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

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

3. 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 (IPTNs, ITPs, etc) There is an urgent need to stabilize the operating environment in the short term and realise full integration in the long term

4. 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, subsidised service contracts, commercial service contracts, existing negotiated contracts and operators of unscheduled services and non-contracted services.

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

6. 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. Background Information (Economic Rationale for Funding Support & Subsidisation) 6

7. International Review- Total Cost of Transport Strategies 7 % local GDP on transport Developed citiesHigh density, pro-public transport & NMT5-7% Low density, car based12-15% Developing citiesLow density sprawling20% - 25%+ % Metropolitan GDP Source UITP 2006 Source UITP 2000 Conclusion: Compact cities with strong bias to public transport spend much less on transport with significant social and economic benefits

8. 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. International Review : Urban Densities and Operating Cost Recovery 8 Background Information (International Review- Total Cost of Transport Strategies)

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

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

11. 11 Background Information… (subsidy funding history)

12. 12 Provincial Status Quo (PTOG Contracts) ProvinceNature and number of contracts2012/13 Budget TotalInterimTenderedNegotiated Eastern Cape1100174,466 Free State7052192,872 Gauteng3482601,625,746 Kwazulu Natal392361808,279 Limpopo11713260,725 Mpumalanga7700439,003 Northern Cape610539,255 North West401380,686 Western Cape1100696,237 GRAND TOTALS1102769144,317,269

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

14. 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)

15. METROSTOWNSHIPS INTO METROSRURAL Putco Soweto Golden Arrow Putco Sandfontein NWS BotlhabaInterstate Ripple Effect (KZN ) Av trip distance462673814882 Trips / bus/ day2.04.25.42.23.91.7 Km/bus/day81129225160165152 Pax/bus/day136166203157176130 Pax/bus/km1.671.290.900.981.060.85 % subsidy60%63%62%61%81%69% Subsidy/pass.R 13R 12R 13R 18R 13R 25 Average fareR 8R 7R 8R 12R 3R 11 Cost/km362519301731 Contract Cost Analysis World Bank 250 1000+ 4.5 1 rtn trip v low pax/bus. High cost/km Less dist. low pax/bus High sub. Long trips Inter-work Better cost/km 1 rtn Long trip High cost/km V low fare ! High per trip Subsidy Long distance. 18

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

17. Interventions 23 Main Metros 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 Metros & 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. Interventions 24 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. 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 (IPTNs, ITPs, etc) There is an urgent need to stabilize the operating environment in the short term and realise full integration in the long term.

20. 20 How should the transformation be approached? 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 IRPTNs. 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. APPROACH Negotiate PURPOSE Integrate GOAL TRANSFORMATION Way Forward

21. 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

22. 22 High Density Urban Setup (travel demand, congestion, travel time, etc Low Density Rural Setup (availability, access etc.) Dedicated infrastructure & services (BRT?) Quality PT services to enable access and mobility Phase 2: Full integration based on IPTNs Address the contracting authority challenges in the NLTA. Review the Public Transport expectations in relation to the 12 cities requirements with regard to IRPTNs Adopt a differentiated approach for different PT challenges in the country 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 Way Forward

23. 23 Subsidy Requirement (Stabilisation)

24. 24 Funding Requirements (full integration) Province2012/13 Allocation 000 Taxi/SBO integration 000 Eastern Cape174,466523,398 Free State192,872578,616 Gauteng1,625,7464,877,238 Kwazulu Natal808,2792,424,837 Limpopo260,725782,175 Mpumalanga439,0031,317,007 Northern Cape39,255117,765 North West80,686242,058 Western Cape696,2372,088,711 TOTAL4,317,26912,951,805

25. 25 Proposed programme per province Implementation Programme for MTEF period 2014/15 to 2016/17 Province 2014/152015/162016/17 ContractFunding requiredContract Funding requiredContract Funding required Eastern CapeAB350 Phase 2119,466,000Algoa Bus Service57,985,012 Mayibiye Bus Service89,404,900 Total208,870,900 57,985,012 Free StateIBL50,424,139Maluti Bus Service10,849,884 Thebeyagae143,905 Total50,568,044 10,849,884 GautengNorth West Star126,315,607Putco Mamelodi8,168,867 Brakpan Bus Service3,939,927 Putco Soweto88,269,829Putco Kwandebele163,862,569 Putco Soshanguve67,319,861 Boksburg Operations9,797,808 South Western Areas34,419,242Atteridgeville BS17,353,511 Eldorado Park9,483,947Vaal Operations24,775,684 Total224,383,244 215,934,625 113,388,983 Kwazulu NatalImpendhle4,075,077 Combined Transport8,905,084BTI (Ulundi)9,896,966 Sizananimazulu16,194,338Ikhwezi25,476,666TansnatAfrica12,430,322 Duzi Bus Service985,250TansAfrica34,735,982Nondweni BS3,327,414 Thembekile1,334,750Emondlo8,401,122 RippleEffect7,189,715Dumbe1,298,864 Darnall1,364,175 Maphumulo1,112,452 Total29,779,130 81,294,345 25,654,702

26. 26 Implementation Programme for MTEF period 2014/15 to 2016/17 Province 2014/152015/162016/17 ContractFunding requiredContract Funding requiredContract Funding required Limpopo Great North Transport83,085,555Risaba2,349,907Putco131,079 Mabirimisa8,895,020 Lowveld Bus Service7,013,468 Bahwaduba12,105,064 Swangi's Transport9,918,162 Magwaba8,691,662Mukondeleli4,088,084 R Phadziri4,703,564Netshituni9,543,173 G Phadziri12,239,699Mulaudzi5,730,988 Enos9,917,489Mabidi784,345 Total83,085,555 58,902,405 37,209,299 MpumalangaBuscor116,108,991Megabus14,358,051Tilly's2,279,075 Thembalethu1,527,971Putco782,175 GNT5,456,581 Total116,108,991 15,886,022 8,517,831 Northern CapePhumatra3,339,478 Unitrans6,145,026 Total9,484,504 North WestAtamelang29,803,582Bojanala69,529,999 Phumatra6,284,887 Thari Bus Service54,346,413 Total90,434,882 69,529,999 Western Cape 0Golden Arrow231,399,282 Total 0 231,399,282 Grand Total812,715,250 741,781,574 184,770,815 Proposed programme per province

27. 27 Implementation Programme for MTEF period 2014/15 to 2016/17 Province 2014/152015/162016/17 ContractFunding requiredContract Funding requiredContract Funding required Limpopo Great North Transport83,085,555Risaba2,349,907Putco131,079 Mabirimisa8,895,020 Lowveld Bus Service7,013,468 Bahwaduba12,105,064 Swangi's Transport9,918,162 Magwaba8,691,662Mukondeleli4,088,084 R Phadziri4,703,564Netshituni9,543,173 G Phadziri12,239,699Mulaudzi5,730,988 Enos9,917,489Mabidi784,345 Total83,085,555 58,902,405 37,209,299 MpumalangaBuscor116,108,991Megabus14,358,051Tilly's2,279,075 Thembalethu1,527,971Putco782,175 GNT5,456,581 Total116,108,991 15,886,022 8,517,831 Northern CapePhumatra3,339,478 Unitrans6,145,026 Total9,484,504 North WestAtamelang29,803,582Bojanala69,529,999 Phumatra6,284,887 Thari Bus Service54,346,413 Total90,434,882 69,529,999 Western Cape 0Golden Arrow231,399,282 Total 0 231,399,282 Grand Total812,715,250 741,781,574 184,770,815 Proposed programme per province

28. 28 THE PLAN 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 TRANSFORMATION Funding Institutional Structures Support Commitment Legislation (un)certainty Key Success Factors All of the above can also be viewed as RISKS if not attended to

29. 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

30. THANK YOU