The Ekurhuleni Public Transport Industry agreed to partner with Ekurhuleni Metropolitan Municipality (EMM) via a memorandum of agreement (MOA) to be the operators of the EMM Integrated Rapid Public Transport Network (IRPTN) to provide Bus Rapid Transit (BRT) transport services through a special purpose vehicle, KTVR Bus Service (KTVR).
In March 2017, the newly established EMM bus operator, KTVR, signed a R842 million, 11-year loan agreement with the DBSA to fund the purchase of 210 buses required for the first phase of the Ekurhuleni Harambee BRT project.
The DBSA’s funding was committed into a ring-fenced project finance structure, in which KTVR receives a minimum contracted bus service fee from EMM for the provision of the services (on a take-or-pay contract basis) to cover fixed (including debt service) and variable costs, in a typical public-private partnership. This funding is an example of the key role the DBSA plays in assisting municipalities establish efficient and effective passenger transport systems through various funding mechanisms. The DBSA was awarded the 2017 Africa investor (Ai) Social Infrastructure Deal of Year award for not only the financial aspect and structuring of the deal, but also for how the infrastructure programme delivers positive impact on the local community, both social and economic, consultation with key stakeholders, and consideration of sustainable development and environmental concerns.
The foundation of the name KTVR Bus Service emanates from the abbreviation KTVR (Kempton-Tembisa-Vosloorus-Rieger Park) which at the time of naming represented the names of areas in which the BRT will be operating. The Phase 1 Harambee BRT system, with a 56 km trunk route and 71.4 km complementary route, is made up of 3 sections, with the main route of the IRPTN running from Tembisa in the north via Kempton Park, OR Tambo International Airport and Boksburg, to Vosloorus in the south.
OBJECTIVE BEING ADDRESSED
The Harambee BRT system aims to connect the areas that make up Ekurhuleni, including Benoni, Germiston, Springs, Kempton Park, Edenvale, Nigel, Brakpan, Boksburg and Alberton in a bid to overcome the problems of historic spatial planning, allowing residents an effortless and affordable commute. The project is aimed at redressing past inequalities and create socio-economic upliftment by addressing the following:
• Lack of an integrated transport system in the city and safety, reliability, affordability and convenience concerns about the existing transport system
• The historical spatial planning where the poor typically lived furthest from work. The city has over 3 million citizens, with 65% of the citizens being previously disadvantaged people and living in remote townships, far from their places of work
• Longer travel times due to increasing congestion and difficult transfers
• Inaccessibility of public transport for people with disabilities, the aged and the frail
• Inadequate historical investment in public transport, which has meant that both existing infrastructure and fleet are in a poor condition.
EMM will roll out the buses in phases - the buses will be procured and delivered based on a staged roll out of the IRPTN, i.e. Phase 1A, 1B, and 1C.over two years. Ownership of the buses vests in KTVR, which will procure the buses and
will charge a user fee on a take-or-pay basis using a fee per kilometre payment system that guarantees a minimum number of kilometres to cover debt services, all operating costs and a profit element. The take-or-pay model provides for sustainability to KTVR and ensures debt servicing.
Through a dedicated trust, the beneficial shareholders of the KTVR are taxi and bus operators, on routes currently serviced by private buses and taxis, known as Affected Operators, through shareholding equivalent to their market share. KTVR is managed as an independent corporate entity, with its own board of directors.
Government support is key to the success of this project as it allows EMM to use a portion of its grant income to cover KTVR initial operating costs and for the construction of the supporting BRT infrastructure. The project has the support and buy-in from the taxi industry as evidenced by signed MOUs between EMM and the various taxi associations in the affected routes. This was achieved through an ongoing long, complex negotiated settlement involving all stakeholders.
Harambee BRT operations map
OUTCOMES AND MEASURABLE IMPACTS
The project will have a significant impact on the socio-economic and economic development of the city and its inhabitants as well as Gauteng as a whole, with the following development impact:
Ekurhuleni Harambee BRT Phase 1 IRPTN system-wide indicators