Gautrain – Can make a sustainable difference to public transport ?

1. Dr Andrew Shaw Development Bank of Southern Africa Gautrain – Can make a sustainable difference to public transport ? Presentation to the Transport Portfolio Committee, Parliament, Cape Town, 9th Nov 2005

2. Overview of the presentation • The need for effective public transport and the strategic benefit of Gautrain • The risks • The importance of feeder and distributor services • Comments on the appraisal methodology • The appropriateness of an integrated PPP approach • Existing public transport as an alternative to Gautrain • Concluding remarks

3. More traffic New Roads Traditional public transport centers atrophy Social exclusion: Non-car users marginalised New car centered mobility sites Public transport declines • Suburban sprawl • Retail parks • Dispersed office parks • Motorways define location advantage Adapted from European Conference of Ministers of Transport, 2001 When public transport is not an alternative to private car cities end up unable to provide for the needs of the public transport dependent Congestion

4. Township to CBD Gautrain Performs well Performs poorly Drivers of efficiency in public transport • Strong multidirectional flow in inbound and outbound direction • Short average travel distances with many passengers traveling for only part of the corridor length, but with short trips spread over the length of the corridor (often termed trip turnover) • Trip origins and destinations located directly within the corridor to limit the need for less efficient feeder patterns • High overall travel demand allowing economies of scale and the use of people mover such as articulated bus or rail

5. Gauteng in a global context Developing cities 2000 Population (Mill) 2010 Population (Mill) Rail extension proposals ● Rail transit available Tsukuba Metro extension (58 kms) proposed Significant network enhancement Metro rail system proposed Sao Paulo rail ring proposed Line extensions to existing metro proposed Rehabilitation & line extension of Bangladesh railways, metro proposed New York city subway modernization project Circular railway proposed Extending links from Calcutta metro to airport Metro system under construction Metro system under construction Three new lines under construction Light rail extension proposal Extension and moderisation of subway 17 new rail lines proposed 4 new lines to be constructed to complete the network Major construction underway for 2008 olympics 1995 plan for LRT extension still under review Beijing to Tianjin high speed link Subway line extension plan New automated meteor line plan Extension of light rail system Additional network segments being constructed Recently constructed Skytrain Short 10km metro system to be extended Source : UN, Light Rail Transit Association and websites of individual cities

6. Gauteng as an urban conurbation • Represents approximately 40% of national GDP • Is 98% urbanized and has the fastest population growth rate of any province • Has 40% of the total vehicle fleet • Information, communication, value added manufacturing, tourism and technology are the fastest growing sectors in Gauteng. They are all strongly represented along the Gautrain corridor. • The corridor on which Gautrain is proposed is key to sustained economic growth for SA

7. JHB commercial development 1960 JHB commercial development 2001 The impact of Gautrain The land use impact of Gautrain • Opportunity to integrate emerging (market focused) land use nodes • Planning system failing to; reduce urban sprawl, increase densification along dominant corridors and reduce car dependence. • Gautrain offers a new form of attractive access in an ever more congested city. Developers are likely to lock into this.

8. Structural impact on Johannesburg and Tshwane • Johannesburg’s “Vision 2030 … envisages densification along the node and spoke system within the urban boundary, followed by infill strategies. Gautrain [is regarded] as an important initiative and structuring element to the city, providing a fixed axis for growth” (JHB ITP, 2003) • Gautrain will … “provide a pivotal stimulus for economic and social development along Gauteng’s main north-south transport axis” (Tshwane ITP, 2004) • ‘The initiative [is] ‘vital’ and ‘the final major transportation impact to the city’. Gautrain will give the City for the first time, a major fixed access around which to grow, and will have a major impact on the spatial location of industry and residential developments” (JHB ITP, 2003) • Gautrain … “can provide structure around which various TDM measures can be implemented, including park and ride, public transport incentives and partnerships with local employers … The proposed feeder/distributor services … can also be used and can act as local circulatory services around and within development nodes” (JHB ITP, 2003) • Gautrain will enhance accessibility to the major centres in Gauteng and contribute to the; regeneration of the CBD, the strengthening of existing nodes, the efficient use of infrastructure and the creation of new growth areas particularly higher density housing on well located land within this corridor (Tshwane ITP, 2004)

9. The impact of congestion • 7% per annum growth on the M1 cannot be sustained as congestion becomes more severe • Average travel time in Johannesburg has increased from 41.5 minutes in 1995 to 50 minutes in 2003 – 17% over eight years • Congestion is and will impact on Gauteng’s competitiveness as an economic hub • Space for new roads is limited and expensive • Building more roads and encouraging more sprawl is unsustainable and worsens the cycle of car dependence and social exclusion

10. The risks associated with the project • Demand risk: • Extremely difficult to project demand for ‘greenfield’ development projects • Private car users are notoriously bad at leaving their vehicles at home • Optimism bias: • Revenue stream • Capital cost (between 6% and 66%)* • Operating cost * Estimated optimism bias rate suggested by UK Department of Transport, April 2004

11. Demand forecast in comparison to reality Sample of 27 rail projects from around the world, Source: Flyvbjerg, Holm and Buhl, “How accurate are demand forecasts for public works projects”, Journal of American Planning Association, Spring 2005

12. South African land use density and design is not public transport efficient

13. Effective feeder/distributor system required Gautrain PPP workshop, 2002 • Critical to project success and probably the greatest risk • Almost three times as many bus seats as train seats once in operation • Innovative - Involves bus and taxi sector and integrates these modes into the operation of the railway • True integration of the sort proposed will represent the greatest demonstrable benefit of the project

14. Comments on the project appraisal methodology • The project appraisal results (as presented in 2002 and based on travel time savings and operating cost reductions) only just support the price escalation to R 12 billion (2002 Rands) and this is based on a high congestion scenario and does not consider project risk. • The multiplier impact of the project, i.e. in terms of growth to the economy and additional jobs created is generally not included as part of project benefits in international appraisal. These benefits would also be created through other forms of spending, e.g. on housing • Only one option is considered for comparison against the ’do nothing’ alternative. Other possible (less costly) options, such as using diesel trains, slower trains or less construction intensive options, have not been publicly assessed. • The appraisal considers only the initial construction cost against 20 years of project benefits and does not consider the very real likelihood of operating subsidy requirements, particularly in the early years. This could be as much as R70 mill per annum • The appraisal is based on a simplistic 10% sensitivity test instead of more comprehensive risk modeling (QRA) as is common for projects of this size • For a project of this kind, cost and benefit streams could be taken over 30 years (instead of the 20 years currently used in the appraisal)

15. Gautrain as a PPP • High risk project which a major capital injection required from government • Concession: • Infrastructure provision over a 4.5 year construction period, • Integrated multi-modal public transport operations over a 15 year concession term • Government provids a ridership guarantee of 60,000 passengers per day. Approximately 300,000 vehicles use the corridor at present and initial demand is estimated at 104,000 passengers per day. • Apart from initial ridership risk, other project risk is held by the concessionaire • Performance based contract with penalty regime for unacceptable service delivery • Could this model not be effective for improving other parts of the public transport system?

16. Existing public transport as an alternative • Investing in the existing public transport system is an undoubtedly a necessity. However, money for the balance of the system is only one of many challenges to be addressed, others include: • Institutional mandates for control over public transport and other transport infrastructure, • The value of the R6 Billion in subsidy currently spent annually on formal modes of public transport, • The need to reduce or eliminate destructive competition between public transport modes in order to sustain efficiency and effective public transport service, and • Our ability to use the currently operated modes to create a safe, seamless and integrated public transport network.

17. Existing public transport as an alternative • Operational constraints, the age of infrastructure, poor location relative to emerging land uses and safety and security concerns have reduced the demand for current commuter rail services • There may be less of a trade off between Gautrain and existing public transport than we think. • Investing considerable sums in the current system is unlikely to curb car growth or provide significant accessibility to new urban nodes. At current levels of car growth and congestion Government may be forced into a costly road investment programme in order to sustain provincial/national competitiveness. Patronage on SA commuter rail (SARCC Annual Reports)

18. Concluding remarks • The innovative logic of Gautrain is that it will provide the first truly integrated public transport system on the most important economic corridor. The project will be high risk, particularly in the early years. If it works it could show the way for the rest of the public transport system • Gautrain will provide a structural axis in a congested province with the opportunity to provide access to a broad-spectrum of users without catering only to the needs of those with a car • Developing more roads as an alternative use of the funding is clearly unsustainable • The relative benefits in relation to the R12 billion cost would seem to be the greatest area of concern. This coupled with project risks which may only be evident during the operational phase could lead to a higher overall project cost. One option may be to reconsider other options with lower overall costs.