City of Cape Town. Competition Commission Market enquiry into Land-based Public Passenger Transport Industry. 21 June 2018

Transcription

1 City of Cape Town Transport and Urban Development Authority Competition Commission Market enquiry into Land-based Public Passenger Transport Industry 21 June 2018 [v ]

2 OUTLINE OF PRESENTATION Submissions to Competition Commission Need for change Integrated Public Transport Network: CoCT s integrated public transport methodology 10 point plan

3 CoCT Submissions to Competitions Commission to date CoCT = City of Cape Town Initial submission (16pp) Response to detailed questions Nov 2017 (28pp and 17 documents) Comment on Statement of Issues (5pp)

4 THE IPTN BUSINESS PLAN Need for change

5 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?

6 Need for public transport investment 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. BUT: Must ensure that it is Fiscally and financially sustainable Resilient and flexible to respond to change Enable spatial transformation and TOD

7 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

8 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. Income groups per mode 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 other destinations than ever before. User Access Priorities Across Cape Town (NHTS 2013)

9 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 on 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 out of congestion

10 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.

11 THE IPTN BUSINESS PLAN Integrated public transport methodology

12 IPTN Business Plan s Integrated public transport methodology Passenger Rail BRT and Quality Bus Nature of integrative role differs for different sectors (eg rail infrastructure built by PRASA) City-wide integration, infrastructure, strategic management MBT & new generation and other services Oversight Integrated network design Integrated fare system Station services Control through an integrated technology Regulation and enforcement Infrastructure provision Infrastructure Maintenance Depots Etc.

13 Prioritising scarce resources is key: We need an approach which aims for optimal outcomes... but can accommodate what actually happens Flexible and robust

14 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

15 The IPTN BP 10 point plan 1. Enhancing demand patterns (TOD and TDM) 2. Rail 10. Regulation, Enforcement, Network Management 9. Revenue optimization ONE integrated, multimodal network 8. Physical priority for public transport 7. IT/tech strategies/ AFC 6. NMT 3. BRT along key corridors 4. Quality Bus 5. Hybrid minibus taxi solutions

16 1. Enhancing demand patterns (TOD and TDM) Crucial for enhancing access at reduced cost

17 Transit Orientated Development (TOD) 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

18 1. Enhancing demand patterns (TOD and TDM) Crucial for enhancing access at reduced cost Ideal long term profile Transport Demand Management (TDM) measures such as peak spreading This has been the impact of the recent changes to the peak fares

19 Changes in Land Use TOD Scenarios 1. Land-use Variables 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 % of whole day 16.0%

20 Changes in Land Use TOD 1. Land-use Variables Business as Usual Scenarios (proxies) TOD Comprehensive Long term achieved by 2032 Peak reverse flow demand 25% 70% 36% Seat turnover factor (all stop) Seat turnover factor (express) Peak hour pax demand as % of whole day 16.0% 12.0% 15.0%

21 1. Enhancing demand patterns (TOD and TDM) Rail is the City s Public Transport Backbone 2. Passenger Rail Excellent for high volume trunks in peak over long distances

22 Trunk: Rail Need the very important Blue Downs link to be implemented in short-medium term

23 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

24 Trunk: Rail Major operational improvement required throughout system to reverse decline Extend integrated fare system to rail Assumes PRASA/national take full financial responsibility for passenger rail improvements Highlights need for City involvement to help ensure integration and quality

25 1. Enhancing demand patterns (TOD and TDM) Long term network vision: BRT trunks to fill in network not covered by rail 2. Passenger Rail Comparative advantage in serving fairly dense corridors with high seat renewal 3. BRT along key corridors IPTN Implementation Plan (March 2017) Determines prioritisation of BRT trunk corridor investment and high level rollout programme

26 1. Enhancing demand patterns (TOD and TDM) BRT projects must be viewed as property development projects as well 2. Passenger Rail 3. BRT along key corridors Higher density Commercial, Business Residential use Low density, mainly residential use BRT dedicated lanes

27 Existing services PHASE 1 AND N2 EXPRESS Atlantis 18m Table View / Du Noon Joe Slovo Century City Airport 12m Inner City & Sea Point Camps Bay Mitchells Plain Khayelitsha 9m Hout Bay

28 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

29 Existing services - Moderation gains Fare revenue covering an increasing proportion of direct operating costs (trunks and feeders) Cost recovery on T01 trunk route currently close to 80%. MyCiTi: Fare Revenue vs Direct Operating Costs (%) First moderation Implemented Optare maintenance commences 50% 45% 40% 35% 30% 25% 25% 29% 34% 39% 39% 40% 41% 46% 46% 47% 43% 46% 43% 46% 42% 45% 44% 20% 15% 10% 5% 0%

30 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

31 Key changes needed to ensure sustainability IPTN BUSINESS PLAN: SENSITIVITIES TO OPERATING COSTS Contribution to operating deficit after deducting fare income and other funding from costs 400 subsidised scheduled feeder buses Full feeders No scheduled feeders Scheduled feeders Bus operating variables Land use and travel demand patterns Business as usual Competitive VOC rates Full TODC TODC achievable by 2032 Non-fare revenue funding Positive swing Negative swing -R6,000 -R5,000 R-4,000 -R3,000 -R2,000 -R1,000 R0 R1,000 R2,000 R3,000 R4,000 R5,000

32 RISKS Sensitivity of outcome to key variables 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)

33 1. Enhancing demand patterns (TOD and TDM) Golden Arrow Bus Services 2. Passenger Rail 3. BRT along key corridors 4. Integrate GABS into network Bus 4. Quality Quality Bus mode Core feeders and direct services Peak only and all day services (depending on viability as TOD materialises) Integration Current characteristics with MyCiTi BRT trunks Easy Established transfers management Ticketing Many seats integration per vehicle Timetable Not good integration for seat renewal and level Branding boardingintegration (irrespective of which But good VOCfor operates long distance buses) point to Same point trips infrastructure (1 system) Real Net contract time information helps manage and monitoring risk although leads to monopoly supply Requires Some and use assignment other of BRT complexities dedicated of Contracting lanes and Function priority infrastructure at key congestion points

34 Seeking to create competition in provision of 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

35 Introducing competition into conventional bus services Possible stagger tendering

36 But challenges experienced in assignment of 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

37 1. Enhancing demand patterns (TOD and TDM) Minibus taxis will form a key part of the envisaged system 2. Passenger Rail Well positioned to benefit from New Generation technologies Slides to follow under technology approach Transformation of industry 3. BRT along key corridors Infrastructure must be designed for their integration into the network 4. Quality Bus 5. Hybrid Minibus-Taxi solutions

38 Passengers unhappy National Household Travel Survey for the Western Cape (StatsSA) 51% Behaviour of taxi drivers towards passengers 50% Taxis are too crowded 41% Overall are dissatisfied with the taxi services Weekend Argus - 11 April 2015

39 I N D U S T RY T R A N S F O R M AT I O N Towards a Future State 1 Facilitate the formation of Association-based Transport Operating Companies (TOCs) across the City as a precursor to the formation of PTI-based RTCs and contract-based VOCs RTC TOC VOC A Association

40 I N D U S T RY T R A N S F O R M AT I O N Towards a Future State 2 Facilitate the transfer of all Operating Licenses from individual operators to Association-based Transport Operating Companies (TOCs)

41 I N D U S T RY T R A N S F O R M AT I O N Towards a Future State 3 Invest in building the capacity of these TOCs in the same way the City has invested in a 3 year capacity building programme for the 2 taxibased N2 Express companies

42 I N D U S T RY T R A N S F O R M AT I O N Towards a Future State 4 Once the TOCs are formed and functional and able to form Regional Taxi Companies (RTC) contract the PTI management function (security, cleaning and minor maintenance) to these RTCs Other contracting opportunities eg. advertising rights at PTIs Land for depots/fuelling facilities

43 TRP EXPENDITURE (R MILLIONS) 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 TRP Objectives R7.7 billion over 7 years Projected Expenditure Actual Expenditure? Source: compilation of data from NT expenditure review

44 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 km or 5 7 years age)

45 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

46 1. Enhancing demand patterns (TOD and TDM) 2. Passenger Rail The foundation for New Generation services See slides that follow New approach to AFC 3. BRT along key corridors 7. IT/tech strategies/afc 4. Quality Bus 5. Hybrid Minibus Taxi solutions 6. NMT

47 Technology change If I had asked people what they wanted, they would have said faster horses Henry Ford

48 Uber Rapid growth Shifted people from private cars to public transport Solved safety issues Improving metered taxis? 51

49 Example of a minibus-taxi type service with e- hailing and flexible routes A POOL SERVICE where the needs of passengers are pooled and served together 52

50 Supply Demand

51 Supply e - Demand

52 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

53 E-hailed Pool Services Example 1: Direct service

54 E-hailed Pool Services Example 2: Feeder to trunk

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

56 Select which option you want and get price, waiting time, ETA for each option e - Via settings or in real time Trunk only (BRT / Rail) Pool plus Trunk Pool direct Personal plus Trunk Personal direct (metered taxi) Price Time Other options possible By Driver rating Universal Access Requires a centralized e-hailing platform to connect users to range of transport services and payment mechanisms

57 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 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

58 1. Enhancing demand patterns (TOD and TDM) 8. Physical priority for public transport 7. IT/tech strategies/ AFC 2. Rail 3. BRT along key corridors 4. Quality Bus Capital funding availability 6. to NMT implement BRT corridors with PTNG within reasonable timeframe across city is challenging 5. Hybrid minibus taxi System wide solutions improvements to general public transport, aligned to ongoing road maintenance and investment PT priority lanes must include enforcement measures

59 And highways - the other mobility backbone Huge investment Fast, no intersections Congested by single occupancy vehicles Limited priority use by public transport N2 BMT lane the only public transport facility on freeways

60 Efficiency of BMT lane Surveyed on 12th April 2016 Lane Type Buses Taxi Cars Other Total BMT Lane Occupancy Passengers % Pax Modal Split 53% 44% 3% 0% 100% A normal traffic lane gives a total of only 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.

61 Further optimizing fares On-street parking fees Increased rates allocation to 6% as integrated public transport network expands 1. Enhancing demand patterns (TOD and TDM) New local revenue sources to be developed: - Parking levy - Other sources 2. Rail 9. Revenue optimization 8. Physical priority for public transport 7. IT/tech strategies/ AFC 6. NMT 3. BRT along key corridors 4. Quality Bus 5. Hybrid minibus taxi solutions

62 Projected growth in passenger trips for MyCiTi Ph1, Ph2A, Quality Bus and New Generation services Passenger Trips (avg/month)

63 ZAR in Millions How secure is PTNG? how secure is PTOG? and BFI? 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 ) / / / / / / / / / /2022 Current Rands i.e. escalated per year Excludes adjustment funding

64 Financial big picture (real) Excludes GABS fares

65 1. Enhancing demand patterns (TOD and TDM) 10. Regulation, Enforcement and Network Management Requires the right combination 9. Revenue of business optimization models, management and technology 8. Physical priority for public transport 7. IT/tech strategies/ AFC 2. Rail 6. NMT 3. BRT along key corridors 4. Quality Bus 5. Hybrid minibus taxi solutions

66 Planning Authority Operating Licence and Route Consideration

67 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

68 The City, as Planning Authority, thus have the duty to direct in terms of regulated competition in the public transport industry

69 Operating Licence Applications When is Planning Authority direction required? - Granting of an operating licence - Renewal of an operating licence - Amendment of an operating licence - Transfer of an operating licence

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

71 Transport Service Determines Need TDA Input Required Minibus Taxi Seater Vehicle Seater Vehicle (Amaphela) Metered Taxi - Rank - Base - E-Hailing Scholar - Private - WCED CPTR Information (TRS) CPTR Information (TRS) Business Plan Business Plan Business Plan Contract with school or parents WCED Contract Direction Direction Direction Direction Direction 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

72 Routes belongs to the Planning Authority, who in turn grant public transport operators the authority to operate on any particular route for a specific period.

73 Public Transport Routes Planning Authority Consideration 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?

74 1. Enhancing demand patterns (TOD and TDM) 2. Rail 10. Regulation, Enforcement, Network Management 9. Revenue optimization ONE integrated, multimodal network 8. Physical priority for public transport 7. IT/tech strategies/ AFC 6. NMT 3. BRT along key corridors 4. Quality Bus 5. Hybrid minibus taxi solutions

75 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

76 THANK YOU Dawie Bosch Business Planning