CITY OF JOHANNESBURG PRESENTATION TO THE COMPETITION COMMISSION HEARING ON PUBLIC PASSENGER TRANSPORT ENQUIRY 6 JUNE 2018

 
CITY OF JOHANNESBURG PRESENTATION TO THE COMPETITION COMMISSION HEARING ON PUBLIC PASSENGER TRANSPORT ENQUIRY 6 JUNE 2018
CITY OF JOHANNESBURG
PRESENTATION TO THE COMPETITION COMMISSION HEARING ON PUBLIC PASSENGER TRANSPORT ENQUIRY
6 JUNE 2018
CITY OF JOHANNESBURG PRESENTATION TO THE COMPETITION COMMISSION HEARING ON PUBLIC PASSENGER TRANSPORT ENQUIRY 6 JUNE 2018
AGENDA

 Overview of public transport in the City of
                                                The input today will
  Johannesburg (CoJ)                            complement:
 City policy and approach to scope of           Introductory meeting
  Commission:                                      held with CC officials
    Transport planning                          Submission made in
                                                   September 2017
    Price setting and price regulation
                                                 Response to questions
    Route allocation, licensing and entry         asked (May 2018
     regulations
                                                 Strategic Integrated
    Operating subsidies                           Transport Plan
                                                   Framework
    Transformation
                                                 Transport sector plan
CITY OF JOHANNESBURG PRESENTATION TO THE COMPETITION COMMISSION HEARING ON PUBLIC PASSENGER TRANSPORT ENQUIRY 6 JUNE 2018
OVERVIEW OF PUBLIC TRANSPORT
CITY OF JOHANNESBURG PRESENTATION TO THE COMPETITION COMMISSION HEARING ON PUBLIC PASSENGER TRANSPORT ENQUIRY 6 JUNE 2018
ROLE OF CITY OF JOHANNESBURG IN RESPECT OF
  TRANSPORT
Our role revolves around the following strategic thrusts:
1: Restructure and integrate the city through integrated
transport planning
2: Improve and expand provision of quality public transport and
use of non-motorised transport
3: Maintain, improve, extend and integrate transport
infrastructure
4: Support economic growth through improving freight mobility
5: Manage congestion, travel demand and parking
6: Improve transport safety through active, engaged citizenry
7: Transform the transport sector and encourage new, efficient
and profitable transport enterprises and green jobs
8: Plan and regulate the transport system
9: Resource and finance the transport plan
CITY OF JOHANNESBURG PRESENTATION TO THE COMPETITION COMMISSION HEARING ON PUBLIC PASSENGER TRANSPORT ENQUIRY 6 JUNE 2018
INTEGRATED TRANSPORT PLANNING
 In line with the NLTA, we have a number of transport
  planning instruments to guide infrastructural investment
  decisions, operational planning, transformation initiatives
  and budget required in the short, medium and long
  term.
 These include:                                                    The integrated public transport
   Integrated Public Transport Network Plan                        network has the following
                                                                    components:
   Transport Master Plans integrating public transport with non-    Network hierarchy
    motorised transport for regions, precincts or nodes              Passenger access typologies
                                                                     Design parameters
   Operational and business plans for services
                                                                     Tools for integration
                                                                     City wide strategic network
CITY OF JOHANNESBURG PRESENTATION TO THE COMPETITION COMMISSION HEARING ON PUBLIC PASSENGER TRANSPORT ENQUIRY 6 JUNE 2018
INTEGRATED PUBLIC TRANSPORT NETWORK (IPTN) HIERARCHY

 We have developed a public transport network hierarchy
  differentiated in terms of:
   Demand
   Right of way (and thus speed)
   Frequency of stops (depends on demand and surrounding
     land use)
   Modes (some only one mode e.g. rail, low density areas
     can have more than one mode on the network
   Degree of investment (for rapid bus, higher investment)
CITY OF JOHANNESBURG PRESENTATION TO THE COMPETITION COMMISSION HEARING ON PUBLIC PASSENGER TRANSPORT ENQUIRY 6 JUNE 2018
IPTN HIERARCHY
     MODE
                        TYPOLOGY   DEMAND               MODE                                               FUNCTION AND FEATURES
   CATEGORIES
                                                                           o To move people quickly from area of high residential to areas of employment/income
Rail Public Transport    SIPTN-                        Gautrain,
                                   9000-15000                                opportunities
      Network            Type A                        Metro Rail
                                                                           o Limited stops. (closed stations)
                                                                           o Corridors of Freedom, mixed use development , three story residential
  Rapid Road Public                                                        o To move people quickly from area of high residential to areas of employment/income
                         SIPTN-                 Bus Rapid Transport, Light
 Transport Network                 6000-9000                                 opportunities
                         Type B                            Rail
   (High Capacity)                                                         o Limited intersections and right turns so buses can be relatively speedy
                                                                           o Limited mostly closed high or low floor stations

Road Public Transport                                                       o Corridors of Freedom and areas where the City want s o densify along the corridor
                         SIPTN-
 Network (Medium                   3000-6000      Bus Rapid Transport       o Mixed use development, Three story residential, social housing along corridor.
                         Type C
      Capacity)                                                             o Fairly frequent closed and opens low floor stations and some stops

                                                                            o   Frequent stops with shelters
 Road Mixed Traffic
                                                                            o   Some public transport priority (e.g. queue jumping)
  Public Transport       IPTN-                    Bus (Double Decker,
                                   1000-3000                                o   On street stopping by public transport vehicles
Network (Medium to       Type D                        Standard)
                                                                            o   Low to medium density
   Low Capacity)

 Road Mixed Traffic
  Public Transport       IPTN-                                              o Frequent stops with lay bye es and shelters
                                    500-1500    Bus ( Standard, Mini bus)
   Network (Low          Type E                                             o Low to medium density
     Capacity)

 Road Mixed Traffic                                                         o Low to medium density
                          IPTN-                     Bus, Taxi, Demand
  Public Network
CITY OF JOHANNESBURG PRESENTATION TO THE COMPETITION COMMISSION HEARING ON PUBLIC PASSENGER TRANSPORT ENQUIRY 6 JUNE 2018
STRATEGIC INTEGRATED PUBLIC TRANSPORT NETWORK

 With the above assumptions, we have built a transport
  model that looks at current and future transport
  demand, population and economic growth and land use
 On the basis of this model we have identified the key
  public transport corridors that we need in the City -
  called Strategic Integrated Public Transport Network
 These corridors will be operated by rail, BRT,
  conventional bus and mini bus taxis while recognising a
  role for demand responsive services.
CITY OF JOHANNESBURG PRESENTATION TO THE COMPETITION COMMISSION HEARING ON PUBLIC PASSENGER TRANSPORT ENQUIRY 6 JUNE 2018
STRATEGIC INTEGRATED
 PUBLIC TRANSPORT NETWORK
 Going forward we have divided the City into ‘transport
   catchment areas’ and for each catchment area are developing and
   then implementing:
    Detailed Public Transport Operational Plan setting out the
      routes, modes, scheduled and unscheduled services, number
      of vehicles per mode, etc..
    Infrastructure plan including number of open, closed stations,
      interchange, ITS, etc.
    Operating Licensing Strategy to include how “seats are
      allocated” where new buses replace old buses/taxis and how
      OLS will be allocated to existing/new services
    Business plans (fundable, bankable, etc.) for implementation
CITY OF JOHANNESBURG PRESENTATION TO THE COMPETITION COMMISSION HEARING ON PUBLIC PASSENGER TRANSPORT ENQUIRY 6 JUNE 2018
REA VAYA

     Progress                                                  Plans
     We have introduced two phases of Rea Vaya BRT:
                                                                In line with the shifts above, we are rolling out the third
         Phase 1A in 2009 (143 buses, 25 kms of                  phase of BRT as part of an integrated public transport plan
          trunk route)                                            which will include:
         Phase 1B in 2013 (134 buses, additional 16                  A trunk route (Type B) along Louis Botha and Katherine
          km of trunk routes)
                                                                       between Alex, CBD and Sandton CBD
     Passenger numbers are approximately 56 000 per
      weekday.                                                        Bus routes (Type C and D) from Ivory Park through Mall of
                                                                       Africa, Sunninghill, Sandton,
     Over 600 taxis have been removed from operations,
      two bus operating companies (Piotrans and                       Restructured mini bus taxi routes to connect lower order
      Ditsasmaiso) formed with majority shareholding by                nodes and provide feeder services
      previously disadvantaged mini bus taxi operators
     Over 400 ex-taxi drivers now bus drivers of the above           Avanzas to provide internal feeder services in Alex and Ivory
      companies                                                        Park
     277 buses procured – with 50% of them meeting local       Will be phased in from July 2019 in partnership with
      content requirments
                                                                  affected mini bus taxi and bus operators
     Fares are a tariff set by Council after a consultation
      process.
METROBUS

 Role of Metrobus                                             Progress
 The CoJ envisages that Metrobus:                             Metrobus transports less than 50 000 passengers per
                                                                 day with numbers declining due to lack of sufficient
      Will be the primary operator operating on medium          buses due to an aging fleet and inadequate fare
       demand public transport routes as part of an              collection system
       integrated network and contracted on a fee/km by the    Metrobus routes have mostly not changed over 20
       Scheduled Services Management Agency (SSMA)               years – servicing mostly former ‘white areas’ with a
                                                                 limited service from Soweto and no services in other
      Have a new bus and fare management system and its         ‘townships’ – due to litigation (from PUTCO) and
       fares aligned and integrated with Rea Vaya.               ‘threats’ (from the taxi industry)
                                                               Without sufficient buses and a modern fare collection
                                                                 system, it is difficult to change the contracting model in
                                                                 line with what the NLTA envisages.
PROVINCIAL SUBSIDISED BUS SERVICES

    PUTCO, JR Choeu and others                                             Gautrain buses
   The Gauteng Department of Transport operates contracts to             Gautrain operates feeder buses (and some mini bus taxis) from
    the value of R500 million per annum, mostly from Soweto to             its various stations
    the North of the City (Sandton, Sunninghill, KayaSands, etc.)
                                                                          These buses are part of the Gautrain system and passengers
   These contracts are poorly managed with an impact on                   who use them and the Gautrain at a reduced fare. As a result
    passengers, the operator and leading to an adverse opinion by          relatively few commuters use them without using the train
    the AG
                                                                          As part of our role as defined in the NLTA we have provided
   The Province would like the CoJ to take over these contracts           ‘direction letters’ to the PRE allowing them to operate until we
    as is envisaged by the NLTA but our view is that we can only           have an integrated network in that area
    take them over if they can form part of an integrated plan and
    that affected mini bus taxi operators are given an opportunity        Despite significant discussions and disagreement they continue
    to be part of such contracts                                           to operate a parallel service to Rea Vaya from Park Station to
                                                                           Parktown due to the fact that they claim Rea Vaya is not
   This requires significant operational and business planning – we       reliable enough and there is no air conditioning in Rea Vaya
    envisage this is only possible in 3 to 5 years time                    buses.
MINI BUS TAXIS
Approach
      The CoJ regards minibus taxis are an integral part of the           Issues
       transport system and commits the City to improve the              The City’s role in regulation of mini bus taxis as required by the
       quality and safety of the minibus-taxi routes as part of an
       Integrated Transport Network.
                                                                          NLTA is to provide direction letters in respect of supply and
                                                                          demand. However in the absence of detailed integrated transport
      Our areas of work with mini bus taxis include:                     plans and due to the ‘time gap’ between transport planning and land
           Integration with Rea Vaya BRT system - as part of             use development, the City does not believe it can provide credible
            the next phase of Rea Vaya we have agreed to assist in        direction on supply or demand.
            the regularisation of over 5000 taxis in the “North
            East Quadrant)                                               There is a significant amount of overtrading and ‘self regulation’ in
           Building, maintaining and managing 29 formal public           the taxi industry due to relatively low barriers to entry and
            transport facilities across the City and attempting to        inappropriate regulation
            give them a stake in the ‘value chain’ associated with
            these facilities
                                                                         Even if the City were to provide direction on supply and demand, it
                                                                          is highly unlikely that it could be enforced – even license holders do
           Capacity building of association and regional structure       not stick to routes on their licenses and most are allocated
            leadership through sponsoring a NQF accredited
            course at Wits School of Governance
                                                                          numerous routes
           Providing (or not providing) ‘direction letters’ to the      The taxi industry is significantly ‘infiltrated’ by criminal elements
            PRE in respect of operating licenses                          which is a major cause of violence
RAIL

   PRASA                                                           Gautrain
 The CoJ has been committed to:                                 We have an operational relationship with the
      Support the PRASA rail upgrading and corridor               Gautrain including in respect of the management of
       modernisation strategy                                      congestion and different operators at Gautrain
      Ensuring an integrated network between Gautrain and         stations (corporate shuttles, Uber, metered taxis, tuk
       PRASA and road based nodes                                  tuks
      Working with PRASA for certain rail stations to           We have a limited planning relationship with
       become intermodal and Transit Orientated
       Development (TOD) nodes
                                                                   Gautrain and their expansion plans in some
                                                                   instances are not aligned to our land use and
      Ensuring that road based modes, pedestrian and cycle        transport planning
       paths service rail including for so called ‘last mile’
 There has been limited progress due to capacity
   weaknesses within PRASA and the City
DEMAND RESPONSIVE VEHICLES:
METERED TAXIS, UBER, FOUR PLUS ONE

                                                                           Issues
 Our IPTN Hierarchy makes provision for demand                           The NLTA requires that we determine the supply and demand of
                                                                           such vehicles and provide direction to the PRE
   responsive vehicles which we regard as including:
                                                                          As with mini bus taxis, this is inappropriate and can be seen as
      Metered taxis: we see Uber and other forms of ehailing as           limiting competition – since some of these app based forms of
                                                                           mobility have created new markets for themselves.
       part of metered taxis
                                                                          The CoJ believes its role is rather to ensure safe mobility for
      Four plus one’s: these are often called “Avanzas”,Ventures          passengers
       and are generally run by mini bus taxi associations for local      We would like to see the PRE imposing conditions such as markings
       trips in residential areas with a flat fee                          on vehicles, maps and fare information in vehicles and safety
                                                                           standards
      Tuk tuks: we have provided ‘direction letters’ in certain
                                                                          In the absence of the PRE making this an operating license
       ‘niche’ areas such as tourist spots and CBDs (Rosebank,             condition, the COJ will include such requirements in bylaws that it
       Vilikazi Street, Melville)                                          is revising
LONG DISTANCE AND CROSS BORDER BUSES AND MINI BUS TAXIS

   Vision and strategic thrusts                                          Progress
 The City’s vision is for long distance and cross border               In 2018/19 financial year we will open a new R411 million
                                                                         facility for cross border buses and all cross border and long
  commuters to be able to travel in safety and dignity and               distance taxis which will be a catalyst to transform the
  that operators are supported to be able to offer                       provision of such transport for residents and visitors
  affordable, quality services while making a decent living.
                                                                        There will be strict access control which will ensure that
 To achieve this vision, the following are the strategic                passengers in the facility only board vehicles which are licensed
  thrusts:                                                               and have passed vehicle fitness tests.
      Support the regulation of operators to ensure that               There will also be an enforcement plan to prevent loading and
       sufficient safe transport exists at affordable prices and         holding of vehicles (which are likely be illegal/unsafe) on street
       that conflict between operators is reduced;                       or on illegal land uses.
      Provision of quality, safe, accessible ranks for commuters;      The City will charge a bay rental fee.
       and
      Ensuring that the mini bus taxis and buses provide secure,
       off-street holding, storage and loading facilities for
       themselves.
SUMMARY OF CITY’S ROLE IN RESPECT OF OWNERSHIP,
 CONTRACTING AND REGULATION
Mode                       Ownership                 Contracting                  Regulating to a limited
                                                                                  extent
Bus                        Metrobus (This is a       Piotrans                     Long distance buses
                           municipal owned entity)   Litsamaiso                   Gautrain buses
                                                     (These are two private
                                                     companies are contracted
                                                     to the City to provide Rea   (Provincial subsidised
                                                     Vaya BRT services)           services)
Mini bus taxi              N/A                       N/A                          Commuter, long distance
                                                                                  and cross border mini bus
                                                                                  taxis.

Metered taxis, app based   N/A                       NA/                          Metered taxis, Uber, Taxify,
taxis                                                                             tuk tuks, Avanzas
RESPONDING TO THE COMMISSION
TRANSPORT PLANNING AND COMPETITION

 As indicated by the CC in the GG of 10 May 2017: the NLTA is anticipates that integrated transport
  planning involves “co-ordinating and organising the different modes of land based transport in a
  manner that will result in the different modes of land based public passenger transport complementing
  each other as opposed to be alternatives of each other from a consumer perspective”
 The City supports this view and for this reason is involved in the transport planning as set out above
  to ensure fair competition and no duplication of government subsidies
 However there are a number of complexities and unintended consequences as a result of:
   Not all public transport is publically owned or contracted by a public body – in particular the mini
     bus taxi industry is in private hands and there is very limited contracting of it. The capacity of the
     state to thus organise this mode in line with a public transport plan is thus limited
   There are three spheres of government responsible for different modes impacting on the same
     geographical space, Transport demand is not restricted to municipal boundaries. Johannesburg in
     particular receives a large number of trips from surrounding municipalities.
PRICE SETTING AND PRICE REGULATION
 IN THE CITY

 The CoJ is not involved in price regulation of public transport
 The CoJ sets prices for Metrobus and Rea Vaya annually as part of the tariff process.
 The considerations of the CoJ in setting the fares each year are:
      Passenger numbers: current and forecasted
      CPI and other economic indicators
      Public transport policy that an individual should not spend more than 20% of their disposable income on transport which
       therefore suggests that a regressive fare increment will assist the least able to pay to address inequality
      Benchmarking the fares against other public transport modes (see next slide)
 In respect of Rea Vaya BRT, operators are paid a fee per km and there is an escalation clause to make provision
   for increase in fuel, labour, maintenance etc.
REA VAYA FARES VS OTHER MODES OF TRANSPORT

 Shows that Rea Vaya is
 cheaper than all other
    modes except
       Metrorail
ROUTE ALLOCATION, LICENSING AND ENTRY REQUIREMENTS

 The role of the CoJ in respect of route allocation and providing direction to the PRE in respect of licensing varies
   according to different modes as follows:
      Metrobus: currently operates on a ‘historical basis’ but the intention is for these routes to be optimised and restructured in line with
       the IPTN plan
      Rea Vaya: Allocated in terms of a detailed operational and business plan in line with current and anticipated passenger demand
      Provincial subsidised contracts: CoJ plays no role, routes operate on a ‘historical basis’ with modifications based on demand and
       availability of funding
      Gautrain buses: CoJ provided direction letters on request – up until such time as a detailed operational plan is implemented in a
       particular area
      Commuter mini bus taxi: 2002/3 CITP set out mini bus taxi routes but never implemented. See above in respect of considerations in
       this regard.
      Long distance and cross border buses and mini bus taxis: CoJ provides direction letters to Cross Border Agency only in respect of
       availability of ranking space.
OPERATING SUBSIDIES

 The following situation exists in respect of the City of Johannesburg:
    Metrobus: CoJ provides an operating subsidy to Metrobus in the budgeting process. This covers
     70 to 75% of Metrobus operating expenses and the remainder is covered by fare collection
    Rea Vaya: Both the CoJ and the National Government through the PTNG subsidies Rea Vaya. The
     PTNG pays for specific infrastructure and direct operating costs as per grant submission. The
     operating subsidy is about 68% and the remainder is covered by fare revenue. The Bus Operating
     Companies are paid a fee per km amount and are charged penalties if they do not perform.
    Mini bus taxis: The CoJ provides no direct subsidy to private operators. However access to and
     use of public transport facilities such as taxi ranks and holding areas is free which constitutes an
     indirect subsidy. The CoJ may provide a subsidy to mini bus taxis in the future if they are contracted
     on a performance based contract to provide scheduled services where an operational and business
     plan justifies this.
TRANSFORMATION

 The CoJ has actively promoted transformation, job creation, entrepreneurship development and broad based black
   economic empowerment in the public transport sector.
 While the focus has been on the mini bus taxi sector, other target beneficiaries are learner transport and small bus
   operators
 Areas of transformation include:
    Broad based black economic empowerment: Facilitating the establishment of two black and predominantly mini
      bus taxi owned companies
    Job creation: Over 600 taxi drivers have become Rea Vaya bus drivers, 340 staff employed at Rea Vaya Stations
      infrastructure creation has led to significant job creation
    Value chain; Numerous contracts awarded by Rea Vaya and Metrobus to black owned companies in respect of
      fuel, maintenance etc. Work in progress in respect of management, maintenance and advertising of/on public
      transport facilities
    Capacity building: Pioneered an NQF accredited course for mini bus taxi operators at Wits School of
      Governance
CONCLUDING REMARKS

 While the intention of the NLTA is to prevent competition between public transport services, it incomplete and
   possible ‘unimplementable’ implementation, has meant that in some areas harmful and unfair competition does
   exist.
 Areas in the CoJ include:
      Mini bus taxi competition with Rea Vaya and Metrobus (including use of the dedicated bus lanes) leads to a loss of fare
       revenue which needs to be made up with a greater operational subsidy. Intimidation of bus passengers by mini bus taxi
       operators existed but has declined
      Duplication of services between Metrobus and Rea Vaya on the one hand and Gautrain on the other – due the Gautrain
       requirements for certain frequencies and standards linked to the train service
      Lack of regulation by the PRE and City means that the mini bus taxi sector regulate themselves or are ‘regulated by third
       parties’ – sometimes with inappropriate sanctions and rewards – and legitimate operators may loose out.
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