Stakeholders | Operating Business Plan | Committee members | Bus operating company

A BUS Operating Company is being set up with a number of important stakeholders, in particular the taxi operators, and negotiations are still going on with the affected taxi drivers, encouraging them to become shareholders in the company.

In the interim, the City of Johannesburg established a Special Purpose Vehicle to run Rea Vaya Phase1A for the first six months.

A bus operating company will be set up

This Special Purpose Vehicle, which provides bus operating, maintenance and security services, is 100 percent owned by a trust and its beneficiaries are the taxi operators affected by the developments of Phase1A.

Once the fully fledged Bus Operating Company takes over, it will own and run the buses. The City of Johannesburg will determine the running schedule, run the marketing campaigns, and maintain the stations and routes.

The contract is likely to run for a 12-year period.

Buses will be operated on a concession basis, opening up new business opportunities for bus and taxi operators. The City of Johannesburg will guarantee a minimum income to the Bus Operating Company.

The business model has four components:

• An institutional regulatory environment in which privately concessioned companies operate the system with strong public oversight;
• An operator bidding process that encourages competition for the market, but limits competition within the market;
• Operator compensation based on vehicle kilometres travelled rather than number of passengers; and
• An independently concessioned fare collection system that distributes revenues in a wholly transparent manner.