African Union of Public Transport Workshop on Best Practice in Public Transport

Speech by Donald Grant, Minister of Transport and Public Works

Good evening ladies and gentlemen

I am honoured to have received an invitation to address you all this evening. Seeing this gathering of people, brought together by a common desire to make public transport better, I am filled with confidence that we can succeed in this very important goal. I am sure that this workshop will see a sharing of ideas that will place us firmly on the path of improving public transport provision, and increasing mobility not only in South Africa, but on the entire African continent.

Why Public Transport?

Good quality public transport systems are a core component of any prosperous, equitable and sustainable society. They form the backbone of any economy, and provide access for a large portion of the workforce. It is arguably the single most important driving force of any economy throughout the world, with thriving economies being characterised by an efficient, reliable, and safe public transport system.

Improved public and non-motorised transport is critical for providing access to opportunities, especially for the poor and marginalised. Better public transport ensures the efficient movement of a large portion of the population, as well as supporting economic growth and attracting investment.

In the South African context, improved public and non-motorised transport, in conjunction with increased densities and Transit-Orientated Development, are prerequisites for overcoming the enduring spatial legacy of Apartheid and the continued low-density, car-orientated development that characterises the urban growth of today. 

This is a challenge that all spheres of government must respond to urgently.

Public Transport in the Western Cape

The majority of people in the Western Cape rely heavily on public and non-motorised transport for their mobility. What is also true is that public transport is often unsafe, insufficient, non-existent or unaffordable, while Non-Motorised Transport (NMT) users face great risk and long distances, with a general lack of adequate and safe facilities.

When it comes to commuting to work, in the urban parts of the province (excluding the Metro), 45% of work trips are conducted by public and non-motorised transport, while in the rural parts of the province 62% of trips to work are conducted on foot, with only 4% are conducted using public transport (NHTS, 2013). 

When looking at education-related trips outside of the Metro, 65% of them are completed primarily on foot, and 20% are completed using public transport (NHTS, 2013). 

The provision of improved public and non-motorised transport remains a priority for not only the Western Cape Government, but also of the City of Cape Town, other municipalities, and various other stakeholders. 

Requirements for investment in public transport

In the five decades prior to 2007, the South African Government prioritised investment in road infrastructure, and catered mostly for the expanding use of private vehicles, primarily benefitting a limited segment of society.  At the same time, urban planning was strongly car-orientated, taking cues from the United States and Canada.  The result was increased pressure on Apartheid-era fiscal resources as investment in public and non-motorised transport networks was minimal. 

Today, this legacy endures and has resulted in a significant investment backlog which government must address sooner rather than later. 

In a nutshell, the transport dynamic in South Africa is a clear illustration of the deep inequalities and socio-economic divides which continue characterise our nation across all sectors, including education, healthcare, and safety and security.  

The Western Cape Government is committed to driving public transport improvement in the province.  Two keys projects are currently being implemented to further this agenda, namely the George Integrated Public Transport Network (GIPTN) and the Provincial Public Transport Institutional Framework (PPTIF). 

The George Integrated Public Transport Network (GIPTN)

The George Integrated Public Transport Network (GIPTN) is the Western Cape Government’s flagship public transport improvement project, and the first non-metro public transport system of its kind. I, along with Premier Helen Zille and George Executive Mayor, Charles Standers, presided over the official ribbon-cutting ceremony to celebrate the roll out of the system last Friday, 16 October 2015.

We have partnered with the National Department of Transport, George Municipality and with local public transport operators to develop a safe, efficient, scheduled, and affordable bus service.  Phase 1 of the GoGeorge service began operating in December 2014 and three phases are currently operational.  The fourth, and largest phase, is due to commence operations during this 2015/16 financial year, and the 5^th and 6^th phase will follow.

The service is an 18 hours per day service, with a fleet of brand new, universally accessible buses which provide a comfortable and pleasant passenger experience.  The first three phases now boast 13 000 passengers a day. This is approximately half of the full GIPTN system envisaged. The full vehicle fleet of 95 buses has been delivered, including the first universally accessible minibus in South Africa.

We expect the full system will be rolled out by June 2016.

The GIPTN is an innovative project which displays a number of South African firsts, including:

• The joint development and implementation of the GIPTN guided by an Inter-Governmental Agreement (IGA) and the associated Financial Agreement (FA) between the Province and the Municipality of George.
• The full scale transformation of the existing public transport industry, who own 100% of the newly established Vehicle Operating Company (VOC) George Link.

A comprehensive industry negotiation process, which included all local associations and operators fully, lead to the signing of a 12 year negotiated contract between Government and the operator owned VOC in 2013, as well as a fair Compensation Agreement signed by operators in their individual capacities, who elected either to buy-in to the VOC or to buy-out of the system. 

The Western Cape Government has driven the development of the GIPTN and is providing extensive support to the project, including:

• An undertaking to cover the full operational shortfall of the GIPTN for the duration of the first contract term (12 years). Over R150 million has been spent in the last 3 years, with the 2015/16 contribution currently at R55million.  Over the MTEF period, the WCG has committed over R300m to the project. It is estimated that WCG’s financial contribution over the life of the project will amount to R1.5 billion.
• The provision of professional technical and business planning to support the project.  This includes extensive business advisory and legal support to the newly established VOC, in support of the empowerment objectives of the project.  It also includes extensive profession support to the Municipality to perform the functions necessary for the successful delivery of the Go George service.
• The establishment and staffing of a GIPTN Management Unit, to manage the operator contract and have oversight over day-to-day bus operations.   

In addition, the Western Cape Government has been instrumental in supporting the Municipality of George to gain access to extensive national grant funding, which amounted to R116 million in the 2015/16 financial year.  This is a remarkable achievement, given the relative size of the Municipality compared to the other 12 cities with access to national grant funding i.e. Cape Town, eThekwini, Tshwane, etc.     

The GIPTN system is a model for smaller South African cities seeking to implement infrastructure –light quality bus systems that are still efficient and of a high standard.  The Go George service is set to provide an efficient, comfortable, safe and affordable service to the people of George.  

The Provincial Public Transport Institutional Framework (PPTIF)

Building on the success of the GIPTN, the Western Cape Government aims to support other municipalities in the Western Cape to develop improved public and non-motorised transport networks.  This effort will focus on the development of pragmatic public and non-motorised transport responses across the province, with the focus initially being on priority areas and on the provision of affordable solutions that respond to the specific needs and context of municipalities across the province. 

As I have already mentioned, better public and non-motorised transport will improve the quality of life for citizens in priority municipalities. In doing so, we will be creating better access to opportunities, creating a conducive environment for business, attracting investment, and facilitating the emergence of a sustainable transport network.

The PPTIF aims to achieve progress by addressing the key constraints to development, including:

Capacity at the municipal level:

Outside of Cape Town and George, municipalities in the Western Cape have limited capacity to perform municipal land transport functions (NLTA s11(c)), including the planning, implementation and management of integrated public transport networks.  At the moment, national legislation fails to take into account the difference in capacity and resources between metropolitans and local and district municipalities; ignoring the real constraints faced by local and district municipalities. 

A lack of dedicated funding streams for local public and non-motorised transport improvement:

There are limited funding streams available for public and non-motorised transport improvement in non-metropolitan areas.  National funding is currently directed toward 13 priority cities.  This includes both funding for execution of the new transport functions required of local government by the NLTA, and funding to put in place the requisite infrastructure and systems for improved public transport systems. Owing to the spatial and economic dynamics of South African settlements, significant operational shortfalls are experienced in public transport improvement initiatives. The ability of local government, and of Provincial Government, to fund these operational shortfalls is very limited to non-existent.

The lack of well-defined or developed approaches to public and non-motorised transport in non-metropolitan contexts:

National legislation and policy has focussed on the development and implementation of urban Integrated (Rapid) Public Transport Networks in 13 cities. The model which has emerged incorporates high-specification technology, large-scale infrastructure development and full-scale formalisation of the minibus taxi (MBT) industry.  An appropriate public transport response for non-metropolitan areas, such as emerging cities, towns, villages and rural areas, has not reached a similar stage of development, with limited clarity on the appropriate way forward in these contexts. The George Integrated Public Transport Network (GIPTN) has been promoted as an example of public transport improvement outside the major urban centres in South Africa. However, the costs of the GIPTN and the implementation and transformation challenges the project has faced suggest that, while this is a useful model in certain locations, it may not be viable to roll-out similar initiatives across the country.

The complexity of industry transition:

The implementation of IPTNs in South Africa has involved the significant transformation of the taxi industry business model.  Under the IPTN model, new services are operated by Vehicle Operating Companies (VOCs) made up of former bus and taxi operators.  These companies are contracted to Government to provide new services at a higher standard. The legislation limits the duration of these operating contracts to a maximum of twelve years.  This transition process is fraught with risk for existing operators, with significant resistance having been experienced from the industry.  The current taxi industry business model is a reliable way of earning an income for operators, albeit riddled with sustainability challenges for the operators. As a result, it takes a lot of time to get the existing operators to become comfortable with the risks of the new system.

It also requires the introduction of sizeable financial incentives through high compensation packages.  In addition, the process of transforming an industry from one of small businesses, to a sustainable mature company with a multitude of responsibilities that comes with it, is exceptionally complex.  The result is a clear need for training and development of the industry to facilitate this transition, and to ensure that the services and VOC are run properly, which is currently not adequately provided for.

The Provincial Public Transport Institutional Framework (PPTIF) responds to these issues I have identified through the following key components:

Incremental Approach:  

The implementation of a three stage Incremental Approach is core to the PPTIF.  This approach aims to improve public and non-motorised transport user experience progressively over time, and in a manner which is affordable for government, limits the capacity burden on government, and presents lower risk to the public transport industry.  It also provides scope for empowering public transport operators, allowing them to become equipped and comfortable with an unfamiliar role and increased responsibilities.       

Institutional Model:  

The Western Cape Government will partner with priority municipalities to develop improved networks.  This will include the establishment of enhanced centralised capacity to support local improvement and the creation of a provincial unit for each priority area dedicated to providing local support, and designed to transfer to the Municipality as it takes on greater responsibility over time.  

Funding Support:

The Western Cape Government will provide funding for the implementation of the PPTIF, but will also work to access additional funding sources from the National Department of Transport, National Treasury and International Donors. We will continue to work with National Government to find financially sustainable models of public transport investment and operation in the province, beyond the GIPTN and the IPTN in the City of Cape Town.

Going forward, the Western Cape Government will implement the PPTIF by partnering with a number of priority municipalities to drive improvement to public and non-motorised transport, working to build the necessary capacity in both government and the industry, and to unlock the necessary funding required to bring about better, safer and more comfortable public and non-motorised transport.

Our commitment towards achieving this goal remains unwavering. The future of mobility and economic growth in this province will depend on the successful implementation of the Provincial Public Transport Institutional Framework, and further roll-out of the Go George system.

I thank you.