27.ity of Johannesburg 27.2 Council

Transcription

1 27.ity of Johannesburg 27.1 Council AMENDMENT OF THE TARIFF FARE CHARGES FOR BRT REA VAYA FOR THE PERIOD 1 JULY 2016 TO 30 JUNE STRATEGIC THRUST A resilient, livable, sustainable urban environment underpinned by infrastructure supportive of a low carbon economy. 2 OBJECTIVE To obtain approval for the amendments to the current tariff charges for BRT Rea Vaya fares for the period 1 July 2016 to 30 June BACKGROUND ON REA VAYA FARE STRUCTURE Rea Vaya BRT s current fare structure is distance based, which was approved by Council in The Euro, Mastercard and Visa (EMV) Automated Fare Collection (AFC) system was launched in July 2013, which replaced the paper ticket fare collection system. Off peak discounts were introduced in the 2013/14 financial year. In the 2014/15 financial year, fare products were implemented which entitled passengers who travelled from the same points each day to get a discount. These products did not work well due to the rigidity as station staff had to select the origin and destination and passengers were not allowed to travel outside the selected routes without incurring penalties. The system did not work well and was discontinued at the end of that year. In this year, a concession for people over the age of 65 was also agreed to in the tariff report bus was not implemented due to the high cost of doing so and the potential of abuse. Over the last two years, the Department has also raised issues about the appropriateness of the fare policy. The main objectives, constrains and requirements of the current fare policy are as per the summary below. The main objectives of the Rea Vaya fare policy are: To provide an affordable service to Rea Vaya customers by promoting brand loyalty, affordable and equitable fares, and responding to passenger needs; To increase mobility and accessibility by ensuring City wide coverage and making special fares possible for selected groups of different times of the day, types of services such of events and minimize inconvenience such as transfers; and To reduce the number of loads done on EMV and have more customers load products.

2 27.ity of Johannesburg 27.2 Council The constraints and requirements of the Rea Vaya fare policy are: Equity: the fare paid must be related to the value of the public transport service purchased; Social and political requirements: the fare determined must take into account the ability to pay, the need for service and the need to address apartheid s spatial legacy; Elasticity of demand: the willingness to use the service at a given fare level, which can constraint choices of fare level and structure; Customer friendly: the fare system needs to be understandable and convenient to passengers, and Corruption and fare evasion: the fare system must increase the ease and reduce the cost of collecting while ensuring adequate controls are in place to prevent corruption and fare evasion. Rea Vaya is currently operating a distance based fare structure. The fare is fixed at a constant level for a specific travel distance band and the total fare cost for a particular journey will be the price charged for the distance band into which the journey falls. The fare increases as the distances increase until the defined maximum fare is reached at which point it becomes a flat fare. One of the issues raised was whether this distance based fare structure is appropriate for the citizens of Joburg and work on this change in fare policy continues to be done. However for the 2016/17 financial year, the focus will be on the harmonization of Metrobus and Rea Vaya fares. The Rea Vaya BRT s current approved 2015/2016 tariffs are detailed below: (1) Non Frequent users, including penalty fees For the purpose of this report, non-frequent users are regarded as users that do not make use of the frequent Rea Vaya fare products, i.e. point system solution. The nonfrequent fares are split into peak and off peak rates. The current fares are depicted in Table 1 below: Table 1: Current approved 2015/16 non-frequent fares Rea Vaya Journey Length 2015/16 Approved Fares Peak Fares Off Peak Fares Less than 5 km (Minimum Fare) R5.80 R5.20 More than 5 km but less than and equals to 10 km R7.60 R6.80 More than 10 km but less than and equals to 15 km R9.50 R8.50 More than 15 km but less than and equals to 25 km R11.30 R10.20 More the 25 km but less than 35 km R12.20 R11.00 More than 35 km (Maximum fare) R13.30 R12.00 Penalty Fees R13.30 R12.00

3 27.ity of Johannesburg 27.3 Council It should be noted that the above mentioned fees do not include the loading fee as provided for in the Banking Service Agreement with ABSA. The loading fee is charged at 2.5% of the loaded amount with a minimum fee of R1.50 per load. With the introduction of a travel package, the Rea Vaya Easy Go as discussed below, Rea Vaya passengers will not incur this loading fee should they decide to make use of the travel package. (2) Fare media and other charges The approved card fees for the occasional users, the Euro Master and Visa (EMV) cards and the penalties are as per the table below: Table 2: Approved 2015/16 fare media and other charges Details Peak pricing Off-peak pricing Occasional users one trip card R13.80 N/A Occasional users two trip card R26.50 N/A EMV card (new user) Free N/A EMV card (replacement) R25.00 N/A Concession card (new user) Free N/A Concession card (replacement) R25.00 N/A Penalty fees for fare evation R13.25 R12.00 Penalty fees from inspection R21.20 N/A (3) Trips undertaken with Rea Vaya Go Easy travel package (frequent users) It was proposed that 2014/15 transit products, i.e. RV10 and RV40 be replaced by a new point product in 2015/16, which offers passengers with additional value load when they load more than R50. The RV10 and RV40 products were very restrictive as it only allowed for passengers to travel between pre-selected origin and destination stops, which resulted in penalties for passengers who wanted to travel from/to another origin/destination. With this new product, passengers are not required to pre-select their origin and destination and will be able to travel between any two stops and or stations. The new Rea Vaya point s product is called the Rea Vaya Go Easy and has the same value as South African Rands. The only difference however is that this money can only be used for travel on Rea Vaya. Passengers receive discounts (extra value) on loading that they can use on traveling Rea Vaya. This product offers passengers extra value based on how much they load.

4 27.ity of Johannesburg 27.4 Council Table 3: Proposed 2015/16 Rea Vaya Go Easy Rea Vaya Passenger Load Values Additional Bonus Additional Bonus Value Percentage From R10 R50 0 R0 From R51 R100 10% From R5.10 R10.00 From R101 R200 15% From R15.20 R30.00 From R201 R300 20% From R40.20 R60.00 From R301 R700 25% From R75.30 R Although this new Rea Vaya Go Easy product was approved as part of Rea Vaya s 2015/16 tariffs, it was not available from 1 October 2015 as stipulated in the 2015/16 tariff report. This was due to the lengthy development and testing required, i.e. factory acceptance testing as well as systems acceptance testing and the need to ensured proper controls are in place before the system goes live. 4 PROPOSED FARE CHARGES FOR 2016/17 (1) Proposed 2016/17 tariff considerations It is proposed that the Rea Vaya tariffs for the 2016/17 financial year increase by 6% as per the budget principles agreed at the Mayoral Budget Lekgotla. This agreement was based on the assumption of an estimated Consumer Price Index (CPI) of 6% for the 2016/17 financial year as well as striving to achieve an optimum balance between operational sustainability and user affordability. The following were therefore considered in terms of the Rea Vaya 2016/17 tariffs determinations: Social The ability of passengers to afford the Rea Vaya services, promotion of access to Rea Vaya, cross subsidisation of the poor where necessary and feasible, and the simplicity to implement the Rea Vaya tariff structure. Economic Competitiveness of the Rea Vaya tariffs against other modes of public transport such as taxi fares in support of macroeconomic policies of the country. Financial The increases in the direct bus operating cost as set out in the escalation provisions in the Council approved Phase 1A and 1B Bus Operating Company Agreements are used as the basis for the proposed tariff increases.

5 27.ity of Johannesburg 27.5 Council These proposals are therefore cost reflective tariffs, which are the cost of providing the Rea Vaya services and linked to the medium term financial framework. The proposed tariffs are discussed in more detail below: (2) Trips undertaken from EMV loads (non-frequent users) It is proposed that the 2016/17 fares for trips undertaken from EMV loads for both peak and off peak be increased by 6%. Different fares are applicable in the peak and offpeak depending when the trip started. The off-peak cash fares are lower than the peak fares to encourage Rea Vaya passengers to travel in the off-peak rather than at peak so as to reduce the peak fleet requirements, improve total system operations and reduce operational costs. The proposed peak fares and off peak fares are depicted in Table 4 below. Table 4: Proposed 2016/17 peak and off-peak fares for trips undertaken from EMV loads Rea Vaya Journey Length 2016/17 Proposed Fares Peak Fares Off Peak Fares Less than 5 km (Minimum Fare) R6.20 R5.50 More than 5 km but less than and equals to 10 km R8.10 R7.20 More than 10 km but less than and equals to 15 km R10.10 R9.00 More than 15 km but less than and equals to 25 km R12.00 R10.80 More the 25 km but less than 35 km R12.90 R11.70 More than 35 km (Maximum fare) R14.10 R12.70 Penalty Fees R14.10 R12.70 (3) Trips undertaken with Rea Vaya Go Easy travel package (frequent users) As with the trips undertaken with EMV loads (non-frequent users), the trips undertaken with a Rea Vaya Go Easy travel package are fares in bands of distance for trips that begin in the peak, and lower fares for trips beginning in the off-peak period. Passengers however will get a discount if they load on the purchase of a Rea Vaya Easy Go package and the higher the load, the higher the discount. This is intended to encourage bulk purchase and frequent use of the system as well as purchasing the Rea Vaya Go Easy travel packages as opposed to loading cash.

6 27.ity of Johannesburg 27.6 Council The proposed discounts are depicted in table 5 below. Table 5: Proposed 2016/17 Rea Vaya Go Easy travel package Rea Vaya Passenger Load Values Additional Bonus Additional Bonus Value Percentage From R10 R50 0 R0 From R51 R100 5% From R2.60 R5.00 From R101 R % From R7.60 R15.00 From R201 R300 10% From R20.10 R30.00 From R301 R % From R37.60 R87.50 (4) Fare media and other charges The proposed 2016/17 charges for fare media, occasional trip cards and penalties were increased by 6% and are as per table 6 below. Table 6: Proposed 2016/17 fare media and other charges Details Peak pricing Off-peak pricing Occasional users one trip card R14.60 N/A Occasional users two trip card R29.20 N/A EMV card (new user) Free N/A EMV card (replacement) R26.50 N/A Concession card (new user) Free N/A Concession card (replacement) R26.50 N/A Penalty fees for fare evation R14.10 R12.70 Penalty fees from inspection R24.00 R POLICY IMPLICATIONS Proposed increase in fares for the 2016/17 financial year to be implemented from 1 July LEGAL AND/OR CONSTITUTIONAL IMPLICATIONS When the City intends to amend the tariff, it must inform the Public about its intention to amend so that it may take the comments of the public into account. 7 FINANCIAL IMPLICATIONS The expected revenue to be generated from the 2016/2017 Rea Vaya proposed fares is R

7 27.ity of Johannesburg 27.7 Council COMMUNICATIONS IMPLICATIONS The relevant information regarding the 2016/2017 Rea Vaya tariffs as determined will be communicated to all role players in the manner as prescribed by law. In addition, commuters will be consulted on the proposed tariff increases during the IDP consultation process and a passenger information campaign will be embarked upon to ensure that passengers are informed timeously about the proposed fare increases. 9 OTHER DEPARTMENTS / BODIES CONSULTED Finance Department. IT IS RECOMMENDED 1That in terms of Sections 11(3)(i) and 75A (1) of the Local Government : Municipal Systems Act 2000, (Act 32 of 2000) as amended, read with Section 16(2) of the Local Government : Municipal Finance Management Act, 2003 (Act 56 of 2003), the City of Johannesburg declares its intention to maintain the current Rea Vaya fare structure and the current Rea Vaya Fares as approved by Maycom and propose additional fares with effect from 1 July 2016 as set out in Annexure A hereto, 2That, in terms of Sections 17(3)(a)(ii) and 22(a)(i) and (ii) of the Local Government : Municipal Finance Management Act, 2003 (Act 56 of 2003) and Sections 21, 21A(1) and 2 of the Local Government : Municipal Systems Act, 2000 (Act 32 of 2000) as amended, the City of Johannesburg: (1)displays the notice and the documents and notice in the manner prescribed; (2)seeks to convey to the local community by means of radio broadcasts covering the area of the City, the information contemplated in Section 21A(c) of the Local Government : Municipal Systems Act, 2000 (Act 32 of 2000) as amended; and (3)publishes a notice in the manner prescribed and invites the local community to submit written comments or representatives in respect of the City s declared intention to amend or determine Tariffs of Charges. 3That in terms of Section 22(b)(i) and (ii) of the Local Government : Municipal Finance Management Act, 2003 (Act 56 of 2003) a copy of the notice and documents be sent forthwith to the National and Provincial Treasury; MEC for local government; as well as any other organ of the state or municipality affected by the budget to solicit their views. 4That the Executive Director: Finance in conjunction with Group Head : Legal and Contracts, in consultation with the Council s relevant Departments and all interested parties, report on the comments received in terms of Paragraph 2 above with recommendations on the final drafts of the Tariffs of Charges for approval. () (Brendan Petersen)

8 27.ity of Johannesburg 27.8 Council (Tel. (011) ) (tc) THE NEXT ITEM FOLLOWS THE ANNEXURE TO THIS ITEM

9 27.ity of Johannesburg 27.9 Council ANNEXURE A CITY OF JOHANNESBURG AMENDMENT OF TARIFF OF CHARGES FOR REA VAYA BRT FARES In terms of Sections 17(3)(a)(ii) and 22(a)(i) and (ii) of the Local Government: Municipal Finance Management Act, 2003 (Act 56 of 2003) and Sections 21(1) and (3), 21A and 75A(3) and (4) of the Local Government: Municipal Systems Act, 2000 (Act 32 of 2000) as amended, it is hereby notified that the City of Johannesburg has, in terms of Sections 11(3)(i) and 75A(1) and (2) of the Local Government: Municipal Systems Act, 2000 (Act 32 of 2000) as amended, read with Section 24(2)(c)(ii) of the Local Government: Municipal Financial Management Act, 2003 (Act 56 of 2003), amended its Tariff of Charges for Rea Vaya BRT Fares with effect after 1 July The following fares will apply: Proposed 2016/17 tariffs It is proposed that the Rea Vaya tariffs be increased by 6% for the 2016/2017 financial year as per the City s CPI projections for the 2016/2017 financial year. The proposed tariffs are discussed in more detail below: 1. Trips undertaken from EMV loads (non-frequent users) It is proposed that the 2015/16 non-frequent fares for both peak and off peak be increased by 6%. The proposed peak fares and off peak fares are depicted in Table 1 and Table 2 respectively below. Table 1: Proposed 2016/17 non-frequent peak fares Non-Frequent Peak Fares Rea Vaya Journey Length Current 2015/16 approved fares Proposed 2016/17 fares Less than 5km (Minimum Fare) R 5.80 R 6.20 More than 5km but less than and equals to 10km R 7.60 R 8.10 More than 10km but less than and equals to 15km R 9.50 R More than 15km but less than and equals to 25km R R More the 25km but less than 35km R R More than 35km (Maximum fare) R R Penalty Fees R R Table 2: Proposed 2016/17 non-frequent off peak fares

10 27.ity of Johannesburg Council Non-Frequent Off Peak Fares Rea Vaya Journey Length Current 2015/16 approved fares Proposed 2016/17 Fares Less than 5km (Minimum Fare) R 5.00 R 5.50 More than 5km but less than and equals to 10km R 6.50 R 7.20 More than 10km but less than and equals to 15km R 8.10 R 9.00 More than 15km but less than and equals to 25km R 9.60 R More the 25km but less than 35km R R More than 35km (Maximum fare) R R Penalty Fees R R Trips undertaken with Rea Vaya Go Easy travel package (frequent users) The proposed discounts for the Rea Vaya Go Easy travel package Table 3: Proposed 2016/17 Rea Vaya Go Easy travel package Rea Vaya Passenger Load Values Additional Bonus Additional Bonus Value Percentage From R10 R50 0 R0 From R51 R100 5% From R2.60 R5.00 From R101 R % From R7.60 R15.00 From R201 R300 10% From R20.10 R30.00 From R301 R % From R37.60 R Fare media and other charges Table 6: Proposed 2016/17 fare media and other charges Details Peak pricing Off-peak pricing Occasional users one trip card R14.60 N/A Occasional users two trip card R29.20 N/A EMV card (new user) Free N/A EMV card (replacement) R26.50 N/A Concession card (new user) Free N/A Concession card (replacement) R26.50 N/A Penalty fees for fare evation R14.10 R12.70 Penalty fees from inspection R24.00 R24.00