Municipalities need innovative transport funding tactics

My first radio interview related to access and mobility. This is the promo-shot.

This is a radio interview postmortem.

A few hours ago I was in conversation with a colleague in transport, some listeners and a radio host, Ayabonga Cawe on Power FM 98.7 between 17:00 and 18:00. Among the themes that struck me was the practical capacity that municipalities need to implement (a) unique sources of funding for public transport and (b) the practical ability to do so. This was my first interview on mobility and access issues (actually my 2nd, first was with Mpho Ya Badimo) , and I’d like to reflect on it here — because that’s me. I honestly can not express how the opportunity is appreciated, and just damn-well heartfelt.

The appropriate context for discussion

The conversation of public passenger transport services needs to be viewed within the context of three contexts. First is the National Development Plan’s mandate to facilitate spatial transformation through effective access and mobility solutions, funding and affordable levels of service. This is not only about public passenger transport’s competitive position relative to the car, it is also about encouraging the use of other forms of mobility that are reinforced by changes in land-uses.

Secondly, the Competition Commission Inquiry aims to assess the nature of competitive practices in the public passenger transport sphere, without due consideration to private passenger transport, nor non-motorised transport alternatives. These make up the entire transport system, and according to the act, should be accounted for as part of integrated public transport systems.

Thirdly, managing the demand for travel through controlling certain elements of supply is where the interview was focused, at least in my view. Specifically, some of the major concerns seem to be related to balancing the act between congestion charges, and fuel levies in response to Ghalieb Dawood’s article in the Business Day recently. The piece outlines how fuel levies/taxes and congestion charging may effectively be used to boost public transport investment. My position is that, such revenues need to be collected at local and district municipal levels, and recirculated on the ground — not sucked into the treasury system and redistributed “equitably”. One of the callers, highlighted what I referred to as supply chain cost effects in logistics, and network effects in transport, when he emphasised that congestion charging may encourage rerouting/ratrunning at the cost of settlements suffering from apartheid spatial planning. Although there are potential benefits from charging congestion, but the travel demand effects are short term. Fuel levies have a system wide effect, such that they impact the CPI and this is compounded for every interaction in the value chain. There are other ways to raise funding at municipal level.

The basis upon which funds are raised

The first basis should be to focus specifically on establishing transport components in municipalities, in line with the functions specified in the National Land Transport Act №5 of 2009 (as amended). This is a statutory issue, not a traditional business mandate. Furthermore, transport functions need to be devolved — and the appropriate and commensurate budgets related to be allocated (conditionally) for the establishment of such functions. In this way, municipalities have the teeth to finance, influence, develop, manage, implement and monitor transport plans and related activities. Metropolitan areas tend to struggle themselves with certain transport problems particularly because the transport components are not effectively developed or appropriately capacitated in an integrated fashion. Without too much comment there, small, large and medium towns suffer the worst from the lack of such components, and the “equitable share” distributed by the National Treasury is not necessary commensurate to the development needs there. Within this context, municipalities can raise funds for integrated public transport networks as proposed by Integrated Transport Plans. So the development of an IPTN, is not limited to the municipality alone, it is a system wide effort to ensure the provision of such networks and appropriate planning for respective jurisdiction within the context of realising an Integrated Urban and Rural Development program.

How municipalities can raise funds for public transport

To the heart of the interview: money. There are certainly alternatives to raising funds to support public passenger transport network development. The planning side should be funded by the municipality. The development and implementation side should be a Public Private Partnership between the municipality in question, the local community, and private sector in the form of operators and other entities. Funding under the PPP environment would largely be focused on the following key themes:

  1. Capturing land values through transit oriented development and leveraging on property incentives to develop specific areas.
  2. Expanding the revenue basis of public and non-motorised transport operators (i.e. bike sharing) through rental income, advertising, and user taxation.
  3. Investing in calming traffic and pedestrianising precincts such that local areas develop at street level, not as shopping compounds (i.e. malls), because this encourages foot traffic and more eyes on the street.
  4. Communities need to have a voice in warranting certain access and mobility interventions in their local areas in a timely and effective manner. They can also be encouraged to fund these interventions through an increase in one or more of the levies paid in the local area.
  5. Support the above with dedicated busways (not bus lanes we see in SA’s BRTs) for public passenger transport, integrated non-motorised transport networks and fully integrated information systems.
  6. At the spine of the above are the city and town logistics that keeps retail and other activity centers full of stock and ensure the direct delivery/collection of goods and services to consumers.
  7. Lastly, municipalities need room to innovate and experiment with new technology, branding, service design and research avenues that may not necessarily be as costly as Integrated Transport Planning, but may allow more knowledge and understanding.

Important allocations that need to be made in short, medium and long term contexts are clearly not obvious on the macro level. However, effective Integrated Transport Planning processes could encourage innovative approaches to raising funds, on the ground — within waiting for allocations to trickle down. I’m speaking specifically about and for local municipalities with less than 400 000 inhabitants. We need an urgent shift in our best practice from a supply chain and procurement side; and from the level of managing travel demand and supply with the appropriate funding tactics, plans and implementation capacities. Hence the establishment of effective transport components are at the heart of any agent of change in transport planning and practice.


Thank you so much for reading! Let me know your views,critiques and ideas on this issue.

Find me on Twitter and LinkedIn and may we develop effective transportation services that add real value.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s