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THE PUBLIC TRANSPORT INTEGRATION CHALLENGE:
WHAT ROLE FOR THE FISCAL SYSTEM?
Southern African Transport Conference 4 July 2016
Why public transport?
• It makes economic sense: – promotes economic benefits of agglomeration improving efficiency – enables trade – facilitates access to markets and services – makes efficient use of resources – enhancing employers’ access to a larger labour pool at lower costs
• It makes social sense – enhances access to job opportunities – enhances personal choice – even creates jobs eg in European cities, such as Brussels,
Amsterdam, Barcelona and Paris, public transport is largest city employers
• It makes environmental sense – Reduces carbon footprint and reduces fuel consumption
2
Public Transport Funding in South Africa
Have we done enough? • Over last 10 years, over R 167 billion in infrastructure and
operations subsidies with average annual growth 18% • This spending is still on the increase BUT: • It is not enough:
• Still, too many poor households spend too much on PT • more than 60% households earning less than R 500 spent
more than 20% on transport (rural as high as 31%) • From the public sector, our spend is also not efficient as it
should be as shall be seen • And we are playing catch up to private transport use
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Some particulars of spend
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Who are the big beneficiaries of this increased spend?
Rail and PRASA is • Almost 40% growth in spend
2013/14-2015/16) mostly CAPEX
• Between 2012/13- 2016/17 rail to absorb > 60% of spend
• Allocations for bus are more modest between 5-13%
-‐
5
10
15
20
2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15
Billion
s
Rail spend -‐ capital and ops for Gautrain and PRASA 2004/05-‐2014/15
0,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
PTOG PTNG
Billion
s
Bus Subsidies (MTEF 2016/17 -‐ 2018/19)
2016/17
2017/18
2018/19
We need to subsidise operations of public transport Indeed the world over public transport is almost always subsidised Prov Bus and Gautrain most subsidised service relative to ridership Mini bus taxis not We are subsidising the middle class the most.
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Mode Operating subsidy per passenger per trip
Fare Box Recovery rates
Municipal Bus R 16.75-‐ R 24.36 13%-‐31%Conventional Bus R 11.40 -‐ 16.89 31%-‐44%Bus Rapid Transit R 11.76 -‐ 15.12 28%-‐44%Mini bus taxis 0 0Gautrain R60.30 57%PRASA Metrorail R3.73 R 39%
Reference: National Treasury Expenditure Performance Review of South Africa’s Public Transport and Infrastructure systems, 2014.
Provincial bus , 39%
Municipal bus , 9%
BRT , 8% Mini-‐bus taxi , 0%
Gautrain , 15%
Metro rail , 29%
Share of total operaPng subsidy Pie
Comparatives on efficiency (operations)
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On face value mini bus taxis are the most efficient…. BY FAR … and they serve the poor largely. They serve the most (67%); collect the most (71% fares) BUT receive no operating subsidy.
Provincial bus
Municipal bus BRT Mini-‐bus taxi
Gautrain Metro rail
No. of passengers carried 8% 1% 2% 67% 1% 21%
Fare revenue 9% 1% 2% 71% 7% 10%
Operating costs/ passenger (R) 22.00 24.42 20.90 8.09 140.11 9.20
Fare revenue/passenger carried (R)
8.60 4.39 7.77 8.09 77.75 3.62
Operating subsidy 39% 9% 8% 0% 15% 29%
0%
20%
40%
60%
80%
Provincial bus
Municipal bus
BRT Mini-‐bus taxi Gautrain Metro rail
Fare Revenues vs OperaDng subsidy share per mode
OperaDng subsidy Fare revenue
Some key highlights on PT operations
• By and large our public transport provision is very costly and not efficient – In our current constraint fiscal environment, there must be better way
• Provincial bus: Apartheid service for black townships to places of work. – Very costly because of distances and extreme peaking
• Municipal bus: Metro Bus, Brakpan Bus, Tshwane Bus etc – High operating costs, although shorter trips
• Bus Rapid Transit – Heralded shift in thinking; attention to spatial transformation – Has relatively good user satisfaction where it operates – Has however resulted in very high deficits
• Gautrain – High user satisfaction – Very costly (between 2005/6-2013/14 represents 20% of total PT
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Some pointers
• Mini bus taxis: carry more than 2/3 of people in metro areas: – effiicient carrier esp. over shorter routes – no operational subsidies – rely on informality – high societal costs linked to service
• Metro rail (PRASA): – Provided through 4 regional operators that is Western Cape (Cape
Town); Gauteng (Joburg, Ekurhuleni, Tshwane) Kwa Zulu Natal (Ethekwini) Eastern Cape (Buffalo City and Nelson Mandela Bay)
– Very low prices for passengers – Significant capital infusion over the next couple of years including
recapitalisation and line extensions
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Some pointers on Public Transport Subsidies
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0%
20%
40%
60%
80%
100%
Provincial bus
Municipal bus
BRT Mini-‐bus taxi Gautrain Metro rail
Fare box coverage
Fare box coverage
It is a struggle world wide but better results have been achieved eg fare box recovery Taiwan and Hong Kong > 100% USA- 26%-56% Canada – 39%-84% Europe – 40%-91%
And despite spend ….
Use of private transport is growing faster than public transport While mini bus taxis dominate market > 3 mill trips, growing by 50% BUT There has been remarkable growth in the car; by 62.5% trips and 5.8% of market share growth
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-‐0,50% -‐1,30% 2,60%
5,80%
-‐6,50%
-‐0,10%
-‐10,00% -‐5,00% 0,00% 5,00% 10,00% 15,00% 20,00%
-‐20%
20%
60%
100%
Trains Bus Taxi Car Walk Other
Public transport Private Transport
Modal Share and modal share change over 10 years
Modal share (2013) Modal share change %
26,4%
11,5%
50,7%
62,5%
8,1%
28,3%
0
2
4
6
8
10
Trains Bus Taxi Total Car Walk Other Total
Public transport Private Transport Millions of trip
s
Total trips per mode and growth in no. of trips over 10 years
Total daily trips (2013) % change daily trips per mode (2003-‐2013)
Then where are the challenges?
• There is a lot of inefficiency in the different public modes – Part of the challenge is creating greater efficiencies within
the modes themselves • There is high fragmentation of institutions and funding flows
– The increased investment could be enhancing inefficiency!
• We are not doing nearly enough for the poor – Public transport continues to be a social inhibitor for poor
households: affordability, access to jobs and opportunities • It is costing our economy
– We are not creating the agglomeration benefits we so desire with the spend
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But a bigger challenge and at the heart of it is..
Providing public transport in South Africa is inefficient because we have inherited inefficient spaces.
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Without changing spatial form it will always be costly to all
Our public transport demand is: One way, highly peaked, with little seat turn over
This is COSTLY and unsustainable
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All passengers travel long distances, in the morning peak, from residential areas to centres of employment and return in the evening; densification on this basis is not efficient
Origin Destination
Passengers make short trips – some in the forward direction and others the reverse – along a corridor throughout the day
Reference: National Treasury Expenditure Performance Review of South Africa’s Public Transport and Infrastructure systems, 2014.
We need to…
• Rethink the role of PT spend: it can be potent spatial influencer and it is not just about transport. – With other built environment functions such as housing,
infrastructure e.g BEPP uses public financial levers including PTNG and other grants (ICDG; NDPG; INEP; USDG; HSDG) and aim to leverage private capital to spatially target and drive change
• Better align and integrate to: – obtain greater modal integration, and integration of PT
planning, and operations and • Be more innovative
• leverage off efficiencies of mini bus taxis • current “disruptive opportunities” presented by technology :
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We need to…
Empower our cities and towns: • To plan better through their IPTNs: the NLTA envisaged well
planned transport systems that guides all public transport investments
• To facilitate inter modal integration and coordination within their space (harmonisation of fare structure, scheduling, and ticketing) – key for passenger experience of public transport system
• To control their other built environment functions: assignment should happen when and where appropriate
• To capacitate themselves
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