City of Cape Town Transport and Urban Development Authority - - PowerPoint PPT Presentation

City of Cape Town

Transport and Urban Development Authority

Competition Commission Market enquiry into Land-based Public Passenger Transport Industry

21 June 2018

[v2.0 20180620]

OUTLINE OF PRESENTATION

• Submissions to Competition

Commission

• Need for change
• Integrated Public Transport Network:
• CoCT’s integrated public transport

methodology

• 10 point plan

CoCT Submissions to Competitions Commission to date

• CoCT = City of Cape Town
• Initial submission

2017-09-13 (16pp)

• Response to detailed questions

Nov 2017 (28pp and 17 documents)

• Comment on Statement of Issues

2018-05-25 (5pp)

THE IPTN BUSINESS PLAN Need for change

NEED FOR CHANGE

• Cape Town’s transport system is facing very significant

challenges.

• A fundamental transformation of Cape Town’s public

transport system is required

• MyCiTi service has provided part of the solution,

however …

• Will not aim to replace all minibus-taxis (MBTs)
• Will still rely on improved conventional bus
• Will work with and enhance new generation

services

• BUT: What are the costs of not significantly improving

Cape Town’s public transport system?

Failure to significantly improve public transport twill lead to ….

• 1. Increasing inequality
• 2. Worsening congestion
• 3. Constraints on economic

growth and development

• 4. Increasing negative

environmental impacts. Need for public transport investment

BUT: Must ensure that it is

• Fiscally and financially sustainable
• Resilient and flexible to respond to

change

• Enable spatial transformation and TOD

• Failure to significantly improve Integrated Public Transport

Network will lead to increasing inequality, worsening congestion, serious constraints on economic growth and development and increasing negative environmental impacts.

Majority of Cape Town’s population in the Low Income bracket are located on the periphery, between 45-70km from jobs

Income groups per mode

User Access Priorities Across Cape Town (NHTS 2013)

• Majority of low income bracket

dependent on public transport

• The poorest people travel the

longest distances

• High cost of access: if no

change is made, residents will spend more time and more money getting to work and

• ther destinations than ever

before.

• Failure to significantly improve Integrated Public Transport

Network will lead to increasing inequality, worsening congestion, serious constraints on economic growth and development and increasing negative environmental impacts.

• High levels of congestion
• n Cape Town’s road

network

• Peak period

extended from 2hrs to 4hrs in last 10 years

• Minibus-Taxis and

most buses are stuck in traffic

• Cannot build our way
• ut of congestion
• Failure to significantly improve Integrated Public Transport

Network will lead to increasing inequality, worsening congestion, serious constraints on economic growth and development and increasing negative environmental impacts.

• Failure to significantly improve Integrated Public Transport

Network will lead to increasing inequality, worsening congestion, serious constraints on economic growth and development and increasing negative environmental impacts.

THE IPTN BUSINESS PLAN

• Integrated public

transport methodology

City-wide integration, infrastructure, strategic management BRT and Quality Bus Passenger Rail MBT & new generation and

• ther

services

Nature of integrative role differs for different sectors (eg rail infrastructure built by PRASA)

• Oversight
• Integrated network

design

• Integrated fare system
• Station services
• Control through an

integrated technology

• Regulation and

enforcement

• Infrastructure provision
• Infrastructure

Maintenance

• Depots
• Etc.

IPTN Business Plan’s Integrated public transport methodology

Prioritising scarce resources is key:

We need an approach which aims for optimal outcomes ... but can accommodate what actually happens

Flexible and robust

Implementing IPTN over time: Prioritising scarce resources is key

• Start with the ‘best’ and most financially sustainable services which

have the most impact

• Risk mitigation: If revenue is reduced through reduced grants or

fare income the affordability threshold falls

• 1. Enhancing

demand patterns (TOD and TDM)

• 2. Rail

ONE integrated, multimodal network

• 8. Physical

priority for public transport

• 9. Revenue
• ptimization
• 6. NMT
• 3. BRT along

key corridors

• 5. ‘Hybrid’

minibus taxi solutions

• 7. IT/tech

strategies/ AFC

• 10. Regulation,

Enforcement, Network Management

• 4. Quality

Bus

The IPTN BP 10 point plan

• 1. Enhancing

demand patterns (TOD and TDM)

Crucial for enhancing access at reduced cost

Key reason why City of Cape Town formed the Transport and urban Development Authority

• Deal with Apartheid nature of

settlement in Cape Town

• Low income people live far

from work opportunities

• Cannot solve transport

problems without engagement in urban development / Built Environment

• That is why national Green

Paper on Transport wanted urban public transport to reside with cities

Transit Orientated Development (TOD)

• 1. Enhancing

demand patterns (TOD and TDM)

Transport Demand Management (TDM) measures such as peak spreading – This has been the impact of the recent changes to the peak fares Ideal long term profile

Crucial for enhancing access at reduced cost

Changes in Land Use – TOD

• 1. Land-use Variables

Scenarios Business as Usual Peak reverse flow demand 25% Seat turnover factor (all stop) 1.3 Seat turnover factor (express) 1.1 Peak hour pax demand as %

• f whole day

16.0%

Changes in Land Use – TOD

• 1. Land-use Variables

Scenarios (proxies) Business as Usual TOD Comprehensive Long term achieved by 2032 Peak reverse flow demand 25% 70% 36% Seat turnover factor (all stop) 1.3 2.5 1.6 Seat turnover factor (express) 1.1 2.1 1.4 Peak hour pax demand as %

• f whole day

16.0% 12.0% 15.0%

Rail is the City’s Public Transport Backbone

Excellent for high volume trunks in peak

• ver long distances
• 1. Enhancing

demand patterns (TOD and TDM)

• 2. Passenger

Rail

• Need the very important Blue

Downs link to be implemented in short-medium term

Trunk: Rail

Trunk: Rail

• Direct link between Metro South East and Bellville
• Creates scope for establishing a circular route offering

new options for efficient operational designs

• reducing trainset requirements for deployment

elsewhere

• Major operational

improvement required throughout system to reverse decline

• Assumes PRASA/national take full financial responsibility

for passenger rail improvements

• Highlights need for City involvement to help ensure

integration and quality

• Extend

integrated fare system to rail

Trunk: Rail

• Long term network

vision: BRT trunks to fill in network not covered by rail

• Comparative

advantage in serving fairly dense corridors with high seat renewal

• 1. Enhancing

demand patterns (TOD and TDM)

• 2. Passenger

Rail

• 3. BRT along

key corridors

IPTN Implementation Plan (March 2017)

• Determines prioritisation of BRT trunk

corridor investment and high level rollout programme

Higher density Commercial, Business Residential use Low density, mainly residential use

BRT dedicated lanes

• BRT projects must be viewed as property

development projects as well

• 1. Enhancing

demand patterns (TOD and TDM)

• 2. Passenger

Rail

• 3. BRT along

key corridors

18m 12m 9m

PHASE 1 AND N2 EXPRESS

Atlantis Table View / Du Noon Century City Inner City & Sea Point Airport Mitchells Plain Khaye- litsha Camps Bay Hout Bay Joe Slovo

Existing services

MyCiTi quarterly Passenger Journeys 2011 to 2018

* A passenger journey is the full journey from origin to destination and often includes trunk and feeder segments

Existing services

Fare revenue covering an increasing proportion of direct operating costs (trunks and feeders)

Cost recovery

• n T01 trunk

route currently close to 80%.

Existing services - Moderation gains

25% 29% 34% 39% 39% 40% 41% 46% 46% 47% 43% 46% 43% 46% 42% 45% 44% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

MyCiTi: Fare Revenue vs Direct Operating Costs (%)

First moderation Implemented Optare maintenance commences

Competition and efficient business models

• CoCT is committed to creating the conditions for fair

competition amongst service providers

• Do not support the traditional view of public transport that there

should be no competition in same area

• CoCT supports competition for the market and in the market
• Three operators in MyCiTi Phase 1
• In terms of agreed national approach contracts were based on

negotiation with existing operators – mainly MBT operators

• Will be tendered in future
• Scope for competing for additional services on ongoing basis
• Similar approach for future phases of BRT

Non-fare revenue funding

TODC achievable by 2032 Full TODC Business as usual

• R6,000

R5,000 R4,000 R3,000 R2,000 R1,000 R0

• R1,000
• R2,000
• R3,000

R-4,000

• R5,000

Scheduled feeders Bus operating variables Competitive VOC rates Land use and travel demand patterns

400 subsidised scheduled feeder buses Full feeders No scheduled feeders

Positive swing Negative swing

IPTN BUSINESS PLAN: SENSITIVITIES TO OPERATING COSTS

Contribution to operating deficit after deducting fare income and other funding from costs

Key changes needed to ensure sustainability

• Scheduled feeders: Reduce extent of MyCiTi feeder, increase

direct services – facilitate new generation services

(fewer scheduled feeders, increased use of direct services, extensive use of New Generation minibus-taxi services supported, investment in e-hailing technology)

• Bus operating variables

(increase speed, larger vehicles, ensure buses are full in the peak, less positioning kms and fewer spare buses)

• Competitive Vehicle Operating Company (VOC) rates

(reduce VOC rates through competitive tendering)

• Reduce indirect costs

(reduce cost of station management, fare management, enforcement, oversight)

• Sensitivity to land use scenarios (TOD) and transport demand

management

(improved reverse flow, seat renewal, reduction in travel distance and in demand, widen times of travel)

• Non-fare revenue funding increased

(Additional rates income, widen parking management, new parking levy, securing other subsidies)

RISKS

Sensitivity of outcome to key variables

• 1. Enhancing

demand patterns (TOD and TDM)

• 2. Passenger

Rail

• 3. BRT along

key corridors

Current characteristics

• Established management
• Many seats per vehicle
• Not good for seat renewal and level

boarding

• But good for long distance point to

point trips

• Net contract helps manage risk

although leads to monopoly supply and other complexities

Golden Arrow Bus Services

• 4. Integrate

GABS into network

• 4. Quality

Bus

• Quality Bus mode
• Core feeders and direct services
• Peak only and all day services

(depending on viability as TOD materialises)

• Integration with MyCiTi BRT trunks
• Easy transfers
• Ticketing integration
• Timetable integration
• Branding integration (irrespective of

which VOC operates buses)

• Same infrastructure (1 system)
• Real time information and monitoring
• Some use of BRT dedicated lanes and

priority infrastructure at key congestion points

• Requires assignment of Contracting

Function

Seeking to create competition in provision

• f conventional bus services (GABS)
• Currently GABS operates in terms of one single

contract for the whole metropolitan area

• Best mechanism for introducing competition is not

yet agreed

• GABS ownership of depots makes introduction of

competition difficult

• New entrants will not be able to compete
• City considering buying depots

Introducing competition into conventional bus services

• Possible stagger tendering

But challenges experienced in assignment

• f contract to CoCT
• Applied for assignment of contracting function in

2012 in terms of NLTA

• Not yet granted
• NLTA Amendments remove the provision for

assignment of the GABS contract

Minibus taxis will form a key part of the envisaged system

• Well positioned to benefit from

“New Generation” technologies

• Slides to follow under

technology approach

• Transformation of industry
• Infrastructure must be designed

for their integration into the network

• 1. Enhancing

demand patterns (TOD and TDM)

• 2. Passenger

Rail

• 3. BRT along

key corridors

• 4. Quality Bus
• 5. Hybrid

Minibus-Taxi solutions

National Household Travel Survey for the Western Cape (StatsSA)

Weekend Argus - 11 April 2015

51%

Behaviour of taxi drivers towards passengers

50%

Taxis are too crowded

41%

Overall are dissatisfied with the taxi services

Passengers unhappy

Towards a Future State

Facili ilitate th the formation of

• f

Ass ssociation-based Tran ansport Operatin ing Com

• mpanie

ies (T (TOCs) across the City as a precursor to the formation of PTI-based RTCs and contract-based VOCs

1

Association

A

TOC RTC VOC INDUSTRY TRANSFORMATION

Towards a Future State

Facili ilitate th the tr transfer of

• f all

all Operatin ing Lice Licenses fr from in indiv ivid idual

• p
• perators to
• Ass

ssocia iation-based Tran ansport Operatin ing Companie ies (T (TOCs)

2

INDUSTRY TRANSFORMATION

Towards a Future State

In Invest in in build ildin ing th the cap apacity

• f these TOCs in the same

way the City has invested in a 3 year capacity building programme for the 2 taxi- based N2 Express companies

3

INDUSTRY TRANSFORMATION

Towards a Future State

Once the TOCs are formed and functional and able to form Regional Taxi Companies (RTC) contract the PTI TI man anagement fun functio ion (security, cleaning and minor maintenance) to these RTCs

4

Oth ther r con

• ntr

tractin ing opp

• pportu

tunit itie ies eg. advertising rights at PTIs Lan and for

• r de

depots/f /fuell llin ing facil ilit itie ies

INDUSTRY TRANSFORMATION

Taxi recapitalisation

• Over planned lifespan of 7

years of the TRP:

• ~ R3.2 billion

expenditure

• objective: R7.7 billion
• ~ 51,000 vehicles

scrapped

• objective: 100,000+

vehicles

• Allocation to TRP

included in MTEF projections

• But mechanisms to

achieve increased utilisation are not clear

200 400 600 800 1000 1200 TRP EXPENDITURE (R MILLIONS)

Projected Expenditure Actual Expenditure TRP Objectives R7.7 billion over 7 years

?

Source: compilation of data from NT expenditure review

Possible improved vehicle renewal scheme

• Create a new Vehicle Renewal Programme (TRP V2)
• Incentivise larger vehicles? Link to tracking and real time info?
• Structure the transaction to partially “secure” vehicle

financing

• Provide sufficient upfront capital to reduce the debt required and

improve the debt to asset ratio

• Establish a First Loss Facility in addition to a capital support

programme?

• Renewal should be through a revolving fund
• Current TRP was largely designed as a once-off
• But revolving fund has significant advantages in maintaining a high

quality fleet into the future (e.g. 400 000km or 5 – 7 years age)

• 1. Enhancing

demand patterns (TOD and TDM)

• 2. Passenger

Rail

• 3. BRT along

key corridors

• 4. Quality Bus
• 5. Hybrid

Minibus Taxi solutions

• 6. NMT

• The foundation for ‘New

Generation’ services

• See slides that follow
• New approach to AFC
• 1. Enhancing

demand patterns (TOD and TDM)

• 2. Passenger

Rail

• 3. BRT along

key corridors

• 4. Quality Bus
• 5. Hybrid

Minibus Taxi solutions

• 6. NMT
• 7. IT/tech

strategies/AFC

Technology change

“If I had asked people what they wanted, they would have said faster horses” – Henry Ford

Uber

• Rapid growth
• Shifted people from private cars to public transport
• Solved safety issues
• Improving metered taxis

?

51

Example of a minibus-taxi type service with e- hailing and flexible routes

52

A POOL SERVICE – where the needs of passengers are pooled and served together

Supply Demand

Supply Demand

e-

Pooled service: How does it work?

Tell us where you are. Tell us where you want to go Choose when you want to leave Book days or minutes in advance Know the fare before you book Walk to your pick-up spot Track your Pool service in real time

E-hailed Pool Services

Example 1: Direct service

E-hailed Pool Services

Example 2: Feeder to trunk

Supply

Demand

Passenger choice Car competitive Safe Easy to regulate Cost effective Inter-modal Convenient Passenger voice

e-

Select which

• ption you want

and get price, waiting time, ETA for each option

Pool plus Trunk Pool direct Personal plus Trunk

Personal direct (metered taxi)

Trunk

• nly

(BRT / Rail) Price Time Universal Access By Driver rating Other options possible Via settings or in real time

Requires a centralized e-hailing platform to connect users to range

• f transport services and

payment mechanisms

WHAT DOES THIS MEAN FOR THE IPTN?

• Prioritization for public transport remains key…..
• Whatever new technologies are available, if public transport is

stuck in congestion its advantages will be limited

• Trunk

services required for high volume movement along corridors

• But, creates scope for
• Better tailored and more cost-effective feeders to the trunks
• More use of direct services using MBTs or larger (eg 15-25

seaters), and car competitive small vehicle options

• Implications to be considered:
• Design to facilitate open transfers at key trunk stations, much

improved PTIs needed for transfer between MBT and Trunks

• Incentivising transfers for passengers/operators

– ie transfer subsidy to passengers

• 1. Enhancing

demand patterns (TOD and TDM)

• 2. Rail
• 8. Physical

priority for public transport

• 6. NMT
• 3. BRT along

key corridors

• 5. ‘Hybrid’

minibus taxi solutions

• 7. IT/tech

strategies/ AFC

• 4. Quality

Bus

Capital funding availability to implement BRT corridors with PTNG within reasonable timeframe across city is challenging

• System wide improvements to general

public transport, aligned to ongoing road maintenance and investment

• PT priority lanes must include

enforcement measures

• Huge investment
• Fast, no intersections
• Congested by single
• ccupancy vehicles
• Limited priority use by

public transport

• N2 BMT lane the
• nly public

transport facility

• n freeways

And highways - the other mobility backbone…

Efficiency of BMT lane

Lane Type Buses Taxi Cars Other Total BMT Lane 198 774 441 19 1 432 Occupancy 70 15 1.5 Passengers 13 860 11 610 662 26 132

% Pax Modal Split 53% 44% 3% 0% 100%

Surveyed on 12th April 2016

• A normal traffic lane gives a total of only 2 700 people per

hour – carried by 1800 cars.

• This is only 11% of the number of people transported in the

BMT lane in one hour, illustrating the overwhelming advantage of a BMT lane in transporting people.

• 1. Enhancing

demand patterns (TOD and TDM)

• 2. Rail
• 8. Physical

priority for public transport

• 6. NMT
• 3. BRT along

key corridors

• 7. IT/tech

strategies/ AFC

• 4. Quality

Bus

• 5. ‘Hybrid’

minibus taxi solutions

• 9. Revenue
• ptimization
• Further optimizing fares
• On-street parking fees
• Increased rates allocation

to 6% as integrated public transport network expands

• New local revenue

sources to be developed:

• Parking levy
• Other sources

Projected growth in passenger trips for MyCiTi Ph1, Ph2A, Quality Bus and New Generation services

Passenger Trips (avg/month)

• 500

1 000 1 500 2 000 2 500 2012/2013 2013/14 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019 2019/2020 2020/2021 2021/2022 ZAR in Millions

DORA Allocation to Cape Town for PT Investment

DORA allocation to CT for public transport investment 2012/13 DORB allocation in current Rands (Adj. For inflation) MYFIN 2018 assumed PTNG allocations (excl. discretionary) Apply for discretionary 25% - 76m(2019/20);R80m(2020/21);R85m(2021/22) Linear (DORA allocation to CT for public transport investment )

• Current Rands i.e. escalated per year
• Excludes adjustment funding

How secure is PTNG? how secure is PTOG? and BFI?

Financial big picture (real)

Excludes GABS fares

• 1. Enhancing

demand patterns (TOD and TDM)

• 2. Rail
• 8. Physical

priority for public transport

• 6. NMT
• 3. BRT along

key corridors

• 7. IT/tech

strategies/ AFC

• 4. Quality

Bus

• 5. ‘Hybrid’

minibus taxi solutions

• 9. Revenue
• ptimization
• 10. Regulation,

Enforcement and Network Management

Requires the right combination of business models, management and technology

Planning Authority Operating Licence and Route Consideration

The City, as Planning Authority, to determine the

need for any particular public transport service in terms of the CITP and direct as such; or

If CITP is not yet finalised or inadequate, then such

direction must be based on due inquiries and investigations carried out

The City, as Planning Authority, thus have the duty to direct in terms of regulated

competition in the public transport industry

• Granting of an operating licence
• Renewal of an operating licence
• Amendment of an operating licence
• Transfer of an operating licence

Operating Licence Applications

When is Planning Authority direction required?

Operating Licence

Can only have one Owner(s) Can have many Authority Can only have one Service Line / Service type Authority Can only have one Authority Can only have one Service Line / Service type Service Line / Service type Vehicle Segment C Segment B Segment A Driver Validity Period Validity Period Validity Period Driver Driver

Operating Licence Administration

Operating Licence Relationships

Transport Service Determines Need TDA Input Required Minibus Taxi

• 9 – 35 Seater Vehicle
• 4 – 7 Seater Vehicle (Amaphela)

CPTR Information (TRS) CPTR Information (TRS) Direction Direction

Metered Taxi

• Rank
• Base
• E-Hailing

Business Plan Business Plan Business Plan Direction Direction Direction

Scholar

• Private
• WCED

Contract with school or parents WCED Contract Direction None

Staff Contract with Employer

Direction

Contracted

• MyCiTi
• Dial-A-Ride
• GABS

Negotiated Contract (S41) Tender Contract Interim Contract (46) None None None

Long Distance CPTR Information (TRS)

Concurrence

Tuk-Tuk Commercial Services Contract

None

Cross Border Determined by CBRTA

Concurrence

Charter Determined by PRE

None

Tourist Determined by the NPTR

None

Special Event

Routes belongs to the Planning

Authority, who in turn grant public

transport operators the authority to

• perate on any particular route for a

specific period.

Is this is a new taxi route or an amendment of one? Is support for registration of a new route association is required? A, B and via point consideration Agreement required if more than one taxi association operate along the same route or a large section thereof Is it affecting any existing minibus taxi routes? Is the re any possibility of conflict between taxi associations? Is there ranking space available at A, B or via Point? Any stops required along the proposed new route?

Public Transport Routes

Planning Authority Consideration

• 1. Enhancing

demand patterns (TOD and TDM)

• 2. Rail

ONE integrated, multimodal network

• 8. Physical

priority for public transport

• 9. Revenue
• ptimization
• 6. NMT
• 3. BRT along

key corridors

• 5. ‘Hybrid’

minibus taxi solutions

• 7. IT/tech

strategies/ AFC

• 10. Regulation,

Enforcement, Network Management

• 4. Quality

Bus

Concepts underlying IPTN Business Plan

(provided in first submission)

• 1. Mobility and access and the importance of urban

form

• 2. Creating integrated multi-modal networks
• 3. Anticipating technological change
• 4. Economic growth and fiscal constraints
• 5. Incrementalism versus stepped change
• 6. Competition and efficient business models
• 7. Responding to unpredictability
• 8. Transformation agenda

THANK YOU

Dawie Bosch Business Planning 021 400 9135 dawie.bosch@capetown.gov.za