The City of Cape Townâs Rail Feasibility Study is well under way. The preliminary Financial Analysis and Impact Assessment Report of a functional passenger rail system in Cape Town has been concluded. According to the findings, an efficient passenger rail service will save lower-income households up to R932 million per year; sustain 51 493 direct and indirect jobs; and contribute significantly to Cape Townâs economic growth, with an R11 billion benefit to the local economy each year.
The overall purpose of the Rail Feasibility Study is to guide the City in taking over the management of the passenger rail service from PRASA, and to identify the associated risks and impacts on the City.
âOur analysis shows there is an urgent need for National Government to devolve Cape Townâs passenger rail for the City to run, and for President Cyril Ramaphosa to keep his State of the Nation promise of âsolid progress within a yearâ. The lack of a safe, reliable, and affordable rail service is currently costing lower income households R932 million a year in increased transport expenses, and opportunity costs. This is a completely unnecessary financial burden which can be lifted from the shoulders of residents struggling with the rising cost of living. We call on the President and new Transport Minister Sindisiwe Chikunga to ensure the immediate finalisation of the much-delayed National Rail Devolution Strategy so that the City can get the trains running in the interest of all residents,â said Cape Town, Mayor Geordin Hill-Lewis.
âNot surprisingly, the first deliverable from our Rail Feasibility Study proves beyond doubt that there is a sound business case for Cape Town to have a fully operational and reliable passenger rail system. In fact, the numbers from this analysis demonstrate that we simply cannot afford not to have passenger rail as the backbone of our public transport network if we want to grow our economy, create jobs, and provide lower income households with an affordable transport option. An efficient passenger rail service will contribute to savings in transport costs for all who live and work in Cape Town, regardless of whether they make use of the service or not. These savings will contribute to the economic growth of the city in terms of increased productivity, and higher disposable income to households,â said Cityâs Mayoral Committee Member for Urban Mobility, Councillor Rob Quintas.
According to the preliminary analysis a fully restored and functional passenger rail service will, at present values, save Cape Town and its residents R81,6 billion over a 20-year period:
- The biggest saving is in vehicle operating costs, including fuel and maintenance costs: R31 billion over a 20-year period
- The second biggest is congestion time cost savings: R30,7 billion over a 20-year period
- The third biggest is casualty costs savings related to death and injuries caused by vehicle accidents and crashes: R11,1 billion over 20 years. The risk of an accident is far higher for road-based transport than for a train trip
- The fourth biggest is vehicle crash cost savings related to repairs and incidents: R8,7 billion over 20 years
These savings can be invested in Cape Townâs future economy:
- A fully operational passenger rail service will contribute R11,2 billion per year to Cape Townâs local economy; this equates to 4% of the cityâs annual Gross Domestic Product (GDP), and comprises of remuneration of employees and return on the capital invested
- Up to R932 million per year will be generated for low-income households from the operation of the passenger rail service through direct and indirect opportunities, and savings in transport costs. This will greatly assist in alleviating poverty
- A fully operational passenger rail service will sustain 51Â 493 employment opportunities per annum â these are direct jobs in the rail service; indirect jobs through sub-contracting and services, and other jobs through savings in increased productivity and commuting costs.
Apart from investigations into the merits to restore passenger rail, the report also presents the current adverse financial situation of the passenger rail service under PRASAâs management, and the subsidies the future owner will need from National Government to operate the service.
The study found that currently, the fare revenue and other operating income of the passenger rail service are about 34% of what it was in the 2013/â14 financial year. This correlates with the significant drop in passenger numbers over the past decade. The labour costs in running the service have not shown the same decline though; and, the shortfall in fare revenue has necessitated a significant increase in operational and capital subsidies from the National Government.
The Cityâs analysis confirms that an investment in restoring passenger rail in Cape Town is viable and necessary, and it is only a matter of determining how best to do it.
