MyCiti costs under spotlight
THE City of Cape Town has spent R175 million on running the MyCiTi bus service since the World Cup in 2010 against an income of only R35m, according to figures released by the city.
The city says the MyCiTi bus service may be running at a huge deficit, but it is also a “social project that will benefit the poor and improve the quality of life of all citizens”.
Mayoral committee member for transport, roads and stormwater Brett Herron says the project has the full support of the national Transport Department and its funding relieves the financial burden on ratepayers.
A breakdown of some costs from 2010 to date:
l Income of R35m.
l Projected direct running cost of buses, including insurance and vehicle tracking, is R43m.
l Overheads regarding buses, including depot costs, R39m.
l Projected cost for managing and maintaining the stations (including revenue collection) and insurance is R55m.
l The projected cost associated with safety and security, cleansing, passenger information, municipal services, communications and marketing and landscaping is R27m.
l Consultants, R11m.
“All services both public and private have to first invest substantially before they are able to break even. The ratio between direct vehicle operating costs and fare revenue is best described as percentage cost recovery.
“The figures show that cost recovery of direct vehicle operating costs is 87 percent. The percentage of cost recovery has increased from month to month as passengers have increased.”
The IRT costs also prompted Cape Muslim Congress councillor Yagyah Adams to raise concerns about the financial sustainability of the project. “The Integrated Rapid Transport System (IRT) has been under serious attack from the Cape Chamber of Commerce in several media reports. Essentially the chamber is questioning the financial sustainability of the service.
“In response, the political champions of the project are rallying around the social values attached.”
At a recent meeting between the city and the chamber, the organisation’s president, Michael Bagraim, raised the issue of costs and sustainability, particularly in the Khayelitsha and Mitchells Plain phases.
Adams said that in a finance portfolio workshop about the IRT held last week, it became apparent to him “that perhaps the chamber was correct in its misgiving”.