Presented at the 4th Global Infrastructure Basel Summit 21 & 22 May 2014.
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GIB - Bankability Study by Marco Grossmann at GIB Summit
1. GIB Bankability Study on
City of Johannesburg Fuel Switch
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May 21th 2014
Marco Grossmann
Project Leader
2. 2 Global Infrastructure Basel Foundation ยฉwww.globalinfrastructurebasel.com
Content
1) Goal of and Approach to the Bankability Study
2) Rea Vaya BRT and Metrobus
3) Draft Content Bankability Study
3. 3 Global Infrastructure Basel Foundation ยฉwww.globalinfrastructurebasel.com
Goal and Approach
The ultimate goal of the study is to create a document that serves potential
investors as brochure for financing a fleet of approximately 400 Diesel Dual Fuel
buses, by:
โข Applying the GIB Grading to mitigate risk and to showcase sustainability of the
project in order to potentially lower borrowing/interest rates
โข Conducting in depth analysis of the fuel switch of Rea Vaya and Metrobus
The approach is not to reinvent the wheel, but:
โข To hold qualitative interviews in order apply the GIB Grading
โข To collect, analyse and further develop already carried out work
โข To build a tailor made financial model
4. 4 Global Infrastructure Basel Foundation ยฉwww.globalinfrastructurebasel.com
Rea Vaya BRT
โข Being rolled out in phases
โข Phase 1A: for 2010 SWC from
Soweto to CBD
โข Phase 1B: second route from
Soweto but different alignment
โข Phase 1C: linking North and
South and creatingTOD
opportunities
5. 5 Global Infrastructure Basel Foundation ยฉwww.globalinfrastructurebasel.com
Rea Vaya
โข Phase 1A
โ 25k of trunk route (dedicated)
for 18 m articulated buses
โ 3 complementary and 5 feeder
routes using 13 m buses
โ 30 Rea Vaya stations service
passengers
โ Passenger numbers average of
43 000 per day
โ 143 Euro IV buses
โ 1000 permanent employment
โ Registered for voluntary carbon
credits
โข Phase 1B
โ Another 18 km, 17 stations
โ 134 Euro V buses
โ Being rolled out since October
2013
โ Projected passenger numbers
60 000 per day
โ 600 permanent job opportunities
6. 6 Global Infrastructure Basel Foundation ยฉwww.globalinfrastructurebasel.com
Metrobus
Timeline
โข 1942: Metrobus established
as City department
โข 2001: Metrobus becomes a
municipal owned entity
โข 2010/11: Transport
Department looks at future
options for Metrobus to
respond to changing public
transport environment in
City, aging fleet and
outdated fare collection
system
Key facts and figures
โข 1000 employees
โข 450 buses
โข 3 major depots
7. Draft Content of Bankability Study
Global Infrastructure Basel Foundation ยฉwww.globalinfrastructurebasel.com 7
1. Context and selected best practice examples
2. Sustainability and Risk Analysis
3. Technology analysis
4. Technology provider
5. Logistics/Infrastructure
6. Legal and Policy Framework
7. Financial Cost/Benefit Analysis
9. 9 Global Infrastructure Basel Foundation ยฉwww.globalinfrastructurebasel.com
Technology Analysis 1/2
General Description of Dual Fuel Technology (DDF)
โข NGV market overview
โข Technical description of DDF
Economy
โข Proven and Safe Technology
โข Reduced running cost due to lower cost of CNG
โข Effects on maintenance cost
โข Availability of CNG / Grid, possibility to diversify
to Biogas/methane (Fuel Security)
Ecology
โข Reduced Carbon Emissions (15 โ 20 %)
โข Huge potential in Biogas/methane for further reduction (as well as NOx, PMs etc.)
Society
โข Job creation opportunities through CNG, Biogas, TOD
โข Local assembly of body and chassis
Ecology
Society
Economy
10. 10 Global Infrastructure Basel Foundation ยฉwww.globalinfrastructurebasel.com
Technology Analysis 2/2
Building on todays innovation
for tomorrows solutions
Maturing
โFit for Purposeโ
technology
Innovation Cycles
for each solution in
an integrated and
sustainable
manner
Low Skill Jobs
and High
Innovation
Medium Skill
Jobs and High
Innovation
High Skill Jobs
and High
Innovation
11. 11 Global Infrastructure Basel Foundation ยฉwww.globalinfrastructurebasel.com
Logistics and Infrastructure
Stakeholder-Analysis
โข Gas Distributors,
โข Grid Operators,
โข Regulating Bodies
Fuel Security
โข Pricing policies regarding CNG
โข Availability of CNG, incl. outlook
โข Solutions for Filling Stations
12. 12 Global Infrastructure Basel Foundation ยฉwww.globalinfrastructurebasel.com
Legal and Policy Framework
Policies and Regulations in place e.g.:
โข Municipal Financial Management
Act
โข Supply Chain Management Act
โข Division of Revenue Act
โข Land Transport Act
โข Requirements towards local job
creation, public consultation etc.
13. 13 Global Infrastructure Basel Foundation ยฉwww.globalinfrastructurebasel.com
Financial Cost/Benefit Analysis
Composition of tailor made financial model, by comparing
Diesel vs Diesel/Gas vs Dedicated CNG in terms of:
โข CAPEX,
โข OPEX (bus running and fix cost),
โข Rate of Return (IRR),
โข Net Present Value (NPV),
โข Payback time, lifetime analysis,
โข Sensitivity Analysis
14. Thank you for your attention!
Contact information
Mr. Marco Grossmann
marco.grossmann@ecos.ch
+41 (0)61 205 10 36
Editor's Notes
Transport oriented development
collective and shared vision for the future of Johannesburg
Johannesburg Growth and Development Strategy 2040 (JGDS), which aims at making public transport, walking and cycling the mode of choice by 2040. It consolidates the former fragmented strategies such as โJoburg 2030โ, the Human Development Strategy (HDS), the Integrated Transport Plan and the City Safety Strategy. It provides:
A vision and mission โ which serves as a mental picture of Joburg, the city, byย 2040;
Principles โ the values held by the City, as first articulated in the 2006ย GDS;
Outcomes โ what the City seeks to achieve byย 2040;
Long-term outputs โ the deliverables through which the City plans to achieve the desired outcomes;ย and
Indicators โ the measures through which the City plans to assess progress against its desiredย outcomes.
Based on 300 DDF busses operating in the city
Bio methane of CNG consumption: 9000 GJ per month , at R 70 to 100 per Giga joule, depending on what the city negotiate
ย ย
ย Job could be created in bio-gas production portion of the value chain: 238
This is based on cultivating and harvesting with machinery, by hand more jobs could be created, not practical and not as reliable.
ย
ย Job could be created in bio-gas upgrading and transport : 368
ย Job could be created in CNG DDF conversions (new and old) ย : 30
Total jobs: 632 jobs for 300 busses
The MFMA aims to modernise budget, accounting and financial management practices by placing local government finances on a sustainable footing in order to maximise the capacity of municipalities to deliver services to communities. It also aims to put in place a sound financial governance framework by clarifying and separating the roles and responsibilities of the council, mayor and officials.The MFMA is required by the Constitution, which obliges all three spheres of government to be transparent about their financial affairs. It also forms an integral part of the broader reform package for local government, as outlined in the 1998 White Paper on Local Government
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