Category: Land Transport Survey

#184 Cheap subsidies are expensive for dignified public transport

“Everyone has inherent dignity and the right to have their dignity respected and protected.”

— Constitution of the Republic of South Africa

What is transport dignity? I’m not sure, but here’s a hypothesis: a dignified public transport service is one that affords people the opportunity to access services, places and people within a reasonable service quality; time; price for users; and cost for operators. It could be a transportation system that is in fact a system through which one may traverse space and time frequently for the constitutionally essential purposes initially. As time progresses, and more people commute, there is a high probability that more subsidies can be provided for extreme cases; and fewer subsidies for the most viable cases. However, dignity is so challenging to put our finger on. 

After presenting her case on Just Transport at a TEDx Talk, ‘The Barefoot Facilitator’ presented a deeply intact career between creating engaging spaces for various participants to share and reflect; a broad network she’s willing to share; and technical empirical support from Future Transport Consulting and the Council for Scientific and Industrial Research (CSIR). This is the team behind a broad bottom-up and evidence based approach to formulating an inclusive Public Transport Strategy. In principle the true value of public transport requires deeper reflection, analysis and accounting (social and financial). However, engaging stakeholders from the public transport industry (operators, officials, researchers, practitioners) purports and explorative approach to participatory policy making. 

Fighting an artificial policy in contemporary South African transport 

The session started with some ground rules, but I came in later, and deep dived into a few thematic areas around and about public transport subsidies: are public transport a constitutional right or a requisite for the realisation of constitutional rights? The line is so thin, but the precedent is there: access to education is a right and the framework underpinning the Learner Transport Strategy includes enabling the realisation of this right. There is no explicit statement that people have the right to transport; instead we have the right to freedom of movement, access to adequate shelter, and basic education (access to shelter and higher education are largely within the confines of ‘reasonable means’ through government action). 

CAVEAT: Here is the role of pressure groups: Equal Education fought for the right to education through the provision of bus services as outlined in KwaZulu Natal, the won the case, learners now have buses. But without their efforts, would anything have happened? Probably not because the heart of the issue was institutionally between the Department of Basic Education and the Department of Transport — neither had a clear position on who should provide scholar transport, thus access to education. Here the issue is beyond a constitutional debate about the right to education, but rather the institutional needs to enable its implementation.

Beyond this point, it became clear to me that there is a need to reflect on the relationship between mobility and access in a country which has a historical predisposition toward seeking freedom. The historical overview of how transport policy evolved gleaned over the Levies Act which ensured a labour oriented transport subsidy; the South African Transport Services Act; after the deregulation of road transport which lead to the proliferation of minibus taxi vehicles as public transport. This historical context did not, however reveal the tensions between mobility and access directly— instead it highlighted the spatially segregative narrative which informed the nature of inefficient public transport provision within what Malcolm Mitchell called an “artificial policy”.

The right of mobility?

The tension space between mobility and access is significant for transport policy design and implementation. Policy design involves the specific parameters that can be measured, tested and evaluated by agencies and the general public. Implementation involves the financing, bureaucracy, systems, practices and institutions which distribute the subsidy across the various recipients. Today, integrated public transport networks are inclusive of non-motorised transport at a policy level. Furthermore, the cost of subsidising public transport seems to be part of a complex debate around whether public sector can afford to continue to subsidise; while some argue that certain modes are subsidised more than others like the Gautrain as “for the rich”, while Metrorail is “for the poor”. Meanwhile, at the stakeholder engagement it was quite clear that most commuters use minibus taxis to commute, and this will be a new space for government intervention.

“Mobility is not an easy concept to define. In ordinary parlance it usually refers to the ease with which a person can move about or the amount of movement he performs. But what is important is not movement as such; it is access to people and facilities. Access, not movement, is the true aim of transport. One may have access to facilities without moving much at all. An immobile person may have water and gas at the flick of a switch, have his refuse collected, receive calls from his doctor, and deliveries from the shops, be informed and entertained by wireless television, talk to his friends on the telephone, all without stirring from his house. In a well endowed town a person may have access to a vast range of facilities with very little travelling. While possibly less mobile in the ordinary sense of the word than someone who travels greater distances to work, school and recreation or to visit friends, he may nevertheless be better placed, since the act of travel, with the time, cost and personal effort involved, is something which he usually would prefer to avoid.”— Gerald Houseman, The Right of Mobility, 1979. Kinnikat Press.

The right kind of subsidy

In the Fiscal Financial Commission’s presented a user-based subsidy option which is inclusive of all modes and is embedded in the social grant system in order to realise a framework within a premise that “the transport policy does not envisage subsidies as simply a financial relief mechanism, but as an instrument for sustainably transforming the public transport system in the country”. Moving beyond the R 17bn subsidy bill in their 2012 report, they propose a subsidy framework which leans closer to R50bn, and serves more people; incentivises improved operations; and may be used to reduce the environmental impact of transport through induced modal shifts. A figure on the table during the engagement was that South Africa is wasting something close to R 250bn on passenger transport inefficiencies (time, cost etc.), and this excludes the R 140bn or so cost of road accidents. This suggests that there is a need to invest much more in public transport than ever before. The 80km Gautrain contributed R24bn to Gauteng’s economy and boosted property values significantly between inception and evaluation read a KPMG report in 2015. With the R110bn, 149km expansion in the pipeline, the project is expected to contribute R5bn during the construction phase and R12.44bn of economic value added on a typical year of operations, plus significant returns in the property impacts and other immeasurable changes in the mobility and access context. 

“Bus rapid transit (BRT) systems received between R11.76 and R15.12. The operating subsidy for Metrorail was R3.73 per passenger per trip, and R60.30 for the Gautrain, which she regarded as “a huge subsidy”. The Gautrain, however, recovered 57% of its costs through the fare box, with Metrorail at 39%, BRTs at between 28% and 44%, conventional bus systems between 31% and 44% and municipal bus systems between 13% and 31%.”— Irma Venter interviewing Malijeng Ngqaleni in 2016 for Engineering News

Considering the quote above, analysing public spending in transport requires a deeper elixir: subsidies per passenger trip are a limited view when they exclude distances or benefit/value per passenger trip; cost recovery from ticket sales is quite limiting because land-use value added, income from property etc. are key dimensions for evaluation too. Particularly given the fact that passenger volumes for Metrorail are plummeting at a rate faster than operating costs could keep up with— while subsidies remain almost constant, and Autopax lost R344m this year— thus barely doing well. The right kind of subsidy might be user based, and that is well placed; but it might also need to lean in on the broader economic value of public transport infrastructure, systems and services attached directly and indirectly to the sector. 

Dignified public transport

Lastly, it is important to question the scope of subsidisation because this influences the cost, benefits and value propositions emerging from the effort, service offering, and monitoring. In a previous note about Rustenburg Rapid Transport (RRT), the position presented was that integrated transport networks require insitutional networks too. In this instance, the policy conversation last week brought in a vast array of questions, more than answers. For one is the issue of essentialisation: is public transport an essential service and if so does it imply professionalisation will take place in a justified framework? Another: what kind of funding are we talking about— narrow to specific segments in society; or wide for the broad service and infrastructure networks? Then again: dignity— how is it measured when most commuters are dissatisfied with the alternative they do have? Who is responsible for enforcing and observing its realisation? How will the bill be financed when there are other pressing allocations aimed at saving SoE’s haunt the fiscus? Consider the commotion around Metrorail’s deterioration and surrounding anarchy; or the minibus taxi industry’s innovative spirit and violent fabric; or new technologies’ arrogant entry and value added to the user experience; or even the need to implement and the slow pace of devolving functions. How is dignity defined when commuters can be held hostage in a labour dispute? How can dignity be appraised when dissatisfaction is a perpetual norm? Is it dignified to be stuck in traffic on highways without any other alternatives— maybe. In order to serve, we must know the purpose of this service, without this purpose the questions we ask will limit the scope of work and effort associated with it. However the question is whether the public transport subsidy policy will be a distributive or a redistributive policy— this I can only imagine. 

CAVEAT— The Gauteng Freeway Improvement Project (GFIP), is more popular for “eTolls” than for a revenue generation solution for the Gauteng Province and entrepreneurs who stand to benefit from participating (i.e. construction, consulting, service and transport). Increasing the potential for public sector to raise revenue beyond “taxes” and “levies” is an important part of the critical path toward investing distributive and redistributive policies. Perhaps let me draw on the difference, briefly. Distributive policies are associated with providing public goods, however these are shared goods for all, or specific groups in society. Redistributive policies are a bit more complex.

 “Redistributive policies involve deliberate efforts by the government to shift the allocation of wealth, income, property, or rights among broad classes or groups of the population, such as the haves and have-nots, proletariat and bourgeoisie.”— James E. Anderson, Public Policymaking

This allocation process is important because while roadways are shared, common for all, why must some be paid for explicitly through a “user-pay” principle? Largely because most roads are public goods built from shared expenses, while others are not. On the other hand, public transport should be a viable alternative for most households, even if they own cars. As such, building high quality public transport services tends to be expensive, although valuable. Funding public transport directly from “taxes” and “levies” is one thing, but finding other options will add value, improve our financial position and propel a new narrative for regional development.