Public Transport « Pegasys

Public Transport

Over the past few years, Pegasys has established a significant presence in the South African Transport Sector. Our focus has been on the strategic, institutional, financial and business elements of the sector, with close linkages with technical partners – engineering, transport planning and information systems – to provide a holistic solution to ambitious public transport initiatives.

Our involvement in this sector includes the institutional conceptualisation of management arrangements for the Gautrain, motivation for a public transport operating subsidy through a financial and economic analysis, the functional establishment of a public transport operating entity, including organisational design and business and financial systems implementation, and the development of a business plan for the management of fare revenue, including detailed considerations on the outsourcing models and associated contractual arrangements.

We have also engaged key transformation related issues associated with the formalisation of the minibus taxi industry in the Western Cape and the establishment of large, commercial operator entities, in particular considering issues of shareholding, net present value of existing operations and incorporation of existing management and operational capacity into streamlined corporations.

Latest projects

Public Transport Restructuring in George
Pegasys is assisting the Western Cape Department of Transport and Public Works in the development of the legal, institutional, fare management and organisational arrangements for the implementation of a restructured public transport system in the city of George.

Strategic-institutional support to the Public Transport Improvement Programme
The Public Transport Improvement Programme (PTIP) is an extensive restructuring of public transport in the Western Cape. This initiative is a fundamental departure from the status quo and will see markedly improved public transport services rolled out across the province through conversion of existing services into gross, km-based operator contracts. In some cases, this conversion will be supported by infrastructure development (Bus Rapid Transit), while in others it will make use of existing infrastructure. Underpinning the programme is the formalisation of the minibus taxi industry and the formation of commercial public transport operators providing integrated public transport services under contract to government. Pegasys is leading the institutional stream of this large and ambitious programme, with sub-projects including:

Development of the appropriate institutional and business models for the management of gross contracts

Functional establishment of a management entity, including organisational establishment, financial arrangements, business process and systems implementation

Development of a business plan, including business, financial and outsourcing models, and associated contracting arrangements for the management of public transport fare revenue, and the development of a business plan for other sources of income, including carbon income

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Determination and motivation for a public transport operating subsidy
This was a highly strategic project for the Department in that it provided the motivation for National Treasury funding necessary to restructure the Western Cape Public Transport system, through an increase in operating subsidy from R400m to R1.3 bn per year. The motivation for this subsidy required a complex multifaceted project composed of the following elements: a proposed technical plan and rollout framework; with a proposed contract structure and relevant institutional and operational arrangements; different scenario considerations with sensitivity analyses; a risk assessment and management component; a social and economic cost benefit analysis; and a proposed transformation and implementation rollout strategy.

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Business case and legislation for the Gautrain Management Agency
Pegasys led the development of an institutional-financial-organisational business case for the Gautrain Management Agency to develop and manage the R20 billion Gautrain Rapid Rail Link project. The business case assessed the strategic need and opportunity for the initiative, appropriate corporate form based on a functional assessment, governance arrangements, organisational and financial implications, and a detailed risk analysis. The business case provided the basis for the legislation that legally established the Gautrain Management Agency as a PFMA Schedule 3b public entity.

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Feasibility assessment for the Public Transport Operating Entity
The Public Transport Operating Entity was considered as a institutional vehicle for the coordination and management of an integrated transport system of rail, bus and mini-bus taxis in the functional regions of the Western Cape province. Pegasys led the feasibility assessment for a WC Public Transport Operating Entity, to be established as a provincial public entity, a provincial trading entity of the Department of Transport and Public Work, a Government Component or a dedicated unit within the Department. The feasibility considered the situational assessment and the needs analysis, the key roles, powers and functions to respond to the needs, risk areas, governance arrangements and organisational and functional requirements.

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Engagement strategy for the Public Transport Improvement Programme
The engagement strategy was the seminal work on the engagement of the mini-bus taxi industry in the restructuring and transformation of the public transport sector in the Western Cape, focussing on the Cape Town Metro. Pegasys led the development of an engagement strategy, which developed the principles of engagement, considered various models of engagement and unpacked the fundamental risks and risk mitigation strategies of the engagement process.