MyCiTi: brilliant service delivery or irresponsible public planning?

In 2007, the City of Cape Town announced it would be introducing a brand new bus service. There were several reasons for this. 2010 was the year South Africa was to host the World Cup. Matchday transport requirements were vital. and a huge capital injection by National Treasury provided the financial base. In accordance with the Integrated Public Transport Network (IPTN) model supported by the National Land Transport Act (NLTA), the City was motivated to not only improve public transport, but to overhaul it entirely. ¹

In its haste to start the new public transport system, the City’s 2007 Public Transport Implementation Strategy provided a very brief comparison of the options available. In essence, the comparison summarised the available options, then concluded that BRT was the most suitable without much evidence to back it up. ² The table included only new options and failed to consider how much it would cost to achieve a similar level of service by scaling up existing operators. The City said that MyCiTi could be operationally efficient, but this was impossible to forecast without an economic impact, cost-benefit analysis or demand assessment, none of which I have been able to find.

The City rolled out a BRT system ³ along the West-Coast seemingly based on the premise that similar services have worked internationally, and as a result developed grossly excessive infrastructure given the level of demand. Indeed, once the project was off the ground, it became clear that the system would not be financially efficient at all. The 2012 MyCiTi business plan stated:

It is evident that contrary to initial estimates the ongoing subsidy requirement for the system once rolled out across the whole city would significantly exceed the current subsidy levels to provincially operated bus subsidies. ⁴

The Phase 1A has reported operational losses of approximately R140m ⁵, not surprising since it transports only 2,458 passengers per day into the central city. ⁶ A full BRT system requires a minimum passenger/peak hour/peak direction of around 4,000 to justify the costs according to the International Association of Public Transport (UITP). ⁷ Instead, demand analysis appears to have been conducted post-fact. This comment from the business plan is an example:

The current patterns of demand result in many stations having very low levels of usage. Further phases of the MyCiTi system will only provide for stations at points of high usage, and provide for stops elsewhere on trunk routes. ⁸

If careful demand studies had been done in the first place, the City could have avoided this issue. In this context, the City released plans to introduce a temporary BRT trunk route as the second phase of the project, known as the N2 Express service. Its premise is that the Metrorail service connecting Khayelitsha and the CBD is inadequate and needs upgrading. In the interim, the N2 Express Service will provide a temporary solution. The intent is for it to be operational by the end of 2013. The project life, however, is unknown, with the City stating that its duration would be indicated in the 2013 Business Plan. This service is intended to provide a “top-up” function, as the bus service would, rather than replace existing transport services, serve the over-flow of commuters.

Mayor Patricia De Lille explains:

This express service will provide new avenues of opportunity for our people who have been let down by the lack of capacity in passenger rail services. Additionally, new services are planned for … suburbs where passenger demand is high, but rail service does not exist. ⁹

But the numbers do not back this up. The 2012 City of Cape Town Transport Survey provided a base from which to avoid the mistakes and assumptions made in the rollout of Phase 1A. In the 2012 MyCiTi plan, the City released details of this “high demand”. The identified demand surplus to be absorbed by the new N2 Express service is categorised into the three proposed routes.

1. Khayelitsha CBD to Cape Town: 482 peak hour/peak direction

2. Khayelitsha Nolungile (Site C) to Cape Town: 488 peak hour/peak direction

3. Mitchells Plain to Cape Town: 523 peak hour/peak direction

These numbers do not warrant the kind of service that the City is looking to roll out. While not a full BRT leg of the City’s planned MyCiTi rollout, the system can be categorised as a light BRT system that uses articulated busses. Using UITP best practice guidelines, each route requires a minimum of around 1,500 passengers per hour/peak direction to justify its rollout. ¹⁰. Therefore, to be viable in terms of international best practice, demand would have to grow to at least three times what is being projected. The first phase cash flow forecasts of the 2012 business plan reflect operating costs of roughly R120m per year and operating revenues of R40m, again one third of what it needs to be. An operating loss of R80m per annum for a small, temporary service is difficult to justify. This loss is coupled with forecast capital and infrastructure costs of about R340m. How much it might have cost Golden Arrow Bus Services (Gabs) to deliver a similar service, for example, is unclear.

That the service is designed not to erode the local demand for other providers is also confusing. The quality of the MyCiTi bus system vastly exceeds that of the minibus taxi industry and formal busses (Such as Gabs and Sibanye), but this is not going to be reflected in prices. Why would anyone opt to use a dilapidated Golden Arrow bus or taxi when they could use a brand new MyCiti bus for the same price? The City will subsidise MyCiTi, cap its fares, and provide a superior service to existing modes. This goes against its insistence not to erode local demand for other operations as it will naturally attract passengers from those other operators.

The N2 Service was originally designed to run thirty 18m articulated busses to be purchased for R128m. This would give the system the capacity to transport volumes consistent with the “excess demand” that was identified. On 22 May, however, the City announced that the tender for these vehicles was awarded to Volvo SA for the delivery of 40 busses at a cost of R180m. ¹¹ It is unclear why this upscale was necessary, but it infers that the system will now likely reach a capacity that would exceed the levels of identified “excess demand”. It is unclear how this will play out in practice, but in light of the “top-up” function that the service is intended to serve, this does not exactly add up. Add to this the historical volatility in the transport industry, and the service is entering a dangerous space between harm and good.

Indeed, tensions between the City and Gabs reached boiling point recently after Gabs filed for a mediation and arbitration process to be enforced to settle disputes in the Western Cape High Court. These disputes do not concern the N2 Express service, but relate to the methodology used by the City to determine compensation and operating contracts in the Phase 1A and 1B rollouts. The application was dismissed with costs, and Gabs has decided to challenge this outcome in the Supreme Court of Appeal. ¹². This conflict is far from over.

The MyCiTi rollout might in fact not be the well-planned answer to the city’s transport woes. A rhetoric exists that by questioning the system, Gabs are opposing an improvement to the public good. The mayor said that Gabs sought “to block an initiative that will directly benefit the poor of this city”. ¹³ No one can dispute that public transport is not good enough, that apartheid planning has meant that the city’s poorest citizens are also neglected by the transport system, or that the MyCiTi packages service and experience is far superior to its counterparts.

However, does this mean that it is okay to produce a service that Gabs estimates is around seven times costlier than a standard bus service (Cronje, 2012)? And is it okay that huge, unsustainable, perhaps even unexpected operational losses are covered by public revenue? Indeed, is it okay that the levels of demand for the system never warranted a BRT system in the first place? Perhaps these are the questions that need to be asked, and that the assumptions of the perceived need for a new service of this kind are in contrast to the city’s highly nuanced developmental needs, no matter how exciting the project might be for its citizens.

Eichhorn is a Masters Student at the UCT School of Economics. You can follow him on Twitter: @MartinEct

Footnotes