29 May 2018
Executive Committee Decisions
The Executive Committee approved an 8 percent increase of the Durban Transport fare effective from 1 June 2018 at a meeting held today, 29 May.
The tabled report outlined the details of the increase stating its implementation date to prevent under-recovery of fare income by the operator.
It further stated that the Durban Transport bus services provides access and mobility to approximately 50 000 passengers daily. It went on to say that Durban Transport is funded through passenger fare income, a subsidy from the national budget received via province as well as contribution from Council funding. And given the fact that the operating costs escalate every year, the contract with the operator makes provision for annual increase of fares to enable the service level to be maintained while operating costs are rising as the subsidy does not increase annually in line with operating costs.
The report stated that the Durban Transport contract stipulates that the fare increase must be implemented annually to prevent under-recovery and to ensure that current service levels are maintained with the increasing operating costs. An independent economic assessment is done annually to inform the recommended fare increase based on economic indicators. An independent economic assessment has been undertaken and a recommendation of 8 percent has been made. The report states that the operator has been consulted on the fare increase and has supported the recommended fare increase.
In 2017, a fare increase of 8 percent was implemented on 1 June 2017. The annual fare increase is now necessary as prescribed by the contract.
The report states that in order to prevent negative effect on vulnerable groups such as scholars, pensioners and people with disabilities, the existing fare concessions will be retained to ensure that fares remain affordable to vulnerable groups.
Thami Manyathi, head of the eThekwini Transport Authority said the assessment for the fare increase was done by an independent company to assess all the costs of running the service. He said other bus operations in the City had a proposed increase of 10 percent.
A report, appraising the Executive Committee of progress that has been made towards the implementation of its resolution on 13 August 2015 and to get Council’s approval for the establishment of a Municipal entity, was tabled at a meeting held today, 29 May 2018.
The report stated that given the number of operational challenges that have been experienced since the privatisation of the Durban Transport bus service in 2003, the review of the Durban Transport bus service delivery mechanism was identified as necessary to address the challenges.
The delivery of a bus service function through Durban Transport plays a key role in the mobility of residents as approximately 50 000 commuters rely solely on the bus service daily.
The report states that on 13 August 2015, the Municipal Council resolved to approve the proposal of providing the Durban public transport bus service through an external mechanism in the form of a Municipal entity.
This resolution has been undertaken in compliance with the Municipal Finance Management Act (MFMA), compliance with section 84(1). The necessary assessment was done by the Municipality and its outcomes were published in the Public Notice.
The assessment states that the precise functions and services that the Municipal entity would perform on behalf of the Municipality are to manage the Municipal buses, drivers and other operational staff as well as to provide the bus service in line with the set routes and timetables, including the provision of special hire of the buses.
No staff of the Municipality would be transferred to the Municipal entity. No staff would become redundant because of the shifting of the service to the Municipal entity, hence there would be no cost implications associated with retrenchments.
No assets of the Municipality would be transferred to the entity save for the bus fleet which would be leased to the Municipal entity.
No assets of the Municipality would be obsolete as a result of the shifting of the service with no liabilities of the Municipality being ceded to the Municipal entity.
No debt of the Municipality attributed to the service would be retained because the service is currently not being provided by the Municipality.
The report concluded, stating that City Manager Sipho Nzuza has fully implemented the Council Resolution of 13 August by ensuring that Section 84 of the MFMA has been fully complied with in that the Municipality has determined the precise function or service that the proposed Municipal entity would perform on its behalf as well as the City making an assessment of the impact of the shifting of the service to an entity. The Municipality also made public an information statement setting out the Municipality’s plans for the proposed Municipal entity and invited the local community, organised labour and other interested parties to submit comments and representations in this respect.
The views of National Treasury the KZN Provincial Treasury, the National Cooperative Governance and Traditional Affairs (Cogta) Department, the KZN Provincial Cogta Department and the KZN MEC for Cogta Nomusa Dube-Ncube were also solicited.
The tabled report grants authority to the City Manager to establish the Durban Transport Municipal entity, to transfer the Municipal bus service to the Municipal entity and to provide regular reports on the progress thereof to Council.
Deputy City Manager of Finance Krish Kumar said a board of directors would be established as a Municipal entity to manage the service.
Thami Manyathi, head of the eThekwini Transport Authority said the court matter between the City and the bus operator has not been resolved. However, he said it was unlikely that the formation of the Municipal entity would affect the court matter.
“We are close to finalising all matters relating to the case with a full report on how we will be wrapping it up as well as how we will be implementing the Municipal entity being done,” he said.
Chairperson of the Human Settlements and Infrastructure Committee Mondli Mthembu said “we must get to the implementation of this as we have been speaking of it for a long time”.
While Chief Whip Nelly Nyanisa said it is proven that as an entity it will be run properly and the City will get good results. She cited the two other Municipal entities, namely the Inkosi Albert Luthuli International Convention Centre and uShaka Marine World, as examples.
“We made the decision a long time ago so let us implement it,” she added.
The Comrades Marathon, being hosted in the City on Sunday, 10 June is expected to inject R355 million into the City’s economy, the Executive Committee was told at a meeting held today, 29 May.
Sello Mokoena from KZN Athletics briefed the Executive Committee about the race taking place in a few weeks’ time.
He said the race, which is known as the ultimate human race, received 23 800 entries this year with 20 000 runners qualifying to run.
Speaking on the economic impact of the race, he said a commissioned independent economic impact assessment done by North-West University found that the Comrades Marathon was the second largest event contributing to the City’s economy.
“The Comrades is second only to the Durban July which generates R440 million, while the Comrades contributes R355 million to the local economy. It is a huge event for the City,” he said.
He said he was grateful to be partnering with the City for the event.
The race, which begins in Pietermaritzburg, will end for the first time at the iconic Moses Mabhida Stadium.
Mokoena said entrant numbers are limited because of infrastructural constraints.
“At the start of the race, the road needs to be wider to accommodate runners. The finish also has to be bigger which is why we are pleased to partner with the City and have the race end at a bigger venue. We are working to increase the number of applicants as there is a great demand. We are therefore grateful for the partnership we have with the City.”
EThekwini Mayor Zandile Gumede welcomed the presentation saying the Comrades Marathon was an important event for the City especially in terms of the economy.
She said tourists would be flocking to the City because of the race.
“We need to look at how we, as the City, can assist to draw bigger crowds to eThekwini because of the race. We need to attract more visitors to the City and help expand the race. The City Manager’s office will deal with technical aspect of how we can assist in expanding the race and bring tourists into Durban as a result,” she said.
Issued by the eThekwini Municipality’s Acting Head of Communications Mandla Nsele.
Please read this confidentiality disclaimer: