Western Cape Business News

Send  Share  RSS  Twitter  10 Aug 2010

TRANSPORT: Concern About Bus Service


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THE Cape Chamber of Commerce has written to the City Council to express its concern at the model chosen by the City to run a new public transport service as well as the costs and potential for major financial losses.

In the letter to Mike Marsden, the City executive director for transport, roads and major projects, Albert Schuitmaker, the Chamber’s Executive Director says the Chamber strongly supports the initiative taken by the City to create and integrated public transport service but it did not agree with the approach.

He said the City had no experience in running public transport and may not have the expertise to do so.

Our main concern is the decision to create a municipal entity to run the new transport routes and then to contract four other companies to run the buses, run the fares and ticketing system, run the fleet management system and yet another company to maintain the bus stops and stations as well as provide the cashiers and customer service agents. This would effectively break down the service into five separate parts with no guarantee that the different contracted companies will be able to work together.”

The result would be a considerable management burden on the municipality which would have to deal with possible disputes between sub-contractors. It was also likely that each sub-contracting company would try to be as profitable as possible and this could increase costs rather than improve efficiency.

It is the Chamber’s view that bus operating companies have a better understanding of the supporting services they require, how to obtain them and how much they should cost than any new municipal entity is likely to have.”

In creating the infrastructure and purchasing the buses, the City has done its job and all it should do was to call for tenders to run the buses with the successful bidders free to use the service providers and software systems of their own choice.

The second major concern was the vagueness in the proposal document, particularly on matters of costs.

Municipal bus services around the world require substantial subsidies and with contributions from the Department of Transport on the decline, we must ask how much will be needed and where the money will come from. Property rates are already very high and we would like to know whether the city is planning to introduce new sources of revenue such as taxes on parking garages or tolls for commuter cars entering the city?

Much of the justification in the proposal document was based on the notion ‘the model tells us’. “If the input figures into the model are incorrect, the model will provide the wrong projections,” said Schuitmaker.

The Chamber believes it is essential to be open about costs and the possibility of losses before the service providers are contracted. We cannot afford another shock.”

The Chamber was also concerned about the risk of yielding to political pressure on matters like routes and timetables. “Popular” decisions would tend to undermine the viability of the service and the city’s proposals to insulate the municipal entity responsible for the service from the City Council were not convincing.

We are also concerned that the proposals fail to deal with the old problem of a lack of co-ordination between rail, bus and mini-bus services. In fact, it might be argued that the City is complicating the problem by bringing new operators and services into the picture, making it more difficult for any future umbrella body to co-ordinate public transport.

The Chamber would like to stress that we have a great opportunity to create the public transport service Cape Town deserves but it is essential to get the formula right. We have only one chance and we cannot afford to blow it.”

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