A presentation by Jack van der Merwe (Chief Executive Officer: Gautrain Management Agency), at the Transport Forum SIG: "Cost Effective Public Transport Management Systems" on 12 May 2016 hosted by University of Johannesburg. The theme of the presentation was: "Is profitable public transport possible?"

1. Is Profitable Public Transport
Possible?
Mr. Jack van der Merwe
CEO: Gautrain Management Agency
12 May 2016

2. Question: Is Profitable
Public Transport Possible?
Two Approaches:
1. System Approach

3. 1. System Approach –
Public Transport
• Basic assumptions:
– Transport demand – is the need for the movement of people,
goods and services.
– This demand for the movement of people, goods and services
determines the design parameters of the system that is required.
– In any transport system there are usually three peak periods,
morning-, midday- and afternoon peak periods.
– During these peak periods the demand usually outstrips the
supply, on average 3 to 6 hours per day
– During the off peak periods the supply is usually higher than the
demand, on average 21 to 18 hours per day

4. Capacity Constraints - Gautrain

5. Capacity Constraints - Gautrain

6. 1. System Approach –
Public Transport (cont.)
• Basic assumptions (continue):
– Public Transport System Design
– Although the demand for the movement of people, goods and
services determines the system that is required.
– Once the public transport system is completed the system is run
from the supply side.

7. 1. System Approach –
Public Transport (cont.)
• Basic assumptions (continue):
– Public Transport System Design
– The routes and the time tables are developed from the supply
side, irrespective of the actual demand on the specific route. This
is crucial if one is to:
• Attract infrequent users,
• Tourists,
• Convince the maximum number of people living or working in the
metropolitan area that they don’t need a car to travel in the city, for
their everyday home-work, home-school, home-leisure and work-
work trips.
• So one cannot distinguish between high volume routes and route
with less volumes

8. 1. System Approach –
Public Transport (cont.)
• Public Transport System Design (continue)
– Must be based on accurate information
– Develop and populate a demand model to determine the current
and future movement of people, goods and services in the area.
– An example of such a model is the EMME4 model that has every
trip in the area’s origin and destination (O-D) link, with special
focus on the morning peak trips.
– Each O-D trip link must also have the following information:
– Time of the trip;
– Day of the week;
– Modal choice / modal choices; and
– Route selection.

9. 1. System Approach –
Public Transport (cont.)
• Public Transport System Design (continue)
– This model must be able to generate the current transport
system’s travel demand (calibration), and
– Future scenarios to predict travel patterns and volumes for the 10-
, 20-, 25-, and 30-year networks
– This process is very data-driven and the latest available data,
census, household survey etc. must be used.
– The demand model must be updated with any new, relevant data
– New challenge is what do we do with-, and how do we handle
“big” data in future?
– “Real-time” information;
– Instant feed-back?
– Speed of response?
– Social media?

10. 25-YEAR INTEGRATED TRANSPORT
MASTER PLAN
(ITMP25)

11. Transport Planning
Current –
Status Quo
Predicted –
Future State
Population Growth –
(Number of workers)
Land-use Patterns –
(Where will the People live)
Economic Growth –
(type, location, labour requirements)
13 (GTIP5) & 10 (ITMP25) Major Interventions* or “do nothing”*
Enablers*** or “do nothing”
2012
2037
External Factors**

12. Transport Planning
– External Factors**
• Environmental
– Pollution
– Availability of
fossil fuels
– New propulsion
technologies
– Focus on
renewable
energy
• Policy &
Legislation
– Shift to PT
– User-pay
principle
– Increased
congestion
• Globally
– 2008 global
meltdown (sub-
prime borrowing)
– 2015 slowdown
of Chinese econ.
(collapse of
commodity
markets)
– Green-house
gasses & public
awareness

13. Transport Planning –
Enablers***
• Government
– Long term vision
• NDP, Gauteng Vision 2055
– Legislation
– Regulations
– Guidelines
– Norms & Standards
– Funding
– “Seed” Capital
– Departmental priorities
– PPP’s
• Private Sector
– Long term appetite to
invest in infrastructure
– Feasible Business case
– Attracting capital (foreign
& local funding)
– Enabling environment
• Long term stability
• Governance
• Perception on Corruption
• “Red-Tape”
– PPP’s

14. Key focus areas:
• Priority public transport corridors
• Strategic modal transfer nodes and interchanges
• Freight routes and logistics centres
• Rail as the backbone of an integrated public transport
system
• Protection of future priority corridors, future road
networks, passenger and freight rail networks, and
airports.
The plan further includes a vision to support and
strengthen the Gauteng Global City Region.
Geographical Information Systems and Intelligent
Transport Systems form a practical basis for the plan.

15. Sustainable Transport
• Reduce travel:
• Change travel patterns
• Regularity & extent of travel in peak periods, trip lengths,
etc.
• Shift in modes:
• Shift from: Motorised Non-motorised transport
• Shift from: Private Public transport
• Shift from Road Rail
• Technology:
• Environmentally friendly technologies
• Intelligent Transport Solutions (ITS)

16. Future
predictions of:
Economic
Growth,
Population
& Land-use

17. Economic Growth
• Gauteng Base Scenario* was used for the Economic
Growth Forecast, where growth is less than 6%
• Likelihood is estimated at <1 0% that growth would be >
6%
Gauteng 2010 2025 2037
Population 11,2 million 16,3 million 18,7 million
Formal
Workers
3,9 million 6,7 million 8,6 million
* Source: Global Insight 2013
Population Growth

18. Job Opportunities: Formal Workers

19. Gauteng SDF Based Approach vs. Core Transit Intervention (2037)

20. Addressing the challenge
The Demand is higher than the supply (peak periods)
Origin Destination
Land-use Planning
Integrated System
Availability & Punctuality
Trigger
• Promote counter flow
24 million trips/day

21. Zürich – ZVV Zürcher Verkehrsverbind

23. • Zurich PT system – point of departure
– The PT system is the back-bone of the city, and the country’s
economy;
– You don’t need a private car in the city (day or night)
– You will be stupid to use a private car in the city with:
• Prohibitive prices for parking;
• Very limited parking space available;
• congestion pricing;
• Low cost public transport; and
• An efficient metered taxi’s service (door to door – expensive)
Zürich – ZVV Zürcher
Verkehrsverbind

24. • Zurich
– 370 000 people stay in city
– 1 000 000 job opportunities in city
– One of the best PT systems in the world, but only
• 33.3% fare box revenue;
• 33.3% City subsidy; and
• 33.3% State subsidy.
– Reasons:
• Supply-side system
• Whole city has a PT grid of a maximum of one kilometer
• Maximum 8 minute headway during peak and minimum 15 minute
headway during off-peak, 20 hours per day
Zürich – ZVV Zürcher
Verkehrsverbind

25. » Desi
Design
System Design
Financial Model
Predicts Ridership
Fare structure
Fare box revenue
Calculates OPEX & CAPEX

26. » Desi
Design
System Cost
(Financial Model)
System Income (Fare Box)
(Financial Model)
NB: System Cost = System Income
- System is viable & will operate at no cost to the Council.
- Project may proceed
- Treasury funds (BRT for SWC)

27. » Desi
• N.B. System income is a function of the fare box income
which is linked to the fare structure
• Project goes to the Mayoral Committee, who interrogate the
fare structure. After a debate they conclude:
• BRT ticket prices may not be higher than taxi-fares;
• School children & pensioners travel at half price;
• Huge discounts for loyalty customers (monthly, quarterly and yearly)
• PT fares must compensate for historical spatial distortion patterns
• (it then follows that)

PT is a social service
 PT is an essential service and key to economic growth

28. » Desi
• Conclusion a PT system will, and should, be subsidised

29. Question: Is Profitable
Public Transport Possible?
1. System Approach
Answer: As a system - No

30. 1. System Approach –
Public Transport
• What should we be monitoring if we are not focussing
on profitability?
– Efficiency and effectiveness of the system
– If the system is inefficient the fare box income (say 33.3%) can
reduce and the subsidy portion will have to be increased
– If this increase in subsidy is not possible (or budgeted for), then
the system degrades, the ridership reduces and the downward
spiral begins (Metrorail)
– People are forced to other, less efficient, modes of transport
resulting in congestion, loss of productivity and quality of life

31. 1. System Approach –
Public Transport
• How do we control efficiency and effectiveness of
public transport?
– Ensure an integrated public transport system, where there is a
link between transport planning and land-use planning (ITP’s and
IDP’s) for all three spheres of government
– Competition for a route and not on a route. This must be based on
correct data to ensure that routes are not over-subscribed through
the issuing of too many permits (CPTR-information)
– Proper law-enforcement of the permits
– Ensure common:
» PT information;
» Timetables;
» Ticketing;
» Fare harmonisation
» Modal transfer nodes

32. 1. System Approach –
Public Transport
• How do we control efficiency and effectiveness of
public transport (continue)?
– Centralised setting of priorities for CAPEX project
– Centralised point of receipt of PT subsidy and central point for the
motivation for subsidy (advocacy)
– Centralised branding, marketing & communication on PT (TfL)
– Ensure common:
– PT information;
– Timetables;
– Ticketing;
– Modal transfer nodes
Creation of a Transport Authority

33. Question: Is Profitable
Public Transport Possible?
Two Approaches:
2. Holistic Approach

34. Future Cities

35. How Will Cities Look
in 2025?
• By 2025, almost 60% of the world’s population will be
living in urban areas
• Rapid urbanisation & economic development will increase
the demand for the movement of people, goods &
services
• Global trend is towards private vehicles as the preferred
mode of transport
• 6.2 billion private motorised trips will be made every day
in cities worldwide
• Gridlock, pollution, road traffic accidents & greater
dependency on fossil fuels

36. How Will Cities Look
in 2025?
• If left unchecked by 2025 worldwide transport related
greenhouse gas emissions will be 25% higher than 2005
levels, this will:
– Put us firmly on the path towards potential catastrophic climate
change
– Transport energy bills will skyrocket
– Higher levels of energy consumption could pose a threat to global
energy security
– Traffic congestion will bring cities worldwide to a standstill
– Half a million people will be killed in road traffic accidents every year
– Potentially catastrophic climate change

37. How Will Cities Look
in 2025?
• UITP & the International Energy Agency developed an
urban mobility scenario for 2025:
– 2009 World UITP Congress in Vienna:
“Double the market share of public transport worldwide by
2025 (PTx2)”
– The effect of PTx2 will be:
• Save 170 million tons of oil;
• Reduce CO² equivalent by 550 million tons;
• Reduce urban traffic fatalities by 15%;
• Double the number of jobs in public transport operations;
• Reduce the risk & obesity & heart diseases by 50% (walking, cycling & PT)
– In 2012, PTx2 was translated into a communication
campaign called:
“Grow with public transport”

38. 2. Holistic Approach –
Public Transport
• The role of public transport in a global context
– For global cities to survive and grow (GGCR) it must develop
transport systems that:
• Gives top priority to an integrated public transport system;
• Drastically reduce the carbon-footprint of its transport system;
• Uses renewable energy sources;
• Promotes optimal modes of transport;
• Must ensure /enforce maximum shift:
– Shift from motorised to non-motorised transport
– Shift from private car use to public transport
– Shift from road to rail transport (people and goods)

39. Question: Is Profitable
Public Transport Possible?
1. Holistic Approach
Answer: Yes

40. Thank You