Cape Town - Rising operational costs and a fare venue shortfall of about R100 million have placed the financial sustainability of the MyCiTi bus service at “significant risk”, a report by the City of Cape Town shows.
The city is reviewing urgent cost-cutting measures to ensure the future of the service.
And while it is “moderating” the service to ensure that it remains financially viable, its Transport for Cape Town department has cautioned in its hard-hitting annual report that “further savings will be difficult to achieve without undermining the quality of the MyCiTi system”.
The city has blamed at least half of its revenue shortfall on having to compete with the minibus taxi industry, which it failed to “contain” as planned.
But mounting financial pressure means the city may be forced to retain minibus taxi services in some areas where demand for public transport does not warrant the money the metro would have to spend on running a full MyCiTi service.
Commercial contracts - such as the co-funding partnership with the Table Mountain Aerial Cableway Company for that MyCiTi route - could also be encouraged to improve the service’s viability.
“This is something developers of high-volume destinations like entertainment and shopping centres should take note of,” said Brett Herron, the mayoral committee member for transport.
National government was also blamed for its poor funding of the city’s public transport network.
Responding to the financial constraints highlighted in the annual report for July 2013 to June 2014, Herron said: “It is important to remember that this is a very long-term project and it will take years before the fine-tuning of supply and demand will achieve balance.”
He said there was a negotiating premium in the cost of the operating contracts and when these contracts were put out to competitive tender there would be some cost savings.
“This underscores how important it is for all of us to take a long view on the project and to avoid short-term politically opportunistic criticism.”
In a separate report, also considered by the portfolio committee, Transport for Cape Town reported that there were 14 bus breakdowns on the recently launched N2 Express Service in July, and 15 in August.
“The reality is that bus breakdowns do occur during operations, especially on commissioning of a new service with newly introduced vehicles.”
Herron said on Tuesday that this information was incorrect, and referred to an incident in September when the warning lights of seven Volvo buses on the N2 Express route flashed. This was not a technical problem but a warning light about emissions.
But Charlotte Heynes, the ANC’s whip in the transport portfolio committee, said the high breakdown rate of the buses on this route was an “insult” to the people of Khayelitsha and Mitchells Plain.
According to the annual report, there are problems with the quality of the buses being assembled at a Blackheath plant.
The entity also blamed strikes for the delayed delivery of vehicles.
The report does, however, look at steps that have already been taken to cut costs without compromising the level of service:
* Optimising routes and changing the size of the buses according to demand.
* Curtailing some routes and frequencies where demand is low, including the cancellation of some routes and changes to the late-night services.
* Cutting back on staff when kiosks in low-demand areas are closed.
* Improving signalling and other infrastructure changes.
* Smoothing the peak to off-peak differential by increasing peak fares compared with off-peak fares and supplementing the MyCiTi services on some routes during busy periods by allowing taxis to operate.
Herron said: “All of these measures bring balance to the service after we have now had the chance to observe the operating realities.”
The assumed fare revenues for the first phase of the MyCiTi never materialised, and the estimated projections in the 2010 and 2012 business plans were overstated.
Instead of coming close to covering direct vehicle operating costs, the actual revenues for phase 1A were about R100m lower than anticipated.
The city was unable to cut back on costs by reducing its MyCiTi operations because of the high peak demand and failure to fill the buses to capacity.
Transport for Cape Town, the entity responsible for the report, indicated, however, that the entire system’s plan was based on the assumption that an integrated rapid transit system could be viable without a subsidy and that it would eventually break even and run at a profit.
“It should, however, be noted that no public transport service in the world runs at a profit, let alone in a South African city where the poor are marginalised and placed far from places of employment, sometimes 45km to 70km (away).”
The authors admitted “various system technical failures” hindered the efficient running of the system. There was also resistance from passengers to filling the buses to the legal limit, meaning the actual capacity was 20 percent lower than intended.
Meanwhile, the ANC said the city had failed to compensate taxi operators, and R632m allocated for this in the 2012/13 fiscal year had still not been spent.
“Reports have it that only 85 of the 123 operators have been compensated to date,” said Heynes.
Herron said this was incorrect, as the city had in fact paid out about 520 operating licences and the number was increasing as more taxis withdrew from the inner city.
Cape Argus