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Presentation to the Transport Portfolio Committee, Parliament, Cape Town, 9th Nov 2005

Gautrain – Can make a Gautrain – Can make a sustainable difference to public sustainable difference to public

transport ?transport ?

Dr Andrew ShawDevelopment Bank of Southern

Africa

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Overview of the presentationOverview 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

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When public transport is not an alternative to When public transport is not an alternative to private car cities end up unable to provide for the private car cities end up unable to provide for the

needs of the public transport dependentneeds of the public transport dependent

Public transport declines

Congestion

Social exclusion:

Non-car users marginalised

Adapted from European Conference of Ministers of Transport, 2001

More traffic

Traditional public transport centers atrophyNew Roads

• Suburban sprawl• Retail parks• Dispersed office parks• Motorways define

location advantage

New car centered mobility sites

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Drivers of efficiency in public Drivers of efficiency in public transporttransport

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

Tow

nshi

p to

CBD

Gau

train

Performs well Performs poorly

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Gauteng in a global contextGauteng in a global contextTokyo 26.4

Mexico City 18.1

Mumbai 18.1

Sao Paulo 17.8

New York 16.6

Lagos 13.4

Los Angeles 13.1

Calcutta 12.9

Shanghai 12.9

Buenos Aires 12.6

Dhaka 12.3

Karachi 11.8

Delhi 11.7

Jakarta 11.0

Osaka 11.0

Metro Manila 10.9

Beijing 10.8

Rio de Janeiro 10.6

Cairo 10.6

Seoul 9.9

Paris 9.6

Istanbul 9.5

Moscow 9.3

Tainjin 9.2

Gauteng 8.5

London 7.6

Lima 7.4

2000 Population (Mill)

Tokyo ● 26.4

Mumbai ● 23.6

Lagos 20.2

Sao Paulo ● 19.7

Mexico City ● 18.7

Dhaka ● 18.4

New York ● 17.2

Karachi ● 16.6

Calcutta ● 15.6

Jakarta ● 15.3

Delhi ● 15.1

Los Angeles ● 13.9

Metro Manila ● 13.9

Buenos Aires ● 13.7

Shanghai ● 13.7

Cairo ● 12.7

Beijing ● 11.5

Rio de Janeiro ● 11.5

Osaka ● 11.0

Tianjin ● 10.0

Seoul ● 9.9

Paris ● 9.7

Hyderabad ● 9.4

Moscow ● 9.4

Gauteng ● 9.3

Bangkok ● 9.0

Lima ● 8.8

2010 Population (Mill)

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

Developing citiesRail extension proposals

Metro system under construction

Extension of light rail system

Recently constructed Skytrain

Source : UN, Light Rail Transit Association and websites of individual cities

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

Additional network segments being constructed

Short 10km metro system to be extended

● Rail transit available

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Gauteng as an urban conurbationGauteng 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

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The land use impact of GautrainThe 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.JHB commercial development 1960 JHB commercial development 2001 The impact of Gautrain

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Structural impact on Johannesburg and Structural impact on Johannesburg and TshwaneTshwane

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)

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The impact of congestionThe 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

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The risks associated with the projectThe 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

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Demand forecast in comparison to realityDemand 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

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

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Effective feeder/distributor system Effective feeder/distributor system requiredrequired

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

Gautrain PPP workshop, 2002

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Comments on the project appraisal Comments on the project appraisal methodologymethodology

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)

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Gautrain as a PPPGautrain 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?

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Existing public transport as an Existing public transport as an alternativealternative

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.

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Existing public transport as an Existing public transport as an alternativealternative

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.

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Patronage on SA commuter rail (SARCC Annual Reports)

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Concluding remarksConcluding 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.