1. TRANSPORT TRENDS/FUNDING IN SA
July 2019
Hein Stander Pr Eng
Johan Brink Pr Eng ITS

2. QUESTIONS
2016 Paper - illustrating transport trends
Any major changes?
Criticism on little research – effort to contribute to debate/understanding of situation
Further question – financing public transport?
Balance between investment on private vs public transport correct?

3. CONTENTS SA Demographics and Transport - population - economy
- registered vehicles
- vehicle sales
- driver licenses
- fuel taxation
- fuel consumption
SA Social Services Spending
Public Transport Transfers
FFC Investigation
BRT Cape Town
Example Tygerberg, Cape Town
Conclusions

5. SA POPULATION
2018 – approx 58m people
Growth 2008 to % p.a. – now ±1m/year
Trend continue – 69m by 2030

6. SA – GDP GROWTH
Declining since 2011 (3.3%) – 2018 (1.1%) – ave since %
Considering pop growth - on ave everyone getting poorer
Affording improved transport infrastructure more difficult than before

7. NUMBER REGISTERED VEHICLES
Growth – 3% pa on ave – 2017 only 2%
Higher than growth in population and GDP

8. NEW VEHICLE SALES NAAMSA (LOCAL + EXPORT)
SA sales show decline 2013 to 2016
Positive growth 2017 and 2018
Industry vision ±1 mil local + export by 2020 ( k+)

9. VEHICLE OWNERSHIP
SA veh/1000 population
Compare developed countries: to 800
Conclude:
- Vehicle ownership potential to grow substantially
- Pressure for road space, congestion
- Car industry ±7% of GDP – work opportunities, exports, economic well being

10. DRIVER LICENSES
Growth – 4.4% pa – higher than growth in vehicle numbers
Confirms high rate of motorisation
Impact MAAS (eg Uber) – difficult to predict
Persons with licences ± = number of reg vehicles

11. FUEL TAXATION
Fuel levy past decade > 250%, RAF >315%
Productivity is reducing, revenue retained strong growth real terms
Distance based tax – expected problematic in view of e-tolling – collection expensive

12. FUEL CONSUMPTION 2007 – 2018 Petrol cons declined 0.6% pa
Same period diesel cons grew 1.8% pa
Total cons 2018 – 7% higher than 2007
Ave fuel price increase past 12 years ±7.3% p.a.
In view of electric car growth - remain at this level for next 5 years?

13. SA SOCIAL SPENDING SA most unequal country in world – Gini 0.63 (2015)
% of R1.67 trillion budget for social services – social grants/education 60% of this
Transfers for pt – 4% of this – R38.6 billion
Social spending 20% of GDP

14. INTERGOV PUBLIC TPT TRANSFERS (FFC, 2016/17)
60% to PRASA
SANRAL/Prov Maintenance grants included here?
PT Operating and Network Grants included
Gautrain R1.6 billion excluded?
SAA could also be listed
Order of magnitude believed correct

15. FINANCIAL & FISCAL COMMISSION
FFC – advise parliament on financial matters related to gov
– identified need for appropriate funding model PT
– investigation 2017
Resultant Div of Rev Submission (2018/19) concluded:
- Funding gap urban mun’s – additional taxation can assist – national transfers still required
- Settlement patterns need reversal to address cost challenges
- Current Implementation PT Strategy unaffordable, instead reduce PT costs, implement incrementally
Recommendations:
- DOT review PTNG, shift to local revenue, ring fence local sources for pt (eg portion fuel levy generated in city)
- DOT approve/pilot consolidation pt functions - defined NLTA
- DOT should support IPTN’s that are financially sustainable

16. PRIVATE TRANSPORT Balance between spending on modes required
Fuel levy general revenue (not dedicated to anything) – even so, tax revenue exceed spending on roads – important source – 19/20 R80b, new carbon tax R2b, RAF R45b, licences R10b, etc
Why some argues that private road users need to pay for pt not clear – not considered for hospitals, schools, etc
Vehicle manufacturing very important for economy – 30% of manufacturing output, 7% of GDP
Balance between spending on modes required

17. CITY OF CAPE TOWN BRT 2032
Transport Forum March 18 (Fortune/Moore) – Business Plan
47% Recovery of operating cost
Subsidisation thru: Nat grants, 6% portion property tax, parking and other revenue
Cities requested to earmark 4% own revenue for IPTN’s

18. EXAMPLE TYGERBERG AREA CT
250 ha north of N1 in Bellville, surrounded medium to high income residential (incl regional shopping centre, offices)
Business land use growth:
- past 20 years – ±300k to ±600k GLA
- next 40 years – to ±1500k GLA (eventual ave bulk 0.6)
With planned BRT (3 trunks + feeders) and road upgrades
- Same levels of service
- 10% Shift from private to public transport is predicted
- Development contributions approx cover road upgrade cost
- Future pt subsidies substantial (based on current practice)

20. PRESENT WORTH COST – 40 YEARS

21. CONCLUSIONS
SA unique financial situation – not comparable with developed first world
Population growing faster than economy – on average everyone getting poorer – improving tpt infrastructure more difficult
Growth in registered vehicles and driver licenses point to increasing motorisation
Vehicle ownership (211/1000 pop) low relative to developed world (500 to 800)
Fuel taxation – even though productivity is reducing – grown in real terms – replacement by distance based tax considered problematic (e-tolls experience) – need thorough investigation
Fuel consumption – petrol usage declining, diesel growing – in total no indication yet of turning point
SA social spending – 60% of budget – 2018/19 R1trillion - pt low at 4% of total

22. CONCLUSIONS CONTINUED
8. PRASA receives 60% of pt transfers – network and operational grants also substantial – Gautrain and SAA tend not to be mentioned
FFC investigation – shift to increased local funding of pt, consolidation of pt functions, IPTN’s sustainable
Argument that private road users should pay for pt, questioned – search for balance between usage of modes
Projection Cape Town BRT – subsidise thru nat grants and inter alia 6% of property tax – in line with FFC recommendation
Investigation Tygerberg – consequences planned pt network – serious financial implications
SA AT CORRECT INVESTMENT BALANCE BETWEEN PRIVATE/PUBLIC TPT? Status quo is being afforded – changes can have major financial consequences – should be understood/considered

23. FINALLY, SO WHAT OPTIONS MOVING FORWARD?
Tax differently? – fuel taxation grows, productivity down, EV’s medium term impact, investigate options
Tax more? – SA 8th highest tax/GDP (2017/18 – 26%) – Min Finance “ceiling”
Distribute revenue differently? – suggested, happening eg CT
Other side coin – operate more efficiently/honestly

24. Thank you