TRANSPORT: Doubts About New Bus Service
Recent Western Cape Business News
THE Cape Chamber of Commerce has called for a total rethink on the plans for the MyCity bus service and rejected the City’s claim that MyCity will provide a superior service at a comparable cost.
In the response to the City’s call for comment, Albert Schuitmaker, Director of the Chamber, pointed out that most MyCity passengers would have to stand and that this alone would destroy the claim of a superior service.
The Chamber also challenged many of the assumptions built into the report and warned that underestimates of costs and over estimates of patronage could create severe financial problems for the City.
“Our reading of the ‘business plan’ leads us to believe that the City intends to take over and run all road-based public transport. This is an enormous task and the cost will be roughly equivalent to one third of the City’s massive R19.2 billion rand budget. The estimated cost of the full MyCity project is R6.14 billion per year in 2010 rands or 32 percent of the present municipal budget.
“To put this figure in perspective one should note that the City’s total income from property rates, penalties and charges amounts to 21.6 percent of the Budget.”
The Chamber said the process used by the City was flawed. It had already advertise four service provider contracts in terms of a model that had not been approved and was still open for public comment. “This leaves the impression that the City has already made up its mind and that the present consultation exercises are simply designed to meet legal requirements in terms of the Municipal Finance Act and that the City has no real interest in comment…”
The Chamber questioned the City’s “extravagant claim” of providing a superior service at a comparable cost. It planned to take over or absorb all the present road-based public transport operators and said they will not be financially worse off and that no jobs would be lost. The new buses, the infrastructure and the cost of municipal supervision would increase costs and it was difficult to see how the comparable fares would be achieved.
The Chamber said the plan required 300 buses for the initial service with a human resource support system which was double the staff-to-bus ratio of the current operator in the area.
The plan was based on the Curitiba and Bogata bus services but the Chamber said applying this model to Cape Town produced some unacceptable results. “The 12-metre bus, for instance carries 36 to 44 seated passengers and 47 to 58 standing ones. The 18-metre articulated bus carries 58 seated and 88 standing passengers. This means that most passengers will have to stand. This may be acceptable in Columbia where the average trip is 7 km but it will not be acceptable in Cape Town where trips will be much longer.” It was unrealistic to expect passengers to give up their seats in cars, taxis and buses to become standing passengers at a similar cost.
The Chamber has already rejected the proposed model in which a municipal entity uses four private contractors to provide the different elements of the service and says that using a single operator to run the service would be a better plan.
It warns that a municipal entity with 30 managers as well as supporting staff would simply add to costs.
Municipal bus services around the world were subsidised and in Cape Town the subsidy was about 50 percent. Department of Transport subsidies were being reduced and “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?”
The City was counting on a share of the fuel levy but it had no say on how the Government apportioned this revenue and the fall-back would be property rates.
MyCity was counting on R10m to R20m a year from advertising revenue but experts in the industry said this was wildly optimistic and the Chamber pointed out that City Council was opposed to most outdoor advertising and would not even permit advertisements on bus shelters and litter bins.
In the latest development, the City assumed that the service would carry 8 200 passenger a day between the CBD and the airport. This is equivalent to the full passenger complements of about 55 airliners each with 150 passengers, or 20 fully-laden 747 Jumbo Jets per day.
Over a month this amounted to 250 000 passengers, roughly half of all domestic passengers either leaving or arriving at the airport during the World Cup month of June.
To win this share of the market, MyCity would have to compete with existing services such as hotel shuttles, taxis, private cars and hired cars. It was also likely that most passengers would not want to go to the CBD but to the residential areas in the north and south of the City.
The Chamber said the business plan was seriously flawed and called on the City to get a second professional opinion or an independent review.
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