Ekurhuleni Harambee Bus Rapid Transit (Brt) Project
Ekurhuleni Harambee Bus Rapid Transit (Brt) Project

 

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.

APPROACH

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
 
  
EKURHULENI BRT TOTAL SYSTEM SPECIFIC INDICATORS
ANTICIPATED RESULTS
Project NPV
R44 165 million
Benefit to cost ratio
3.3
Journey time savings (passenger hours per day)
51 125 by 2021
105 902 by 2031
Journey time savings
R4.23 billion over 20 years
CONSTRUCTION PHASE
 
Impact on production
Total economy – R12.5 billion
Indirect impact – R4.2 billion
Impact on GDP during construction
Direct impact on GDP during construction
R4.3 billion
R1.8 billion
Total number of job opportunities created during construction
Direct employment opportunities created during construction
21 177
4 742
Households impacted during construction due to employment
4 742
Impact on household income during construction
R1.1 billion
OPERATION PHASE
 
Impact on national economy during operation
R757.9 million per annum
Impact on GDP
R795.8 million per annum
Direct impact on household income
R344.8 million per annum
Number of new direct jobs created during operation
731
Number of new jobs in the economy
4,154
Source: Economic Evaluation report by Goba and Mott MacDonald, 2012
 

 In addition, the following benefits will be achieved:
•     Improved quality of life through an efficient, safe and affordable transport system
•     Empowerment, skills development and local economic development (KTVR is 100% owned by a Trust whose beneficiaries are the affected taxi and bus operators on the planned BRT routes)
•     Phase 1 number of direct jobs created and/or retained (including bus drivers): 588
•     Phase 1 number of taxi drivers retained and reskilled: 357
•     Increase in the number of commuters using buses at system full capacity: 76 424 passengers per day
•     Corporatisation of the taxi industry and bus operations.

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