Buses

The third brief dealt with trains.  The next brief will consider minibus taxis and the final brief will discuss the planned future of the transport system in the five largest metros.

Introduction

According to the 2013 National Household Transport Survey, 6.6% of trips to school or work are undertaken via bus. It is an industry that, in both the public and private sector, receives a substantial amount of state subsidy. This brief will explore the evolution of municipal bus systems in South Africa and their role in the national transport framework.

The bus system

The bus system in South African municipalities has three components:

1. Subsidised bus services, where bus services run by private companies are subsidised by the state through provincial governments.
2. Municipal bus services, run by the municipality or sub-contracted to private companies.
3. Bus Rapid Transit (BRT) Systems, which are increasingly being developed by municipalities and have dedicated lanes and roadways and stations geared towards allowing large numbers of people to get on or off buses quickly.

Provincially subsidised bus services

The origins of subsidised and municipal buses are firmly rooted in South Africa’s apartheid history. Given that black communities were located very far from economic opportunities, bus systems were subsidised in order to alleviate the financial burden on people travelling long distances and to make it economically viable to recruit labour from distant townships. Consequently, the bus industry was often a target of protests. The industry was run by private contractors but was given state subsidies according to the number of tickets sold over specific distances. The operator contracts were for indefinite periods, making entry of new players in the industry difficult. There was alleged to be widespread abuse of the system with operators inflating the number of tickets sold.

In 1986, the White Paper on Transportation recommended the legalisation of minibus taxis, a policy which was adopted by government. This began to severely depress passenger numbers and profitability in the bus industry. Following this, the 1996 White Paper on Transport amended the policy to allow for competitive tendering for subsidised bus contracts. However, the system was often more costly than the previous one, which led to concerns from government. Labour, too, did not support the new system raising concerns that the tendering system caused job insecurity and had a negative effect on wages. Additionally, there were court challenges from within the bus industry alleging that the Department of Transport had failed to follow the correct tender procedures. The result was that since 2003, no new negotiated contracts have been concluded, meaning that most of the current contracts are interim contracts, particularly in Metropolitan areas. These were initially meant to be a temporary solution for three years, but have been operating on continuous one to three month extensions since.

In response to the high number of subsidy claims, National Treasury in 2009 converted the subsidy contracts to kilometre based contracts that were frozen at the agreed number of kilometres. The combination of these two factors has led to stasis with no subsidies for new routes. This has disincentivised the industry to invest in new routes or fleets. At present, the average rate for subsidies per revenue kilometre in metropolitan areas is R18,98, with R18,21 paid in emerging metros and R17,88 in rural areas. These buses face the challenge that they are heavily utilised only during peak commuting hours in the morning and the evening, with very low capacity outside of these hours.

Municipal bus services

Some metropolitan areas also have municipal bus services. These are provided directly by the municipality and are focused on shorter routes within the core city. Mostly, they serviced white group areas under apartheid. Johannesburg, Tshwane and Ekurhuleni and Nelson Mandela Bay all operate these systems. Ethekwini subcontracted the service to multiple private companies, but is now trying to bring them back in house. Cape Town does not operate a municipal bus service. These bus services are also subsidised, with many of their passengers being students and pensioners.

BRT systems

BRT systems form part of the future of South African transport, as recommended by the Public Transport Strategy and Action Plan. Thirteen municipalities have been selected for the introduction of BRT. They are listed in the table below.

The core BRT concept is a system with dedicated stations and lanes, along which travel specially designed articulated and rigid buses. Cape Town has been most successful, having completed Phase 1 development, consisting of two trunk lines: Dunoon-Table View-Civic Centre-Waterfront, and Atlantis-Table View-Omuramba. Johannesburg has completed Phase 1A (from Soweto to central Johannesburg along a northerly route) and Phase 1B (from Soweto to central Johannesburg along a southerly route). It is constructing Phase 1C (from central Johannesburg to Alexandra and Sandton). Tshwane has introduced a very limited service. George is the only other municipality where a BRT system is operational.

It has increasingly been recognised that the core BRT system is not suitable in all circumstances, and in some municipalities, the concept of a quality bus service with limited or no dedicated lanes has replaced it.

The BRT rollout has been slower than planned. Nine municipalities were expected to have Phase I completion and operation by 2016. The Department of Transport is trying to get ten municipalities operational by the end of 2018, with a view to increasing the number of passenger trips per day from 140 000 in 2017 to 300 000 in 2019. Negotiations with taxi companies in order to transform ownership of taxis into ownership of shares in bus operating companies are characteristically lengthy and expensive, and in the end have taken relatively few taxis off the road.

A total of R 33.9 billion, in the form of capital subsidies transferred from national government to municipalities, has been spent developing BRT in the thirteen municipalities. The budgeted transfer in 2017/18 is R 6.16 billion, rising to R 6.96 billion in 2019/2020. Some municipalities have supplemented these funds by allocations from their own revenues.

BRT systems are limited by two financial factors. The first is the rate at which national government can subsidise capital development costs, and the second is the extent to which municipalities can subsidise operating costs. Experience in Cape Town and Johannesburg indicates that fare receipts cover between 40% and 50% of operating costs. The balance has to be financed from property rates revenue. The prospect of multiple companies operating on the line, as the system is built to facilitate, has the potential to bring down costs.

Integrated Public Transport Network Plans

A successful municipal transport system integrates buses and the rest of the public transport infrastructure. Most bus systems in South Africa exist within a “policy silo” whereby they are not integrated into a broader public transport framework. This has both lessened their positive impact on public transport in general and decreased the number of people able to utilise their services. All the BRT municipalities are expected to produce an Integrated Public Transport Network plan. To date only two of them (Cape Town and Ethekwini) have done so.

Contributing to the lack of effective policy implementation is fragmentation of authority. Transport is managed by at least five institutions in Gauteng alone and this does not include the minibus taxi industry, which is independent. Funding and management are carried out by different levels of government in some cases. In most cases, Provincial governments fund subsidies out of grants from the national government, supplemented by allocations from the equitable share in some provinces, while municipalities are responsible for their own bus services and BRT projects.

At present, the Department of Transport is implementing their Accelerated Turnaround Plan. The Plan aims to clarify the roles of national, provincial and local government and move towards a more integrated system. Integration committees have been set up, and they will attempt to integrate the bus service with other modes of transport, particularly taxis. There will also be a drive to renegotiate the current interim contracts with a view to concluding 12 year contracts for provincially subsidised services that streamline funding and aid integration.

The Johannesburg BRT utilization problem

An article in Business Day on 15 January 2018 reported persistently low passenger numbers, with less than 0.5% of Johannesburg’s population using Rea Vaya, the city’s BRT. The Minister of Transport commented that the system would probably be scaled down and the Gauteng MEC commented that the city, organised around sprawling suburbs, remained in thrall to private motor vehicles. BRT systems are not universally successful – Delhi has dismantled is half built system – and years may pass before they take root.

Conclusion

The South African municipal bus system is under-utilised. In order to move the system forward the issues of system integration and governance will have to be resolved.

The appended table sets out information on BRT systems, including:

• The total expenditure from public transport network capital grants to municipalities between 2005 and 2017
• The rates revenue for 2017/18 in each municipality. Cape Town has set a limit of 4% of rates revenue on subsidisation of BRT operating costs, which can be used as a benchmark in other municipalities.
• The BRT system envisaged for each municipality.
• The status of the BRT system in each municipality.
• Whether the Department of Transport is considering mothballing the BRT system in each municipality.
• A brief general assessment made by the Department of Transport in a presentation to the National Assembly’s Transport Committee on 14 September 2017.

Rafael Friedman
Researcher
rafael@hsf.org.za

* PTNG stands for Public Transport Network Grant

Sources

• Africa, Statistics South. National Household Transport Survey:2013. Pretoria: Statistics South Africa, 2013.
• GTAC. Public Transport Infrastructure & Systems Expenditure & Performance Review. Pretoria: National Treasury, 2014.
• Investments, Hoskens Consolidated. An Industry View on BRT Systems. Cape Town: HCI, 2017.
• Province, Gauteng. Bus Subsidy Transformation. Johannesburg: Department of Transport, 2016.
• Report, ANA. “Tshwane City Signs New Transport Subsidy Agreement.” Independent Online, 8 September 2017.
• Rwida, Ulrike. Public Transport: Funding and Subsidisation. Pretoria: National Treasury, 2015.
• Walters, Jackie. “Public Transport Implementation in South Africa: Quo Vadis?” Journal of Transport and Supply Chain Management, 2014.