The business model for the Cape Town IRT system is based on successful models used by Bus Rapid Transit systems worldwide. Central to this model is a public-private partnership (PPP) in which most operational components are delivered via the private sector while the municipality is responsible for oversight and quality control.
In this model, private operators provide the day-to-day delivery of public transport services through a concession contract. The full participation of the existing bus and minibus operators is especially important. Operators are compensated for their former public transport services on the basis of pre-determined vehicle-kilometres and a range of performance-based indicators. Instead of operating only when it is profitable to do so (mainly in peak hours) and completing journeys as quickly as possible to transport as many people as possible, as occurs in the existing minibus taxi industry, the BRT operators have incentives to offer a quality service according to a strict schedule with electronic monitoring of each vehicle’s progress along the route.
South Africa law dictates, as does legislation in most countries, that no public transport services may operate without government authority in the form of a permit, a licence or a contract. A process that was initiated in the mid-1990s to formalise and integrate public transport is currently under way. The strategy of this is clear – in future, public transport services will be managed by the local authority and will be permitted where there is demand for them and in a manner that is lawful and regulated.
When the local authority, in this case, the City of Cape Town, establishes an IRT system, it seeks private-sector partners to operate the system. The existing MyCiTI services are operated by companies formed by directly affected bus and minibus taxi operators, and this process is expected to continue as the MyCiTi service unfolds. Those employed in the industry will benefit from formal salaries, health and pension benefits and an improved work environment.
Consultations with the transport operating industry are not only taking place in Cape Town but also in cities with similar projects, including Johannesburg, Port Elizabeth, and Tshwane.