58.1
City of Johannesburg Council 2014-03-26
COJ : MAYORAL COMMITTEE 2014-03-20
TRANSPORT
58
AMENDMENT OF THE TARIFF FARE
CHARGES FOR REA VAYA REA BRT
FOR THE PERIOD 1 JULY 2014 TO
30 JUNE 2015
1
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 Rea Vaya BRT
fares for the period 1 July 2014 to 30 June 2015.
3
BACKGROUND ON REA VAYA FARE STRUCTURE
The Rea Vaya BRT has currently implemented a distance based fare structure, which
was approved by Council in 2011. It also launched the Automated Fare Collection
(AFC) system during the last quarter of the 2012/2013 financial year. The approved
fares for the 2013/2014 financial year for this distance based fare structure were as
per the table below:
(1)
APPROVED REA VAYA FARES 2013/2014 FINANCIAL YEAR
Table 1: Approved Rea Vaya Fare Structure
Rea Vaya Journey Length
Less than 5 km (Minimum Fare)
More than 5 km but less than and equals to
10 km
More than 10 km but less than and equals to
15 km
More than 15 km but less than and equals to
25 km
More than 25 km but less than and equals to
35 km
More than 35 km (Maximum fare)
Approved Travel Fares Per
Trip (2013/14)
R5.50
R7.20
R9.00
R10.70
R12.50
R14.20
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City of Johannesburg Council 2014-03-26
COJ : MAYORAL COMMITTEE 2014-03-20
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Other products and services approved during the 2013/2014 tariff report:
Table 2: Current Rea Vaya Fare Structure and Product Prices
Other Rea Vaya Services and Products
Approved Price (2013/14)
EMV Card
R20.00
Occasional Users – One Trip
R25.00
Occasional Users – Two Trip
R37.00
Penalty Fees
R14.20
Off-Peak Rates
10% off
Park and Rides – Events
R50.00
Loading Fees Commuters are charged a loading fee when loading cash on their cards at
rate of the minimum of R1.50 or 2.5% of the load amount payable to ABSA Bank. This
fee did not accrue to the City.
(2)
OVERALL CHALLENGES FACING REA VAYA FARE COLLECTION SYSTEM
The implementation of the AFC System brought about a number of challenges
which resulted in a reduction in ridership. The challenges can be summarized as
follows:




Affordability: Higher fares for commuters who travel the furthest and
fares higher than those charged by minibus taxis.
Affordability: Additional administration charge for commuters in terms
of loading fee
Accessibility: High minimum fare required by the system to allow
access
Accessibility: Lack of the accessibility to the system by occasional
users with regards to the merchant footprint.
Already as is discussed below, a Mayoral Committee report was submitted in
November to address some of the challenges. Further steps to address the
challenges includes reviewing our relationship with ABSA, increasing
communication and marketing and doing a more systemic evaluation as we begin
to plan for Rea Vaya Phase 1C.
(3)
REVISED REA VAYA FARES 2013/2014 FINANCIAL YEAR
These challenges were detailed in a Mayoral Report tabled on 1 November 2013.
In that report, measures to address the current challenges, and ultimately increase
ridership, were proposed and these included the following:


City to absorb the loading fee until 30 June 2014 to relieve commuters
from the burden of additional charges;
Reduction of single and double trip cards by an average of 40% to
make the system more accessible to occasional users; and
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COJ : MAYORAL COMMITTEE 2014-03-20
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
Reducing the fare for the two furthest distances by an average of 10%
and capping of maximum fare to R12.50.
Council on 31 January 2014 approved these measures for implementation on
15 February 2014 after a public participation process of the revised fares in
November and December 2013. The revised fares are as follows:
Table 3: Revised Rea Vaya Fare Structure and Product Prices
Rea Vaya Journey Length
Approved
Fare
(2013/14)
Less than 5 km (Minimum Fare)
R5.50
More than 5 km but less than and equals to
R7.20
10 km
More than 10 km but less than and equals to
R9.00
15 km
More than 15 km but less than and equals to
R10.70
25 km
More the 25 km but less than 35 km
R12,50
More than 35 km (Maximum fare)
R14,20
Occasional Users – One Trip
R25,00
Occasional Users – Two Trip
R37,00
Penalty Fees
R14,20
Loading Fees to absorbed by the City until 30 June 2014
(3)
Revised
Fare
(2013/1
4)
-
Reduction
in Fares %
-
-
-
-
R11,50
R12,50
R13,00
R25,00
R12,50
8%
12%
48%
32%
12%
-
PROPOSED FARE CHARGES FOR 2014/2015
The Transport Department has done a further review of the patronage challenges
to the system and also done further modeling as to what fares would be
affordable to passengers, how to make the Rea Vaya more accessible to
especially new users and how to ensure that the bus operating costs are covered
by the City and not grant funding as is required by the NDOT.
One of the considerations was to move away from the distance based system and
introduce flat areas. Such a proposal could significantly increase patronage and
also enhance the role of public transport in poverty alleviation and addressing
apartheid’s spatial legacy where the poorest were forced to reside on the
periphery of the City.
After extensive deliberations and consultations it was felt that a move to a flat
fare should be further explored for possible introduction in 2015/16 by both
Metrobus and Rea Vaya and would need to be proceeded by extensive research,
policy development and public participation.
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Nevertheless, to keep Rea Vaya affordable, the current approved fares as
discussed under Paragraph 3(3) be retained in order to retain current patronage
and increase passenger numbers. It is proposed that this retention of the current
approved fares, together with a number of other measures will assist Rea Vaya in
achieving the targeted number of 65 000 passengers as proposed in the
Department of Transport’s 2014/2015 Business Plan.
…
As per Annexure B, the fare revenue will continue to be able to cover direct
operating costs.
Secondly it is further proposed to keep to a minimum number of transit fare
products for 2014/15. After the review and policy approach discussed above,
further products could be introduced.
The following three transit fare products are proposed:



Frequent user discounts if passengers load 10 trips or 40 trips as well
as park and rides;
Off peak fares (already implemented); and
Concession products for all people over the age of 60 (only in the off
peak).
These are discussed in more detail below.
(4)
Proposed Tariff Per Trip for Non-Frequent Users 2014/2015
As discussed above, it is proposed that the current approved fares for nonfrequent users be continued until 30 June 2015. For purposes of this repot, nonfrequent users will be regarded as users that do not make use of a frequent user
fare products, i.e. 10 and 40 trips transit fare products.
This continuation includes both the Peak and Off-Peak rates as approved as well
the prices for fare media. The approved fares are depicted in Table 4 below:
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City of Johannesburg Council 2014-03-26
COJ : MAYORAL COMMITTEE 2014-03-20
TRANSPORT
Table 4: Tariff per Trip for Non-Frequent Users 2014/2015
Rea Vaya Journey Length
Less than 5 km (Minimum Fare)
More than 5 km but less than and equals to
10 km
More than 10 km but less than and equals to
15 km
More than 15 km but less than and equals to
25 km
More the 25 km but less than 35 km
More than 35 km (Maximum fare)
Penalty Fees
Occasional Users – One Trip Card
Occasional Users – Two Trip Card
EMV Card
Non-Frequent Users
Current
Current
Approved Fares
Approved Fares
(PEAK)
(OFF PEAK)
R5.50
R5.00
R7.20
R9.00
R10.70
R11.50
R12.50
R12.50
R13.00
R25.00
R20.00
R6.50
R8.10
R9.60
R10.30
R11.20
R11.20
N/A
N/A
N/A
It should however be noted that loading fee as provided for in the Banking Service
Agreement with the banking partner; ABSA Bank will be reinstituted from
1 July 2014. The loading fee is charged at 2.5% of the loaded amount with a
minimum fee of R1.50 per load.
(5)
Proposed Fare Product for Frequent Users 2014/2015
Transport Department will also be introducing fare products for frequent
commuters by offering these commuters discounts for bulk purchases of trips. It
is anticipated that these products will increase patronage amongst current
commuters as well as attract new commuters. The products are aimed at frequent
commuters who travel either weekly and similarly to monthly travelers although
the products will not expire after a week or month.
The products are:

Rea Vaya Travel 10 (RV10): This is an EMV based product which is a
weekly equivalent to 10 trips that are discounted at a maximum of
10% with no loading fee and no off peak discount. The trips will never
expire except in accordance to the Consumer Protection Act. Table 5
depicts the price of the purchase and the fare per trip.
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City of Johannesburg Council 2014-03-26
COJ : MAYORAL COMMITTEE 2014-03-20
TRANSPORT
Table 5: Tariff for Fare Product – Rea Vaya Travel 10 (RV10) for 2014/2015
Rea Vaya Journey Length
Rea Vaya Travel 10 (RV10)
Validity
Purchase Price
Fare Per Trip
Less than 5 km (Minimum Fare)
R49.50
R4.95
R65.00
R6.50
R81.00
R8.10
R96.50
R9.65
More the 25 km but less than 35 km
R103.50
R10.35
More than 35 km (Maximum fare)
R112.50
R11.25
More than 5 km but less than and equals to
10 km
More than 10 km but less than and equals to
15 km
More than 15 km but less than and equals to
25 km

Rea Vaya Travel 40 (RV40): This is an EMV based product which is a
monthly equivalent to 40 trips and 20 days of parking that are
discounted at a maximum of 15% with no loading fee and no off peak
discount. The trips will never expire except in accordance to the
Consumer Protection Act. Table 6 depicts the price of the purchase
and the fare per trip.
Table 6: Tariff for Fare Product – Rea Vaya Travel 40 (RV40) for 2014/2015
Rea Vaya Journey Length
Rea Vaya Travel 40 (RV40)
Validity
Purchase Price
Fare Per Trip
Less than 5 km (Minimum Fare)
R187.00
R4.68
R245.00
R6.13
R306.00
R7.65
R364.00
R9.10
More the 25 km but less than 35 km
R391.00
R9.78
More than 35 km (Maximum fare)
R425.00
R10.63
More than 5 km but less than and equals to
10 km
More than 10 km but less than and equals to
15 km
More than 15 km but less than and equals to
25 km
(6)
Rea Vaya Concession Products for the Elderly for 2014/2015
The Transport Department is proposing to introduce one concession product in the
next financial year for commuters who are over 60 years old. Further products
may be introduced in later years.
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City of Johannesburg Council 2014-03-26
COJ : MAYORAL COMMITTEE 2014-03-20
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This product is anticipated to provide relief to pensioners from the burden on
transport costs by offering them a discount of up to 37.5% per trip travelled on
Rea Vaya BRT during off-peak. This concession product will be issued through
strict controls from Rea Vaya Customer Care Centers to the identified
beneficiaries by issuing them with different and personalized cards.
Personalization of the card will include the cardholder’s picture and personal
details (name, surname, identification number, etc.). The cost of the initial card
and the personalization will be covered by the City but any replacement cards will
be charged at R20.00 per card.
Similarly to the current Smartcard, the concession card will include a separate
stored value slot on the card, in which the cardholder will be able to load and
reload funds into the stored value slot. It should be noted that the Concession
Cardholders will not attract a loading fee as it is a transit product.
The fares are depicted in Table 7 below:
Table 7: Concession Travel Fares per Trip
(7)
Rea Vaya Journey Length
Concession Product
Validity
Off-Peak Travel
Peak Travel
Less than 5 km (Minimum Fare)
More than 5 km but less than and equals to
10 km
More than 10 km but less than and equals to
15 km
More than 15 km but less than and equals to
25 km
R3.40
R5.50
R4.50
R7.20
R5.60
R9.00
R6.70
R10.70
More the 25 km but less than 35 km
R7.20
R11.50
More than 35 km (Maximum fare)
R7.80
R12.50
Rea Vaya Regular Park and Ride for 2014/2015
The Transport Department has introduced a dedicated Rea Vaya Park and Ride
facility at Ndingilizi and may introduce further facilities at identified Rea Vaya
stations and City transport hubs during the 2014/15 financial year.
Parking packages include R6.00 per day per car for Rea Vaya Users who purchase
frequent user packages as indicated above on Ttable 5 and 6 above. A charge of
R10.00 per car per day will levied on Rea Vaya commuters and R20.00 on nonRea Vaya users. Overnight parking facilities will be charged at R50.00 per car per
day after each 24 hours.
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City of Johannesburg Council 2014-03-26
COJ : MAYORAL COMMITTEE 2014-03-20
TRANSPORT
Table 8: Regular Park and Ride Solution
(8)
Type of User
Parking Fare Per Day Per Car
Frequent Rea Vaya User
R6.00
Non-Frequent Rea Vaya User
R10.00
Non-Rea Vaya User
R20.00
Overnight Parking
R50.00
Rea Vaya Event Park and Ride for 2014/2015
Transport Department proposes that the Park and Ride Fare Charge for Events
remain the same at R 50.00 per anticipated commuter where Rea Vaya supplies
tickets to a Park and Ride operator for use on Rea Vaya services. This is an eventrelated premium fare as envisaged in the approved Rea Vaya Fare Policy. This fare
takes into account the additional costs of the fare media and the economies of
scale for the fee per kilometer being charged by the Bus Operating Company.
The Head of Scheduled Services Management Agency may negotiate alternative
forms and levels of payment; but this can’t be less than the tariff amount, for Rea
Vaya services with an event organizer if an alternative arrangement to individual
event tickets is required (for example the use of CompuTicket).
(9)
Rea Vaya Penalty Charges for 2014/2015
The Automated Fare Collection System enables the City to levy a penalty charge
where there is abuse of the system. The penalty charge system is to discourage
and prevent fare avoidance, evasion or abuse of the Rea Vaya BRT System, to
recover fares that are due but not paid and encourage maximum participation in
the process and contribution of fares by customers. A penalty fee will be levied to
a commuter in the following instances:


Failed to execute the tap-in action after having entered the BRT bus; or
Paid the required base fare during the tap-in action, but failed to pay
the remainder of the required fee as no tap-out action was conducted.
It is therefore proposed that the penalty charge to be maintained as per previous
financial year at R12.50 (Off Peak R 11.20). Where a penalty is levied through an
inspection device, the charge is proposed to be R20.00.
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COJ : MAYORAL COMMITTEE 2014-03-20
TRANSPORT
(10) Summary of Fares Charges
The summary of fares and fare products as detailed above are set as follows (see
Table 9 below):
Table 9: Summary of Fares and Fare Products:
Travel Fare
For non-frequent users (EMV card)
Less than 5 km (Minimum Fare)
More than 5 km but less than and equals to 10 km
More than 10 km but less than and equals to 15 km
More than 15 km but less than and equals to 25 km
More the 25 km but less than 35 km
More than 35 km (Maximum fare)
For non-frequent users + Park & Ride (EMV card)
Travel Fare
Less than 5 km (Minimum Fare)
More than 5 km but less than and equals to 10 km
More than 10 km but less than and equals to
15 km
More than 15 km but less than and equals to
25 km
More the 25 km but less than 35 km
More than 35 km (Maximum fare)
For Frequent users – RV10 (10 trips weekly-EMV):
Travel Fare
Less than 5 km (Minimum Fare)
More than 5 km but less than and equals to 10 km
More than 10 km but less than and equals to
15 km
More than 15 km but less than and equals to
25 km
More the 25 km but less than 35 km
More than 35 km (Maximum fare)
Peak
pricing
R5.50
R7.20
R9.00
R10.70
R11.50
R12.50
Off-peak
pricing
R5.00
R6.50
R8.10
R9.60
R10.30
R11.20
Peak
Off-peak
pricing
pricing
R15.50
R15.00
R17.20
R16.50
Fare per
trip
N/A
N/A
N/A
N/A
N/A
N/A
Fare per
trip
N/A
N/A
N/A
R19.00
R18.10
R20.70
R21.50
R22.50
N/A
R19.60
R20.30 N/A
R21.20 N/A
Peak pricing
Off-peak
pricing
R49.50 N/A
R65.00 N/A
Fare per
trip
R4.95
R6.50
R81.00 N/A
R8.10
R96.50 N/A
R9.65
R103.50 N/A
R112.50 N/A
R10.35
R11.25
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COJ : MAYORAL COMMITTEE 2014-03-20
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For Frequent users – RV10 + Park & Ride(10 trips weekly + 5 days parking-EMV):
Travel Fare
Peak pricing Off-peak Fare per
pricing
Day
Less than 5 km (Minimum Fare)
R79.50 N/A
R15.90
More than 5 km but less than and equals to 10 km
R95.00 N/A
R19.00
More than 10 km but less than and equals to
N/A
15 km
R111.00
R22.20
More than 15 km but less than and equals to
N/A
25 km
R126.50
R25.30
More the 25 km but less than 35 km
R133.50 N/A
R26.70
More than 35 km (Maximum fare)
R142.50 N/A
R28.50
For Frequent users – RV40 (40 trips Monthly-EMV):
Travel Fare
Peak pricing
Less than 5 km (Minimum Fare)
More than 5 km but less than and equals to 10 km
More than 10 km but less than and equals to
15 km
More than 15 km but less than and equals to 25
km
More the 25 km but less than 35 km
More than 35 km (Maximum fare)
Off-peak
pricing
R187.00 N/A
R245.00 N/A
Fare per
trip
R4.68
R6.13
R306.00 N/A
R7.65
R364.00 N/A
R9.10
R391.00 N/A
R425.00 N/A
R9.78
R10.63
For Frequent users – RV40 + Park & Ride (40 trips Monthly +20 days parking-EMV):
Travel Fare
Peak
Off-peak Fare per
pricing
pricing
Day
Less than 5 km (Minimum Fare)
R307.00 N/A
R15.35
More than 5 km but less than and equals to 10 km
More than 10 km but less than and equals to 15 km
R365.00 N/A
R426.00 N/A
More than 15 km but less than and equals to 25 km
More the 25 km but less than 35 km
R484.00 N/A
R511.00 N/A
R545.00 N/A
More than 35 km (Maximum fare)
R18.25
R21.30
R24.20
R25.55
R27.25
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City of Johannesburg Council 2014-03-26
COJ : MAYORAL COMMITTEE 2014-03-20
TRANSPORT
Table 10: Summary of Fares and Fare Products:
Fare Products and Other Charges
Peak
pricing
For Elderly concession users:
Less than 5 km (Minimum Fare)
More than 5 km but less than and equals to
10km
More than 10 km but less than and equals to
15km
More than 15 km but less than and equals to
25 km
More the 25 km but less than and equals to
35 km
More than 35 km (Maximum fare)
Park and Ride Charges
Event Park and Ride
Frequent Rea Vaya Park and Ride Users
(with valid Fare Products)
Non-Frequent Rea Vaya Park and Ride Users
Non-Rea Vaya Users
Overnight Parking
Fare Media and other charges
Occasional Users – One Trip Card
Occasional Users – Two Trip Card
EMV Card (New User)
EMV Card (Replacement)
Concession Card (New User)
Concession Card (Replacement)
Penalty Fees for Fare Evasion
Penalty Fee from Inspection
R5.50
Off-peak
pricing
Fare per
trip
R7.20
R3.40 N/A
N/A
R4.50
R9.00
R5.60
R10.70
R6.70
R11.50
R7.20
R12.50
R7.80 N/A
N/A
N/A
N/A
R50.00 N/A
N/A
R6.00 N/A
N/A
R10.00 N/A
R20.00 N/A
R50.00 N/A
N/A
N/A
N/A
R13.00
R25.00
Free
R20.00
Free
R20.00
R12.50
R20.00
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
R11.20
N/A
(11) PROJECTED REVENUE FOR 2014/2015
The revenue for the 2013/2014 financial year had to be revised from R169 million
to R64 million. A number of measures were implemented during the financial year
to limit the reduction in the ridership.
Over and above the measures implemented during the 2013/2014 to maintain and
improve ridership, it is expected that with the launch and implementation of new
products and additional discounts, ridership will improve to a daily average of
68,000 passengers for normal weekdays and 45,000 during normal and school
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holidays. Based on the new products to be implemented and measures to be
introduced, it is expected that the Fare Revenue for the 2014/2015 year will
reach R155 355 845.Please refer to the detailed breakdown on Annexure B.
Additional revenue of R5 million is also expected to be earned from Outdoor
Advertising. Thus total revenue for the 2014/2015 is projected at R160 389 388.
4
POLICY IMPLICATIONS
Proposed increase in fares for the 2014/15 financial year to be implemented from
1 July 2014.
5
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.
6
FINANCIAL IMPLICATIONS
The expected fare revenue is R128,790,500 and the revenue from outdoor advertising
is expected to be R5,000,000.
7
COMMUNICATIONS IMPLICATIONS
The relevant information regarding the 2014/2015 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.
8
OTHER DEPARTMENTS / BODIES CONSULTED
Finance Department.
IT IS RECOMMENDED
1
That 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 2014 as set out in
Annexure A hereto.
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2
That, 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)
display the notice and the documents and notice in the manner prescribed;
(2)
seek 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)
publish a notice in the manner prescribed and invite the local community to
submit written comments or representatives in respect of the City’s declared
intention to amend or determine Tariffs of Charges.
3
That 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.
4
That 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.
(TRANSPORT)
(Lethabo Nkomo)
(Tel. (011) 870-4620)
(tc)
THE ANNEXURE TO THIS ITEM IS ATTACHED ON THE ACCOMPANIED CD