allow Phase 1A of MyCiTi to be
implemented and operated for the contract periods intended. As described earlier in this document the City intends to continue with the
rollout of the subsequent phases of the BRT throughout the City. Financial implications of the four contracts needed for Phase 1A of
MyCiTi are therefore described in 7.1 while broad indications of the financial implications of the complete system are provided in section
7.2.
Future phases will, of course, require their own operating contracts and this aspect will be considered at a later stage.
146
[Page 31]
7.1 Implications of Phase 1A of MyCiTi
An assessment of the financial implications of Phase 1A of MyCiTi must logically consider the costs of building infrastructure to allow the
BRT to commence as well as the operational management of the system.
[Page 31]
Capital implementation expenditure
While not directly relevant to the financial administration of the four contracts being considered here and though not required in terms of
the MFMA, it is useful to place in context the costs of infrastructure implemented for the MyCiTi Phase 1A services. These include the
bus ways, stations and intelligent transport systems required to allow services to commence. The larger part of the funding for the
implementation of Phase 1A is being provided by National Government grants through the Public Transport Infrastructure and Systems
Grant (PTISG), while the City provides the balance through loan funding and its other own sources of revenue.
The total cost of Phase 1A will be R 4,3 billion, with the contributions by the National Government and the City currently standing at R
3,41 billion and R 0,38 billion respectively. These amounts are being provided for in the City’s capital budgets for the financial years
2008/2009 to 2012/2013. It is expected that the additional funds required will be sourced from the PTISG. The amount of R 4,3 billion
may escalate by up to R 0,31 billion arising from a potential adverse decision regarding the VAT treatment of municipally provided public
transport infrastructure. This matter is subject to discussions between National Treasury and SARS.
[Page 32]
Operational expenditure, income and subsidies (annual recurrent)
During the years of operation that the contracts are active, payments to contracted operating companies constitute the primary cost
implications. Additional costs will be incurred by the MyCiTi management unit within the City/ME.
After extensive modelling of expected costs and revenues and further system design optimisation a potential deficit range has been
identified. Based on a conservative approach to risk it has been concluded that a deficit of approximately R 116 million per year can
reasonably be expected once Phase 1A is fully rolled out. This is based on estimated revenues from fares and advertising of R 275
million per annum and estimated expenditure of R 391 million.
Regulations issued in terms of the National Land Transport Act require that existing scheduled bus subsidies be transferred to new
services replacing currently subsidised services. In Phase 1A this can be expected to result in approximately R 55 million being
available annually from this source towards covering the deficit.
Assuming receipt of the R 55 million, and so long as the actual deficit does not exceed the estimated deficit the City has already
provided for sufficient funds to cover this deficit. To the extent that the R 55 million is not available or the deficit exceeds the estimated
deficit it has been established that PTISG funding can be used to address the shortfall on a transitional basis while adjustments are
made to costs and revenues. This could include adjustments to service levels, changes to fares and development of additional revenue
sources.
The City is supporting initiatives by national government departments and the Financial and Fiscal Commission as well as other Cities to
provide for sufficient and predictable funding sources other than rates income for both municipal transport implementation and
operations.
Modelled annual operating
costs of Phase 1A
System appraisal of Phase 1A
2010 Rands
Estimated total income
R 275 million
Estimated total expenses
R 391 million
Deficit
- R 116 million
The above amounts exclude the services provided by the City, such as infrastructure maintenance. However, because of the nature of
infrastructure investment these costs are minimal and covered by existing municipal service capabilities. Other maintenance costs are
addressed within the four contracts discussed in this document.
As indicated in the following section, modelling indicates that once the system is fully rolled out across the city, existing bus subsidies to
be transferred to MyCiTi will fully cover the projected operating deficit.
[Page 33]
147
7.2 Implications of completed full MyCiTi system
In the report entitled “Project Status and Financial Strategic Assessment” adopted by Council in October 2009, it was reported that initial
modelling results for the complete MyCiTi system would result in an annual deficit of R 440 million, as shown below:
Modelled annual operating
costs of full IRT bus system
System appraisal of full IRT bus system (modelling scenario 57)
2010 Rands
Estimated income
R 5 700 million
Estimated total expenses
R 6 140 million
Deficit
- R 440 million
As the existing GABS/Sibanye scheduled bus services are phased out and replaced by the new MyCiTi system, the subsidies which
presently exceed R 600 million and are currently paid for these services are anticipated – in terms of current national government policy
and National Land Transport Act regulations – to be shifted across to the new system. Initial modelled figures indicate that once fully
implemented the system operations would not require additional revenue sources over and above existing bus subsidies.
The reason for a lower proportional subsidy requirement once the whole system is in place arises from economies of scale, as well as
higher passenger usage resulting from the convenience of a more comprehensive network. Furthermore, the Phase 1A route was
chosen because of an absence of any rail network in that part of the City, combined with the fact that it is the City’s fastest growing area
and is experiencing significant escalating traffic congestion. However, the long distance Atlantis routes and generally low current
densities tend to make this a more costly area to serve. As development in the area proceeds and densities increase it could be
anticipated that unit costs will be lowered.
[Page 34]
8. Further documentation
In addition to this Information Document, persons wishing to comment may wish to access the draft contracts subject to the Section 33
process and further documents relevant to the MyCiTi Projects. Additional documents are available on the IRT page of the City’s
website and include:
•
•
•
•
•
•
Draft tender/contract documents for –
o
Vehicle operating company contract
o
Automatic Fare System contract
o
Control centre contract
o
Station Services contract
City of Cape Town – Public Transport Implementation Framework – February 2007
Feasibility Study for the establishment of a Municipal Entity for the provision of municipal public transport services – City of
Cape Town June 2009.
Integrated Transport Plan (2006 – 2012)
October 2009 Status Report
IRT Progress Reports 1 -> 5 (Dec 2009 to April 2010)
The website link where the Information Document and the documents listed above may be download is
http://www.capetown.gov.za/en/irt
[Page 35]
9. Where to submit your comments
Written comments must be submitted by Friday July 30, 2010 to:
Mr Mike Marsden
Executive Director: Transport, Roads and Major Projects
(For attention: Ms Beverley Ball)
City of Cape Town, PO Box 298, Cape Town, 8000
Email:
Beverley.ball@capetown.gov.za
Fax:
021 400 5697
148
Queries you may have about this Information Document should be directed to Beverley Ball at:
Telephone:
021 400 9139 or
Email:
beverley.ball@capetown.gov.za
149
Annexure E: Information document – Transfer of MyCiTi buses
CITY OF CAPE TOWN
M YC IT I
Integrated Rapid Transit Project Phase 1A
Information statement on proposed transfer of MyCiTi buses
Issued in terms of the Municipal Asset Transfer Regulations
27 August 2010
Preface
The accompanying information statement is required in terms of section 14 of the Municipal Finance Management Act and the Municipal
Asset Transfer Regulations in terms of processes that must be followed in cases where the City wishes to transfer high value assets to
a third party.
The information statement is structured so as to meet the information requirements as set out in relevant legislation. However, a
description of the overall transaction that the City wishes to implement and the basis for following this path rather than other alternatives
is set out in Annex B of the information statement. For ease of understanding it is recommended that Annex B be read prior to reading
the main body of this information statement.
This transaction forms one element of the Business Plan of the MyCiTi project. The full Business Plan and other relevant documents are
available at www.capetown.gov.za/en/irt, and click on “Public participation”.
This information statement is closely linked to the information statement also available on this website entitled “Information statement
on proposed transactions to establish desired title holding and use of MyCiTi buses”. The two statements have been issued
separately because they seek to address different elements of applicable legislation
Valuation of the asset
The City took delivery of the initial 43 MyCiTi vehicles during May and June 2010. It is envisaged that these 43 vehicles will be
transferred around February 2011 when the MyCiTi starter service is due to commence.
When valuing the assets, account must be taken of the fact that the vehicles already purchased, although very new, will be used during
the process of public consultation and thus will depreciate in value, and the vehicles not yet purchased must still be acquired through a
tender process. Thus, the following information is provided in material compliance with the provisions of the Regulations:
At the time of writing this report, these vehicles are between 1 and 2.5 months old, and have between 1 000 and 15 000 kms on
their clocks. Barring very minor body damage to some, all are in excellent condition, other than one that was in a relatively serious
accident and two that were in minor accidents. The vehicles that are damaged will be repaired through the insurer. The value of all
these vehicles is estimated on average to be at least 90% of their purchase price.
The exact value of the vehicles will be set at a date closer to the actual transfer. This will be based on the original price of the
vehicle as stated above minus an estimation of depreciation determined by an independent valuer appointed by the City.
It is envisaged that a further 267 vehicles will be transferred over the following three years as Phase 1A of MyCiTi is implemented.
These vehicles are not planned to be used prior to transfer and thus are planned to be transferred at the same price at which they
are purchased by the City in terms of the normal supply chain management processes.
The iindicative value of MyCiTi Phase 1A initial fleet to be transferred is as set out in Annex A, which is subject to review.
Reasons for the proposal to transfer the capital asset
The City has considered a number of mechanisms through which ownership of the vehicles could best be arranged. These options and
the reasons for adopting the proposed approach are set out in detail in Annexure C to the MyCiTi Business Plan as tabled in Council –
see Annex B to this document.
In summary, the options to Council include:
Option A: Transferring the vehicles to the MyCiTi vehicle operators at no charge in order that the vehicle operators provide the
service;
Option B: Selling the vehicles to the vehicle operators through an instalment sale agreement with conditions attached to the use of
the vehicles;
Option C: Retaining the vehicles and leasing them to the vehicle operators;
150
Option D: Selling the vehicles to a financial institution, which in turn leases the vehicles to the vehicle operators. The City invests the
proceeds of its sale with the financial institution and pays the vehicle operators out of the proceeds of the investment to enable the
vehicle operators to lease the vehicles and so provide the public transport service (ie the model described in the main report).
There are four key reasons for adopting Option D, namely the option of transferring the vehicles to a financial institution which leases
them to the vehicle operators.
Firstly, if the City transfers at no cost or sells the vehicles to the operators, by whatever mechanism, and the vehicle operators get into
financial difficulty and are liquidated, the vehicles may be possessed by the liquidator and lost to the system.
Secondly, by selling the vehicles to a financial institution tax benefits are available arising from the depreciation of the vehicles; these
are not available if the City retains ownership since the City is not a tax paying entity. The proposed transaction is designed so that the
tax benefits accrue, in effect, to the MyCiTi system.
Thirdly, there are legal restrictions on the City itself entering into any instalment sales agreements.
Fourthly, the City is not experienced in instalment sales or in leasing out of vehicles, while this is part of the core business of many
financial institutions.
Option A, the option of transferring the vehicles at no charge to the vehicle operators, is financially the most beneficial for the system as
a whole, but carries the risk of possible loss of vehicles in cases of operator liquidation. Financial modelling has shown that Option D is
the second most financially beneficial of the options and a further analysis that this option carries only minimal risks.
Expected benefits to the municipality that may result from the transfer of the asset
The key benefits from transferring the vehicles to a financial institution as envisaged include:
Risk management benefits: Assuming the financial institution is financially sound the risk of the loss of vehicles to the system arising
from liquidation of the owner is much lower than if the vehicles are owned by the vehicle operators.
Financial benefits: Through this mechanism the financial institution is able to access tax advantages which can be passed on to the
system as a whole. This lowers the financial cost and risk for the City.
Administrative benefits: Instalment sales or leasing of vehicles is not a core business of the City and the City does not possess the
appropriate capabilities for this, while such activity is the core business of many financial institutions.
Expected proceeds to be received by the municipality from the transfer of the asset
The proceeds to be received from the sale of assets will be, as indicated above, approximate the cost of the assets minus a reasonable
amount arising from depreciation of the asset through use and age. The proceeds will be invested in the financial institution that
purchases the vehicles and leases them to the vehicle operators. Interest on the investment will accrue to the City.
Expected gain or loss that will be realised or incurred by the municipality arising from the
transfer of the asset
The actual purchase price paid by the financial institution for the vehicles is not the only, or even the primary, determinant of the benefit
or otherwise of this transaction.
Apart from the management of risk, the key benefit will be determined by the level of fees charged by the chosen financial institution and
the extent to which the tax benefits are able to be captured by the MyCiTi system through these transactions.
Given that the transaction entails minimal risk for the financial institution, and that such institution will be identified through a competitive
tender process, it is envisaged that the City should be able to realise considerable benefit from this transaction in comparison with other
options.
Based on a set of reasonable assumptions, financial modelling has indicated that for every R100 million worth of vehicles that are sold
to the financial institution and the proceeds invested in the financial institution, slightly in excess of R30 million will remain at the end of
the 12 year period over which the vehicle leases will run. This is partly attributable to the benefits arising from the tax treatment possible
in terms of this arrangement.
Annex A. Indicative values of MyCiTi Phase 1A initial fleet (excl VAT)
Basic info
Purchase price (excl
VAT)
Numbers
Estimated value (excl VAT)
Delivered
fleet, est
value @ 90%
of purchase
price
Service
Vehicle size
Total
Already
delivered
'delivered
fleet')
Feeder
8m
27
0
27
1 295 445
34 977 015
34 977 015
12m
165
0
165
1 599 178
263 864 370
263 864 370
12m (basic + airport)
87
35
52
1 599 178
55 971 230
50 374 107
83 157 256
133 531 363
18m
31
8
23
2 825 065
22 600 520
20 340 468
64 976 495
85 316 963
Total
310
43
267
-
78 571 750
70 714 575
446 975 136
517 689 711
Trunk
Balance
to be
procured
Unit price
(estimate)
Delivered
fleet: Total
price
Total est
value, still to
be procured
Total value
Annex B: Assessment of the options regarding ownership of buses
From Annexure C of the updated Business Plan approved by Council in July 2010 for purposes of funding and obtaining public comment.
1. Objectives
Four options relating to ownership of the vehicles in Phase 1A of MyCiTi were considered, with the objective of optimizing across three key objectives namely:
(a)
To minimize costs to the system;
(b)
To ensure that the city is not exposed to the risk of losing buses which it has supplied at below cost to the vehicle operating companies; and
(c)
To incentivise the vehicle operating companies to maintain and run the vehicles as well as possible.
2. The exceptional nature of Phase 1A
In the standard Bus Rapid Transit model the system generates sufficient revenue from fares that vehicle operators can be paid a fee per
kilometre which covers the vehicle operating costs and the capital charges on the vehicle while also offering a profit assuming normal
efficiency levels. Under this system the vehicle operators purchase the vehicles from the vehicle manufacturers and pay for them on
terms they negotiate.
But in Phase 1A the system does not generate sufficient revenue to do this. Modelling shows that fare revenues can cover the operating
costs of the vehicles as well as a normal level of profit. But subsidies will be required from sources other than ticket sales to cover the
remaining costs.
National government has agreed that the vehicles can be paid out of the Public Transport Infrastructure and Systems Grant (PTISG),
and this has already been done in respect of the buses purchased so far.
3. Important considerations relating to financial and tax impacts
3.1 Direct and indirect benefits of the respective approaches
Different approaches to the financing of buses impose different costs on different stakeholders. The objective should be to minimize the
overall costs of buses to the system. If a particular approach enables the vehicle operators to benefit from a tax advantage this enables
the city to pay them less for the provision of the service. Thus while the direct benefit is to the vehicle operator the city benefits indirectly
– depending on the extent to which the city is able to capture these benefits through the negotiation process.
Similarly, where a bank is involved in a manner where it is able to benefit from a tax advantage this could be used to reduce the costs of
the system as a whole – again, depending on the extent to which city is able to capture these benefits through a tendering or negotiation
process.
3.2 Depreciation benefits for tax purposes
A key element in designing an optimum approach to ownership arises from the way depreciation is treated in the tax system.
Taxpayers can deduct the value of the depreciation of assets from their taxable income and so reduce the amount of tax they are liable
for. The depreciation is based on the value by which the asset depreciated whilst used for business purposes. The value by which the
asset depreciated is usually determined by reference to the cost of the acquisition of the asset; however where the asset was acquired
by way of a donation the value of the asset used to determine the depreciation is the market value of the asset at the time the asset was
acquired for business purposes. The period over which an asset can be depreciated is based on guidelines drawn up by SARS for
different classes of assets.
Even if the MyCiTi vehicle operating companies are given the vehicles free they can deduct the full value of the vehicles from their
income over four years, subject to agreement from SARS that a four year period is reasonable in these circumstances. Thus they can
deduct 25% of the value of vehicles per year from their taxable income for four years. Since company tax is payable at 28% of taxable
income this translates into a benefit worth 28% of the value of the vehicles.
If the vehicle operator companies are sold the vehicles at market price they will have to charge the city more for the service they are
providing since they will have to cover the interest and capital redemption costs of the vehicles. The additional amount payable to them
by the city will be taxable. The interest component of this additional amount can be deducted from their taxable income as an expense;
however they cannot claim the capital component as an expense and also claim the depreciation benefit.
Thus under the scheme whereby the vehicles are donated to the vehicle operating companies less tax is payable overall than when they
are sold to the companies and the payment to the companies for their services is concomitantly higher.
The tax depreciation benefit is not available if the buses are owned by the City since the City does not have taxable income against
which to make the deduction. However, if they are owned by a profit making financial institution which leases the vehicles to a vehicle
operator the tax depreciation benefit is available to the financial institution.
Note that were the City to create a municipal entity to run the IRT service, as originally envisaged, the vehicles could be donated to such
an entity, which, because it is a tax paying entity, would be able to benefit from depreciation allowances. This would have led to more
options than those considered below; however, since such an entity does not exist at this stage these options are not presented or
discussed.
4. The four options
The four options that have been considered are:
Option A
The City of Cape Town pays for the vehicles out of the PTISG in Phase 1A and transfers
ownership of the vehicles at the start of the contract at no charge to the vehicle operators
(VO), but with a call option whereby ownership reverts to the City under specified
circumstances
Option B
The City of Cape Town pays for the vehicles out of the PTISG in Phase 1A and sells the vehicles to the
vehicle operators on an instalment sale (hire purchase) basis so that ownership transfers to the VO at the
end of the 12 year contract. The City pays the VO an additional monthly amount (compared to Option A)
and the VO pays this back to the City in order to pay the interest and redemption on the buses
Option C
The City of Cape Town, having purchased the vehicles with the PTISG, retains ownership of the vehicles
and leases them to the operators
Option D
The City of Cape Town, having purchased the vehicles with the PTISG, sells the vehicles to a secure
153
financial institution at market price. The proceeds of the sale are invested with the financial institution as
collateral for the vehicles which are then leased by the financial institution to the vehicle operator. The City
pays the vehicle operators on a monthly basis out of the collateral investment it has placed with the
financial institution. The bank, as owner of the vehicles, is able to benefit from the allowance arising from
the vehicle depreciation. To the extent that it can be ensured that this benefit is passed on to the VO, the
City needs to pay only a reduced amount to the VOs to enable them to pay for the vehicle lease.
4.1 Option A
Initially Option A was preferred. Under Option A the vehicle operators own the vehicles and thus have an incentive to maintain and run
them optimally. There is also a significant tax advantage in that even though the operators have not had to pay for the vehicles they can
claim an allowance for depreciation based on the real value of the vehicles. This depreciation advantage accrues over the first four
years of the contract and is equivalent to 28% of the value of the vehicles.
For every R100 million worth of vehicles donated in Phase 1A the VOs overall tax liability would be reduced by R7 million per year for
four years – a total of R28 million.
This allows the City to pay a lower rate per km to the VOs than would otherwise be the case – a benefit which results in less operating
subsidy requirement.
However, the concern with Option A is that if the VOs go bankrupt the vehicles will be lost to the City – unless the City buys them again
from the liquidator.
Option A was thus rejected.
4.2 Option B
Option B was considered because an instalment sale (hire purchase) arrangement allows the
City to register a bond over the vehicles. If the VOs go bankrupt the City can call in the bond and claim the vehicles.
Under this option the VO has to make an additional payment each month which was not required under Option A. That is the VO must
pay the interest and capital on the loan for the buses. This means the City in turn has to pay an additional amount each month to the VO
(which the VO pays back to the city). This amount which the City pays to the VO is taxable.
The tax payable on this amount can be reduced. Firstly, the interest component of the amount the VO now pays the city in terms of the
instalment sale agreement can be claimed as a business expense. Thus, effectively, there is no net tax payable as a result of the
interest component of the grant the city makes to the VO for vehicle purchase.
Secondly, under an instalment sale agreement a depreciation benefit can still be claimed by the purchaser even though ownership only
passes to the purchaser at the end of the hire purchase period (in this case 12 years).
This depreciation benefit offsets the tax liability on the capital component of the grant the City makes to the VO for vehicle purchase.
However in Option A this depreciation benefit was available to offset tax liability on other income. Under Option B it has been used up in
offsetting an element of the grant the City makes to the VO for bus purchase – a grant not required under Option A.
The overall amount of tax payable by the VO is thus significantly more under Option B than under Option A. The difference is, in effect,
equivalent to the tax payable on the capital component of the grant the city makes to the VO for bus purchase.
It is also possible that this option falls foul of the MFMA, which does not allow the City to make loans to the public. The City may have
to be registered as a financial services provider in terms of the National Credit Act.
4.3 Option C
Under Option C the City retains ownership of the buses and leases them to the VOs. This lease can be at a low rate. And there is no
danger that the vehicles are lost.
The VOs will not be able to claim a depreciation allowance, but will be able to claim a tax deduction for the full amount of the lease
payments made to the City. As a non-taxpaying entity the city is not subject to tax on the lease income but is also not able to claim the
depreciation allowance as an expense for tax purposes (since it has no tax liability that could be reduced).
Under this arrangement the City could (in terms of its standard depreciation procedures) choose to use the additional amounts payable
by the VOs to build up a cash backed reserve to provide for the replacement of vehicles. However, it then has to find the money
elsewhere to pay the VO to enable the VO to pay for the lease.
The V’s do not have the same incentive as in the previous two options to maintain and run the vehicles optimally - although this might
be mitigated if the vehicles are transferred free of charge to the VOs at the end of the 12 year period. If this is done the VOs will,
however, then be subject to income tax in the tax year during which ownership of the vehicles passes to them. The amount to be taxed
will be equal to the original cash cost of the vehicles less a depreciation allowance which is determined according to the diminishing
balance method at a rate of 20% per annum of the cost of the vehicles for the full duration of the leases.
To implement this scheme the City of Cape Town may have to be registered as a financial services provider in terms of the National
Credit Act.
4.4 Option D
Under Option D a financial institution such as a bank, as a tax paying entity – and owner of the vehicles – is able to reduce its own tax
liability by the amount the vehicles depreciate. It should thus be able to pass the benefit of this on to the VO by charging a lower interest
rate to the VO. This means that the amount the City needs to pay to the VOs to pay for the lease would be reduced.
Under this option the vehicles could be given to the VOs at the end of the 12-year period thus giving them an incentive to run and
maintain them well. However, if so, the VOs will be subject to income tax in the tax year during which ownership of the vehicles passes
to them.
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As explained under Option C the amount to be taxed will be equal to the original cash cost of the vehicles less a depreciation allowance
which is determined according to the diminishing balance method at a rate of 20% per annum of the cost of the vehicles for the full
duration of the leases. Based on current tax law, the VOs will then be able to claim a depreciation allowance based on the real value of
the vehicles at that time (which value may be negligible).
The bank is highly unlikely to go bankrupt – thus the potential loss of vehicles by this mechanism is minimized.
A drawback for the City under this option is that the bank will charge a fee for the service and the bank may be required to verify the
credit worthiness of each VO before it enters into any agreement with the VOs. However, investigation has shown that this fee will be
limited assuming, as indicated, the City stands behind the lease payments and uses the capital proceeds from the sale of the vehicles
as collateral in respect of the vehicles.
4.5 Results from financial modelling of the options
Option A has been excluded because of the risk of loss of the vehicles in case of the vehicle operator going bankrupt. Were this to occur
a substantial investment made out of the PTISG would be lost.
Of the remaining options Option D is the most advantageous financially. This is based on the full tax benefit from depreciation that
accrues to the bank being passed on to the system in the form of reduced lease charges, while the bank is paid a market related fee for
the service. It is estimated that, based on reasonable assumptions in respect of fees and interest rates, and assuming all payments to
the vehicle operators for the purpose of paying the lease are made out of the collateral account established with the proceeds of the
sale of the vehicles to the bank, at the end of the 12 year period an amount of approximately R32 million will remain in the account for
every R100 million of the original price at which the vehicles are sold to the bank.
5. Conclusion
Taking into account all three objectives mentioned above Option D is the preferred option. While Option A is potentially the most
advantageous financially, it carries intolerable risk in that the vehicles, which will have been paid for out of the PTISG, might be lost to
the system in the event the vehicle operating company goes bankrupt.
Based on modelling undertaken, Option D is the next most advantageous financially. Other advantages include the fact that the leasing
of assets, such as vehicles, is a core business of many financial institutions, while the City does not customarily lease or sell vehicles on
an instalment sales basis. Indeed, it is possible that the sale of vehicles on an instalment sale basis would not be permitted in terms of
the MFMA.
Introducing a financial institution in this manner enables such institutions to become familiar with the system while also allowing the
vehicle operators to build up a track record for future transactions. This is likely to be beneficial in future phases when the preferred
model is implemented, whereby the vehicle operators buy the vehicles out of the per kilometre fee.
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Annexure F: Information document – Proposed transactions to
establish desired title holding and use of MyCiTi buses
CITY OF CAPE TOWN
M YC IT I
Integrated Rapid Transit Project Phase 1A
Information statement on proposed transactions to establish
desired title holding and use of MyCiTi buses
Issued in terms of the Municipal Finance Management Act
27 August 2010
Preface
This information statement is required in terms of processes that must be followed in cases where the City wishes to implement the
transactions it envisages in structuring the title holding of buses in its MyCiTi project.
The information statement is structured so as to meet the information requirements as set out in relevant legislation. This transaction
forms one element of the Business Plan of the MyCiTi project. The full Business Plan and other relevant documents are available at
www.capetown.gov.za/en/irt, and click on “Public participation”.
This information statement is closely linked to the information statement also available on this website entitled “Information statement
on proposed transfer of MyCiTi buses”. The two statements have been issued separately because they seek to address different
elements of applicable legislation. In this respect some duplication is inevitable.
The Annexes referred to in this document are those appearing in Annexure E, starting from page 151.
Introduction
This information statement is issued in compliance with the relevant sections of the Municipal Finance Management Act (no 56 of 2003)
(MFMA) which requires certain information to be made public where transactions governed by sections 46 to 50 of the Act are
implemented.
This statement addresses the specific matters to be publicised when embarking on such transactions. Annex B of this information
statement contains an explanation at a high level both of the envisaged transaction and the reasons why the City wishes to follow this
route rather than other alternatives. It is recommended that this Annex be read in order to gain a clearer understanding of the context for
the specific information set out in this statement.
The public, the National Treasury and the Western Cape Provincial Treasury should note that there are a number of other public
participation processes, also relating to the MyCiTi system, running close to or overlapping with this one, but which – because of the way
legislation is structured – need to be publicised separately.
Persons wishing to have a more comprehensive understanding of the MyCiTi system and the decisions potentially to be taken and
transactions potentially to be concluded by the City in relation to this system are encouraged to consider those processes, and the
documents relating to them, in addition to this one. The most significant and comprehensive explanation of what the City envisages
implementing is contained in the Business Plan, which is available elsewhere on this website.
Reasons for inviting public comment in this instance
The MFMA regulates the circumstances in which municipalities may incur long-term debt (that is, debt repayable over a period longer
than one year), including the provision of long-term security for contractual obligations. (The MFMA defines debt as including contingent
liabilities.)
The MFMA also prescribes the process, which includes a public participation process, which municipalities must follow before they
decide to incur long-term debt or to provide long-term security for contractual obligations.
It is possible (but not definite) that one of the features of the bus transaction will be (i) an undertaking by the City to the bank to make
good financial losses suffered by the bank as a result of non-payment of lease payments by the vehicle operators and (ii) the provision
of security for that undertaking. The reason the City cannot, in this information statement, definitively indicate whether or not it will
provide such security is that the proposed commercial details of the bus transaction have not been finalized. However, because of the
possibility that the City will give such security, the City is hereby inviting comment from the public, as well as from the National Treasury
and the Western Cape Provincial Treasury, on the proposed security, as required by section 46(3)(a) of the MFMA.
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It should be stressed that the City is not proposing to borrow money for the purposes of the bus transaction – in other words, the City will
not be incurring debt in the narrow sense of the word. However, because of the wording of relevant legislation it is necessary to follow a
process akin to that required when incurring debt in the sense conventionally understood.
Particulars of the envisaged undertaking and security
The basic features of the bus transaction are that –
1. the City will sell the buses to the bank in exchange for a purchase price;
2. the City will deposit the purchase price in a ring-fenced interest-bearing bank account;
3. the City will withdraw money from that bank account in order to pay the vehicle operators what it owes them by way of
service fees in respect of the amounts they are obligated to pay for leasing of the buses needed for providing the relevant
public transport services; and
4. the bank will lease the buses to the vehicle operators in exchange for lease payments.
It is possible that, instead of, or in addition to, the features outlined in 2 and 3 above, the City will (i) undertake to the bank that it will
make good financial loss suffered by the bank and arising from non-payment by the vehicle operators of the lease payments and (ii) give
security for that undertaking. This means that, if a vehicle operator defaults in its lease payments to the bank, the bank will be entitled to
call on the City to make good its loss. The City would make any such payments also from the ring-fenced bank account described
above. At the same time the city would cease to make concomitant payments to the defaulting operator.
Note that the contractual arrangements will be established in such a manner that if the vehicle operator defaults on its obligations the
leased buses will be able to be shifted to a different operator determined by the City through appropriate processes.
Through this mechanism the city is assured that if an operator is replaced the vehicles continue to be made available for public transport
services and the payments made by the city in respect of the buses continue as before.
Purposes for which the proposed undertaking and security will be given
The first reason for the proposed undertaking and security is that, in exchange for giving the undertaking, the City will require the bank to
agree to so-called "step-in rights" in the City's favour. This means that, if the vehicle operators default and the bank intends to cancel its
lease agreement with them and regain possession of the buses, the City will have the ability to ensure that the buses remain available
for the provision of public transport services.
The second reason is financial. In order to understand the potential financial benefits of the proposed structure one needs to understand
the relationship between
(i) the lease payments which the vehicle operators pay the bank;
(ii) the service fees which the City pays the vehicle operators; and
(iii) the bus fares which users of the service pay.
The service fees will take the form of an amount per kilometre which the City agrees to pay the vehicle operator for the provision on
public transport services on the City's behalf; together with an amount in respect of the cost of the lease of the buses to the operator.
Roughly speaking, the higher the lease payments which the vehicle operators pay the bank, the higher the service fees which the City
pays the vehicle operators will need to be, in order to cover the reasonable and legitimate costs which the vehicle operators incur in
providing the service. The higher the service fees which the City pays the vehicle operators, the higher the bus fares will need to be, in
order to cover the relevant portion of the costs of providing the service.
The benefit of the undertaking and associated security is that, if the bank has certainty regarding the payments owing to it, it will charge
the vehicle operators lower rental payments than would be the case with no security. (This is because the bank carries less risk.) Lower
rental payments should translate in turn into lower service fees to the vehicle operators – and, in turn, to lower bus fares for consumers.
The security and undertakings will be covered by the proceeds of the sale of the vehicles to the banks.
Value of transaction
The amounts in respect of which proposed undertakings made or security given will be equivalent to the value of the buses that form
part of the transactions plus any fees payable to service providers involved in effecting the transactions.
The City took delivery of the initial 43 MyCiTi vehicles during May and June 2010. It is envisaged that these 43 vehicles will be
transferred around February 2011 when the MyCiTi starter service is due to commence.
When valuing the assets, account must be taken of the fact that the vehicles already purchased, although very new, will be used during
the process of public consultation and thus will depreciate in value, and the vehicles not yet purchased must still be acquired through a
tender process. Thus, the following information is provided in material compliance with the provisions of the Act:
At the time of writing this report, these vehicles are between 2 and 3.5 months old, and have between 1 000 and 15 000 kms on their
clocks. Barring very minor body damage to some, all are in excellent condition, other than one that was in a relatively serious
accident and two that were in minor accidents. The vehicles that are damaged will be repaired through the insurer. The value of all
these vehicles is estimated on average to be at least 90% of their purchase price.
The exact value of the vehicles will be set at a date closer to the actual transfer. This will be based on the original price of the vehicle
as stated above minus an estimation of depreciation determined by an independent valuer appointed by the City.
It is envisaged that a further 267 vehicles will be transferred over the following three years as Phase 1A of MyCiTi is implemented.
These vehicles are not planned to be used prior to transfer and thus are planned to be transferred at the same price at which they
are purchased by the City in terms of the normal supply chain management processes.
The indicative value of MyCiTi Phase 1A initial fleet to be transferred is as set out in Annex A, which is subject to review.