Better to spend in integrated transit system: BusDay

[Steve Appleton]

From Business Day, 27 August 2010:

ITUMELENG MAHABANE: Better to spend on an integrated transit system.

‘My domestic employee, for example, spends a third more on commuting to work than I spend on petrol each month.’
Published: 2010/08/27 07:45:21 AM

SA SEEMS poised to become part of the high-speed rail fraternity, if reports out of China are to be believed. When a high-speed train from Johannesburg to Durban was first proposed a month or so ago, I suspect not many of us took it that seriously. It seems, though, that this idea, which was first mooted in 2006, is gaining traction. News that the government is testing the idea with China Railway Group gives it impetus.

In the past few years, China has emerged as one the most significant investors in and builders of high-speed rail. The country has brought two high-speed rail lines into use since 2006. By 2012, it plans to have built 42 high-speed rail links covering nearly 15 000 km, creating the world’s most extensive high-speed rail network. It is an extraordinary conceit, which amounts to building the equivalent of about 200 Gautrains in less than half the time it took us to build one. But, this is China and few would bet against it. It is difficult to think of a better partner to get a high-speed passenger rail line between Durban and Johannesburg completed within a reasonable time and on budget.

The idea of a high-speed rail network is tempting. I recently returned from a holiday in Italy, where I travelled from the northeast to the southwest of the country, all by high-speed train. It was the most efficient and pleasant cross-country travelling of my life. In my view, high-speed rail travel is unquestionably more efficient than flying. It probably takes close to three hours to travel from Johannesburg to Durban by air, if you include the full trip from point to point and add airline logistics. That compares favourably with the time of the proposed Johannesburg-Durban high-speed rail link.

In addition, the idea of South African public investment in large, technologically complex, capital investment projects is appealing. It increases the likelihood that public sector capital expenditure happens. The chasm between budgets and actual project approval and execution hints at one reason why our recession experience is not quite as rosy as it has been made out to be. So the idea of investing in productive infrastructure that will be completed is compelling.

But there are significant concerns about the project, despite the Department of Transport’s valid comments about the logjam that is the Johannesburg-Durban corridor. Not least of the concerns is that these kind of projects, with their high-profile champions, detract from the less sexy but high-impact integrated intracity transport projects the government is struggling to execute.

SA has significant challenges and should prioritise projects based on urgency and effect and then make the appropriate allocation of resources. That is assuming we are interested in building a modern, functional country instead of just playing with the toys and tools of the government. Few would argue that there is a big case for focused investment in transit systems.

SA’s transit system continues to be below the standards of our peer countries. Apartheid planning, apart from contributing to higher transit costs for low-income earners relative to SA’s peers, also made the solutions to this problem particularly difficult. My domestic employee, for example, spends a third more on commuting to work than I spend on petrol each month. Admittedly, the overall running costs of my car are higher than his commuting costs but research suggests that households that rely on public transport spend between 15% and 23% of their income on transport compared with about 10% for households that rely on cars.

Whatever the arguments for a high-speed passenger rail link between Durban and Johannesburg, it is difficult to see how that trumps the priorities of tackling substandard transit systems.

In SA, where inequality is a serious barrier to economic growth and productivity, the priority should be creating a more efficient and cost-effective transit system. Comparative research suggests that this would be an efficient subsidy for those earning middle to low wages. It is unclear what the effect of the Bus Rapid Transit (BRT) system is — it is still in phase one. Whatever its merits, on its own the BRT system is not enough to meet SA’s transit needs. SA’s major cities need an integrated modal approach to transit that combines motorised and rail (including light rail) systems to complement the efforts at upgrading the current heavy rail system.

Organised business should make this its business. The fiscal implications of high cost, public sector capital expenditure have a very clear effect on the economy and on businesses, as do the productivity implications of efficient transit systems. This provides a neat dovetailing of commercial and public interest in focusing the government away from the Johannesburg-Durban high-speed rail link and facilitating an approach focused on delivering an integrated transit system.

- Mahabane is a partner at Brunswick, a financial communications firm. He writes in his personal capacity.