NCOP PRESENTATION, 19 MARCH 2013

1. NATIONAL ROAD BASED PUBLIC TRANSPORT TRANSFORMATION PLAN: from bus to public transport subsidisation NCOP PRESENTATION, 19 MARCH 2013

2. Presentation Outline Background Information Provincial Status Quo Investment in Public Transport Way Forward Funding Requirements Implementation Programme Key Success Factors (Risks) Conclusion 2

3. Background Information For the past 14 years subsidised bus contracts remained stagnant and most have been managed on a month-to-month basis since 2000 As a result the current system is characterised by out-dated information in relation to routes, passenger volumes, passenger kilometres, poor quality service and a public transport system that is in serious distress AG has started to query the month-to-month nature of the contracts leading to qualification of audit opinions and irregular expenditure disclosures In most areas there are no plans (IPTN’s, ITP’s, etc) There is an urgent need to stabilize the operating environment in the short term and realise full integration in the long term 3

4. Background Information Provided for in Section 41 of the NLTA (No. 5 of 2009: 41. (1) Contracting authorities may enter into negotiated contracts with operators in their areas, once only, with a view to— (a) integrating services forming part of integrated public transport networks in terms of their integrated transport plans; (b) promoting the economic empowerment of small business or of persons previously disadvantaged by unfair discrimination; or (c) faciltating the restructuring of a parastatal or municipal transport operator to discourage monopolies. (2) The negotiations envisaged by subsections (1) and (2) must where appropriate include operators in the area subject to interim contracts, subsidisedservice contracts, commercial service contracts, existing negotiated contracts and operators of unscheduled services and non-contracted services. 4

5. Background Information…(modal split -road based) 5

6. 6 Background Information (Economic Rationale for Funding Support & Subsidisation) • Worldwide extensive funding support for public. Grounds: • Economic: Vital for functioning and most economically efficient means of (urban) travel • Society: Equity, basic right of access • Environmental / sustainability - least cost • Government funding to improve transport system effectiveness & sustainability and help achieve (spatial) development policy goals.

7. 7 International Review-Total Cost of Transport Strategies % Metropolitan GDP Source UITP 2000 Source UITP 2006 Conclusion: Compact cities with strong bias to public transport spend much less on transport with significant social and economic benefits

8. International Review :Urban Densities and Operating Cost Recovery 8 Background Information (International Review-Total Cost of Transport Strategies) Conclusion: Making public transport attractive (to all) requires major investments and subsidy. Only with increased corridor densities are operating cost recovery likely to improve significantly.

9. International Review :Plot of Systems based on Quality & Density 9 Background Information (International Review-Total Cost of Transport Strategies) High Quality Developed Asian. Sustainable, Profitable W.Europe, Strong policy favouring PT US/Aus, low density auto dependent Very high external costs E. Europe, Centrally Planned for PT. Where next? High Density Low Density Latin America. Africa, Informal, unsupported Operational Breakeven Line S. Africa Developing Asian. Sustainability issues Low Quality

10. Background Information…(subsidized services spread) Source: GIPTN Comparators: PTOG Subsidy • Long urban commuter routes • Long distance rural to urban commuter trips Rural settlements linkage to regional centres • Transport to mines • Some rural to urban routes Ex-homeland to main urban routes • Rural linkage to regional centres • Intra-Urban Routes Exclusively intra-urban routes

11. Background Information… (subsidy funding history) 11

12. Provincial Status Quo (PTOG Contracts) 12

13. PTOG split per Province 2012/13 PTOG allocation R4,317,269,000 13

14. PTOG split per contract type About R2.9billion of the R4,3billion annual bus subsidy (PTOG) goes to interim contracts The amount exclude provincial allocations (Limpopo, North West and Eastern Cape) 14

15. 18 Contract Cost Analysis Long trips Inter-work Better cost/km 1 rtn trip v low pax/bus. High cost/km V low fare ! High per trip Subsidy Long distance. Less dist. low pax/bus High sub. 1 rtn Long trip High cost/km

16. South Africa – Current Funding Picture 14 Current PT Investments Operating : Benchmark = 8 to 16 (12 Cities) (Rbn) National Government Funding (Rm) Capital: Benchmark + Backlog = 16 to 24

17. 23 Interventions • Main Metro’s • BRT system on multiple main corridors • BRT “lite” and integrated bus operations on secondary corridors • Dedicated BRT System costs include • Dedicated BRT Roadway (inc.pavement reconstruction) • Feeder routes • New stations • New vehicle fleets • Integrated ticketing system • Operational control centre • Full replacement of current road-based system • Other Metro’s & Emerging Cities • Single high volume corridor • Priority bus trunk route • Full /lite BRT single line in larger cities. • Other areas comprise bus & feeder integrated scheduled network on existing routes, with some priority on busy corridors. • Full replacement of current road-based system

18. 24 Interventions • Towns • Formal bus system • Inter-town services • Mixed fleets including • Buses • Midi buses • Taxis • Full replacement of current road-based system • Scheduled services • High Density Rural and Rural • Formalised mixed operations • Vehicle re-cap • Scheduled daily services to main centres • Weekly services to regional towns • Minimal infrastructure investments • Sparse Rural • Selected interventions where viable • Weekly & monthly services to towns • Sharing services with health transport and scholar transport • Brokering, flexible scheduling and confirmation of travel services • No infrastructure costed

19. Way Forward Why the need to transform: For the past 14 years subsidised bus contracts remained stagnant and most have been managed on a month-to-month basis since 2000 As a result the current system is characterised by out-dated information in relation to routes, passenger volumes, passenger kilometres, poor quality service and a public transport system that is in serious distress AG has started to query the month-to-month nature of the contracts leading to qualification of audit opinions and irregular expenditure disclosures In most areas there are no plans (IPTN’s, ITP’s, etc) There is an urgent need to stabilize the operating environment in the short term and realise full integration in the long term. 19

20. How should the transformation be approached? Way Forward APPROACH Negotiate PURPOSE Integrate GOAL TRANSFORMATION • Phase 1: Stabilisation that seeks to move from month-to-month and interim contracts by negotiating them in terms of Section 41 of the NLTA even in the absence of IRPTN’s. • Phase 2: Then integrate the services into Integrated Public Transport Networks as envisaged by both the National Land Transport Act (NLTA) and the Public Transport Strategy with full integration as the main objective. 20

21. Phase 1: Stabilisation Funds permitting identify interim and/or old order contracts to be negotiated. Initially target those that need to be unbundled and ensure that at least one such contract per province is negotiated. Identify role players (mainly industry role players whose operations will be affected by the targeted contracts/ routes) Develop an national implementation work programme and involve the municipalities. Fast track the removal of impediments; notably legislation obstacles (develop a cooperation framework to deal with the contracting authority challenges) Integrate the different funding sources, starting with the soon to expire TRP allocation (as taxis will be integrated into mainstream formal public transport system). Mobilise more funding Way Forward 21

22. Way Forward • Phase 2: Full integration based on IPTN’s • Address the contracting authority challenges in the NLTA. • Review the Public Transport expectations in relation to the “12 cities” requirements with regard to IRPTN’s • Adopt a differentiated approach for different PT challenges in the country High Density Urban Setup (travel demand, congestion, travel time, etc Low Density Rural Setup (availability, access etc.) Quality PT services to enable access and mobility Dedicated infrastructure & services (BRT?) • Ensure the modes (rail, bus and taxi) compete for the road and not on the road. • Integrate (merge) the funding streams ( PTIS, PTOG, TRP, Green Fund, etc.). • MinMec approved the plan (concept) in principle 22

23. Subsidy Requirement (Stabilisation) 23

24. Funding Requirements (full integration) 24

25. Proposed programme per province 25

26. Proposed programme per province 26

27. Proposed programme per province 27

28. Key Success Factors TRANSFORMATION Adequate (additional) and sustainable funding Good, strong inter-sphere relations Uniform standards and guidelines. Effective M & E From leadership, management and stakeholders. Communicate all the time Contracting role clarification; legal justification to negotiate v competition Legislation (un)certainty Institutional Structures Support Commitment Funding THE PLAN • All of the above can also be viewed as RISKS if not attended to 28

29. The Plan was approved by MinMec. FUNDING remains the main impediment to achieve total transformation and integration. The Taxi Recapitisation Programme will continue until taxis are fully integrated in mainstream PT. In its current form the programme has to run for a further 2 years to allow for: Finalisation of the option analysis Securing adequate funding Efficiencies will have to be introduced into the programme Conclusion 29

30. THANK YOU