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We don’t just drive buses; we transport people

and grow the economy. Customer time, safety,

comfort and satisfaction remain our highest

priorities.

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Johannesburg Metropolitan Bus Services (SOC) Limited

Registration Number: 2000/004704/07

(“Metrobus”)

2018/19 BUSINESS PLAN

Submission: May 2018

Sign Off:

Mr Tshepo Makola

Acting Managing Director’s

Signature: _______________________________

Date: ___________________

Ms Yolisa Kani

Chairperson of the Board

Signature: ________________________________

Date: _____________________

Councillor Nonhlanhla Helen Makhuba

MMC: Transport

Signature: ___________________________

Date:______________________

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Contents

1.

EXECUTIVESUMMARY…………………………………………………………Erro

r! Bookmark not defined.

2. STRATEGI INTENT ………………………………………………………………5

3. STRATEGIC ANALYSIS………………………………………………………….7

4. COMMUNICATION AND STAKEHOLDER ENGAGEMENT ………………18

5. IMPLEMENTATION AND PERFORMANCE REVIEW . Error! Bookmark not defined.22

6. FINANCIAL IMPACT .................................................................................................. 37

7 MANAGEMENT AND ORGANISATIONAL STRUCTURE ......................................... 44

8. RISK MANAGEMENT ................................................................................................. 47

9. BUSINESS PLAN PERFORMANCE MONITORING.............................49

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1. Executive Summary

Guided by the national and the City of Johannesburg’s strategic priorities, Metrobus 2018/19

Business Plan presents upcoming priorities and analysis and evaluation of 2017/18 results. Profiled

in this document are the organizational strategic direction, performance measures, risk assessment,

business environment and the 2018/19 deliverables. The entity’s business priorities are driven by its

stakeholders and an understanding of their critical needs, taking into account the City of

Johannesburg (“City”)’s long-term objectives.

Consistent with the 2017/18 business plan, the 2018/19 Business Plan content has been organized to

ensure continuity in the implementation of phase1 of the Metrobus Turnaround Plan wherein the

following key focus areas are were identified.

Introduce Five New MB routes: Focus on high demand routes namely MB1, MB2, MB3, MB4

and MB7.

Interim Fare Collection System and Fleet Management System – to be implemented in

2019/20 going forward;

Route & Shifts Rationalisation;

Introduction of more frequent and reliable off peak service; and

Enhancement of marketing and communication

Key Deliverables in the 2018/19 Business Plan:

1) Implementation of Diphetogo commitments;

2) Stabilising the entity centred around business process re-engineering, review of the

Turnaround Plan; organizational efficiency and effectiveness; and

3) Implementing Tier 1 and 2 of the National Treasury Circular 88

Metrobus will continue to monitor its performance against Shareholder Compact and Key

Performance Indicators (KPIs) from financial to customer service measures. With this 2018/19

Business Plan, Metrobus continues its progress towards successfully implementing its Turnaround

Plan in a fiscally responsible manner.

Core Mandate

The Johannesburg Metropolitan Bus Services (SOC) Ltd (“Metrobus / the company”) was

incorporated in 2000 and is a wholly owned Municipal Entity of the City of Joburg. The City appointed

Metrobus in terms of the Service Delivery Agreement to provide bus transport services to the

residents of Johannesburg. Metrobus therefore operates in furtherance of the City of Johannesburg’s

legislative mandate concerning public transport and is guided periodically by the strategic direction of

the City of Joburg as derived from the Integrated Development Plan and the Provincial Growth and

Development Strategy. Integrated Transport Plan is amongst some of the key strategic objectives of

the City, where Metrobus has a pivotal role to play as a provider of public transport.

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The main social responsibility of Metrobus is to maximise the number of people that use the entity bus

service. Increasing bus use is good for the community as transport plays a key role in addressing

social exclusion and giving people access to work. It is also good for the environment as more people

can travel by bus than in a private car, reducing the number of vehicles on the road.

Metrobus has had a long history of providing public transport in the City of Johannesburg. It is the

second largest municipal bus operator in South Africa and is currently operating 378 routes from

which Metrobus in the past could transport up to 90 000 passengers daily.

The City of Johannesburg is one of the greatest cities in the world, Metrobus is proud of the role the

entity plays in keeping it moving, working and growing which in turn makes life in the City better. Our

focus is to achieve this while rebuilding and transforming bus service for the millions of people that we

transport presently and for future generations. We are supporting thousands of employees, scholars,

pensioners and the general public thus stimulating vital economic growth.

2. STRATEGIC INTENT

2.1 Metrobus Vision

“To be a people centred, performance driven provider of an efficient conventional bus service within

the Integrated Public Transport Network”

2.2. Metrobus Mission

"To provide customer focused service that is accessible, safe, affordable, reliable and environmentally

friendly through an efficient and sustainable bus service”

2.3 Values

Metrobus is alive to the importance of its corporate and individual employee character. In this regard

the following values will serve as guideposts for our behaviour:

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2.4 Service Delivery Model

Every organization needs to have a customer service delivery model designed to integrate customer

service into the strategic and operational mindset of all staff in the organization

Delivering effective and efficient bus service that meets the needs of customers is a multifaceted

business that, due to the nature of the operational environment, faces continuous change and

complexity. Metrobus’ service delivery model aims to achieve a balance between customer

expectations and the cost of delivering attractive service that has value. Good employee engagement

and sound financial management play an equally important role in the effective delivery of service.

At the centre of our service are our existing and potential customers. The pace of change and new

technology coupled with high customer expectations is making many organizations develop or rethink

their customer service strategies. In an era where customer service has become a defining factor for

customers, organizations of all types struggle to find the unique balance between delivery of a

service, the cost of delivery and customer expectations.

Metrobus understands that the customer is at the core of our business. Our customers define what we

do and if we are successful at what we do every day.

2.5 Key Performance Functions

The entity’s functional structure is designed along five main areas:

Operations;

Technical Services;

Strategic and Business Planning;

Corporate and Support Services; and

Governance

Ubuntu

•A sense of community, being driven in our actions by the greater good of the Citizens of Joburg.

Respect

•Valuing those we serve, those who we work with and our organization.

Honesty

•Doing the right thing even when no one is looking.

Accountabiilty

•Holding ourselves responsible for our actions and the outcomes of our work.

Cooperation

•Seeking to at all times to join hands with all concerned with the furtherance of the interests of the Citizens of Joburg internal and external to Metrobus.

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Central to the fulfilment of Metrobus responsibility is the Operations Department and the Technical

Services Department.

The Operations Department is responsible for the planning of routes, dispatching of buses,

transportation of the citizenry of Johannesburg, supervision, inspections on route as well as the

operation of a dedicated service that ensures the mobility of passengers with disabilities.

The planning or scheduling section of the Operations Department has a huge responsibility to ensure

the optimal use of human resources especially bus drivers and assets which in the main refer to the

buses. Both of these if not scheduled efficiently can lead to unnecessary expenses. In this regard, the

entity will have to invest in a software programme which will allow our planners or schedulers to make

changes to our schedules efficiently and quickly. The continued investment in the information

technology to automate key operations functions is an absolute must and it can no longer be business

as usual.

Furthermore, the Operations Department is responsible for compliance with laws and regulations

applicable to bus operations and all road users. In this regard, the Department has to ensure that:-

Buses are operating with valid licenses;

Route Operating licenses are valid;

Drivers have the necessary valid licenses and professional driving permits;

Fines for traffic violations are paid or deferred to the offenders especially bus drivers. If

this is not done, then the proxy of the Company could possibly face arrest;

Buses have valid Certificate of Road Worthiness (C.o.R). Our Technical Services

Department ensures that buses are prepared for inspection by the Testing Stations

conducting roadworthy tests.

Annually, fares have to be increased and our fare increase proposal has to be approved

by Council before it can be implemented on 1st July every year.

Tasked with ensuring that operational fleet requirement is available is the Technical Services

Department (TSD) which is the organization’s support mechanical engineering arm responsible for the

regular maintenance and repairs to the entity’s fleet. The TSD is tasked, primarily with the Cost

effective maintenance of buses i.e. ensuring that the buses are Available to the Operations Division

and that the same buses are Reliable (no Breakdowns), and are Environmentally friendly (Clean and

Pollution–free), and above all Safe for the commuters, public and our employees.

TSD is also charged with implementing, testing and monitoring of the green transport innovation

which Metrobus has introduced with the procurement and conversion of some of the entity’s diesel

fleet to Diesel Dual Fuel buses.

3. STRATEGIC ANALYSIS

3.1 Strategic Alignment

Metrobus service mandate is aligned to the National Development Plan strategic areas and planning

priorities which focus on creation of a workable urban transit that will streamline an effective urban

transport system through:

provision of affordable, faster, reliable and safe public transport;

transport plans that are aligned with spatial development; and

providing incentives for public transport use.

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The entity’s business imperatives are guided by the City’s strategic priorities as formulated in the

Growth and Development Strategy 2040 (“the GDS 2040”). In turn, these imperatives are linked with

the City’s medium and short-term programmes emanating from the five (5) year IDP.

Metrobus contributes to the City’s four 4) key strategic priorities and three cluster GDS Outcomes.

Priority 1: Promote economic development and attract investment towards achieving 5% economic

growth that reduces unemployment by 2021.

Priority 2: Ensure pro-poor development that addresses inequality and poverty and provides

meaningful redress.

Priority 3: Create a culture of enhanced service delivery with pride.

Priority 6: Create a City that responds to the needs of citizens, customers, stakeholders and

businesses

GDS OUTCOMES

Outcome 1: A growing, diverse and competitive economy that creates jobs

Outcome 2: Enhanced, quality services and sustainable environmental practices

Outcome 3: An inclusive society with enhanced quality of life that provides meaningful redress

through pro-poor development.

Metrobus falls under the City’s Economic Growth Cluster which is central to the promotion of

economic development and investment. Sustainable mobility and equitable access are essential

factors in developing and facilitating a successful economy and inclusive society.

Figure 3.1 Economic Growth Cluster Focus

In the context Metrobus, commuter transport services remain pivotal to the realization and harnessing

all new urban opportunities the City regeneration strategy presents. Mobility and access deprivation is

a component of social exclusion. Inadequate or unequal public transport opportunities compromise

the ability of some residents to access all the opportunities available in the travel to work areas.

ECONOMIC GROWTH CLUSTER

Job intensive Economic

Growth

TOD corridor

Development

Inner City regeneratio

n

Spatial Optimizatio

n Economic

Infrastructure

Access and

Mobility

Small business, Entrepreneurship

and Informal Economy

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3.2 Environmental Analysis

No organization operates in isolation. The work of Metrobus is influenced by a range of factors

playing out in the City and across the country which present both opportunities and risks. Our success

depends on our ability to recognize these factors, and to develop a flexible and forward-thinking

strategy that is in step with a changing environment. The factors we believe will most impact our work

are outlined below.

3.2.1 National Treasury MFMA Circular No. 88

National Treasury initiated a process to review, rationalise and streamline the reporting arrangements

of metropolitan municipalities at the end of 2013.

As part of the National Treasury process, the Cities Support Programme (CSP) collated the reporting

requirements for all metropolitan municipalities and identified 2 572 indicators, requiring 18 467 data

elements to be reported upon annually. These indicators were then catalogued and analysed

according to their location on the results-chain, consistent with the provisions of the Framework for

Managing Programme Performance Information (FMPPI) (National Treasury, 2007). This analysis

confirmed that the current distribution of indicators is concentrated at the lower end of the results-

chain, without sufficient attention and consideration given to higher-level indicators, particularly those

at output and outcome level where there is a key logical linkage required to ensure the realisation of

government policy and strategic intentions.

The process of indicator consultation has led to the evolution of a tier classification system in terms of

readiness for tracking indicators. To indicate whether the indicator is well-defined, with a set of

methodologies and pre-existing datasets available to begin reporting on these indicators, a tier

classification has been introduced. On the basis of this tier classification system it is determined

whether an indicator is ready for implementation as a requirement of planning and reporting. In

agreement with stakeholders, all Tier 1 and Tier 2 indicators have been identified for introduction by

metropolitan municipalities in the 2018/19 planning and reporting cycle. All Tier 3 and Tier 4 indicators

require further work and development prior to introduction, but the intention is to progress them up the

tiers over time. Metropolitan municipalities able to report on these indicators (or some variation of

them) are encouraged to begin doing so even before they become prescribed.

3.2.2 Population Growth and Demand for Travel Choices

Transportation is the one of the critical issues in the City of Johannesburg. Demand for frequent,

accessible, well­ integrated transportation options continues to grow, and the projected growth of

population in the City will increase total demand for all forms of transportation. Investment is needed,

but must be planned carefully to maximize benefits.

The population for the City of Johannesburg is estimated at 5.4 million by 2021 from 4.9 million in

2016. This estimate shows that the City of Johannesburg is growing quickly. The population is

expected to grow by nine (9) percent over the five year period. The major driver of population growth

is migration. The City attracts 3 027 migrants per month.

Rising population and increasing economic activities has to be matched by increasing levels of

transportation facilities to meet various requirements and needs of various segments of the

population. Metrobus, through its long-term planning will make sure that the service offering is always

on par with the public transport demand in the City of Johannesburg.

3.2.3 Cost of Living

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Cost of living is closely tied to transportation, because the perceived affordability of

transportation and housing impacts decisions on where people choose to live, work, and

how far they travel. Longer commutes are often accepted in order to afford a home

purchase. New rapid transit can increase the attractiveness of an area but may cause rents

in adjacent neighbourhoods to rise. Metrobus and other partners in the City must consider

how to mitigate these risks, and design both infrastructure and transport s e r v i c e in a way

that enhances equity and access for all. Extension of the MB7 route from Joburg CBD to

Kya Sands to Cosmo City via Jan Smuts / Barry Hertzog and extension of MB9 route from

Joburg CBD to Fourways to Diepsloot is scheduled for July 2020. These extended routes

have traditionally been operated by minibus taxis and may require different business

model/partnerships for these extensions to be created.

3.2.4 Environment and Climate Change

Transportation is the largest source of greenhouse gas emissions. Metrobus’ contribution to the

reduction of carbon emissions i s b y making the fleet and facilities more energy-efficient, and

providing transportation choices that are less energy intensive.

3.2.5 Economic Growth and Competitiveness

Cities across the world are in intense competition to attract economic investment and to be cities of

choice for a talented and "creative class” workforce. A flexible, efficient, and reliable transportation

system is essential to demonstrate that CoJ will enable businesses to be successful, thereby enabling

the City to be competitive.

3.2.6 Innovations in Technology and Services

New technology-enabled solutions and online social media platforms are emerging which may rapidly

change the nature of travel and transportation demand. Real-time information, car sharing,

ridesharing, and Uber Technologies are some examples of these innovations. Strategic planning and

on-going research on innovation can work to leverage these opportunities to forward the region's

transportation goals.

3.2.7 Social Responsibility and Community Impact

The public transportation industry is facing challenging times. The rising demand for more connected,

higher frequency, more appealing travel experiences is placed against a backdrop of concerns over

public spending, demand for greater accountability, and increased scrutiny by stakeholders. Spending

to improve transportation must be transparent and publicly accountable, and must consider the future

operating and maintenance costs. To reconcile the broad range of interests, we must proactively

engage stakeholders to build and sustain a consensus-based transportation vision while enhancing

economic and social value for communities.

3.2.8 Creating Connections

Most people do not consider the municipal boundaries between where they work, live, and play, and

yet these boundaries heavily influence our current transit network. A fully connected transportation

system is essential to meeting our needs. We will continue to facilitate collaboration among

stakeholders, working to harmonize divergent views and interests. We will pursue technology-based

opportunities to further enhance integration. In this way, we create connections across political

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boundaries and across different modes of transit. We will also build transit in alignment with

population growth and provincial planning goals.

3.2.9 Trends in the use of Public Transport and Estimates of Future Demand

The 2014 Household Travel Survey shows that the modes of transport for daily commuting from

home to work are private car (48.4 percent), minibus taxi (29.3 percent), walking all the way (11.1

percent), bus (2.9 percent), train (2.4 percent), lift club (1.7 percent), and other (4.2 percent). Travel

by bus has dropped.

The fact that private car travel is on the increase is a matter of concern. The principal reason why

residents are not using higher capacity public transport modes is that these modes are not readily

accessible. What is equally worrying is that the average travel time for daily commuting has

increased markedly in the last few years, which obviously has implications for economic productivity

and personal and family time.

According to the 2014 Gauteng Household Travel Survey (GTHS) published in March 2016, bus users

were generally more satisfied (satisfied/very satisfied) (63%) than dissatisfied (dissatisfied/very

dissatisfied) (22%) with the available bus services. However, the main attributes of bus services

with which users were dissatisfied were the following:

Levels of crowding on the bus

Service frequency during peak and off-peak times

Facilities at bus stops and ranks

3.3 Metrobus Operating Environment

3.3.1 Market Overview

The entity operates in four business segments, namely:

The provision of daily scheduled public transport

The rendering of private hire transport services;

The operation of scheduled commercial contracts; and

Special contracts for the Gauteng Province’s Department of Transport in Eldorado Park.

In addition to the above services, and as part of the company’s social responsibility, the following

services are offered at discounted rates:

A dedicated service to persons with disabilities;

Subsidised pensioner services;

Scholar services; and

Free transportation to the South African Police Services (SAPS), the Johannesburg Metro Police Department (JMPD) and the South African National Defence Force (SANDF) officers.

3.3.2 Metrobus Customer Profile

Metrobus collects and analyses demographic and customer survey in order to ensure that bus

service planning is aligned to the basic requirements of the customers. Below is the summary of

Metrobus Customer Profile.

Figure 3.3.2 Metrobus Customer Profile

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Customer Profile

• 56% of customers are female (44% male) and average age is 30 years old.

• 44% of customers have income and 29% have no income

• Average income is below R6000 per month.

• Business travel a n d comm ut ing account for 6 1 % of customers, while Scholars

account for 28%.

3.3.3 Competitive Analysis

There are many ways to travel within the City other than using Metrobus. Depending on the origin,

distance, and the destination, options include private vehicle, mini bus taxes, BRT buses, privately

owned buses and in some cases commuter rail. Each of these competitive modes has distinct

advantages and disadvantages relative to traveling on a Metrobus.

As part of the phased development of the City’s Integrated Transport Plan (CITP), the City adopted

the Strategic Integrated Transport Plan Framework (SITPF) in 2013. The SITPF identifies Metrobus

as a primary operator for conventional bus services that would be used on medium-demand public

transport routes and to extend service to new areas of captive car users in the South, South-East,

North and North-West of the City.

16-19 20-24 25-35 35-49 50+

13

19

34

22

12

Age

29

26

10 1116

27

Personal Monthly Income

61

28

2 8

Reasons for Travelling

3525

146 4

115

Reasons for Choosing Metrobus

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Figure 3.3.3 Role of Metrobus within the Integrated Transport Plan

Modes Role

Rail (Gautrain and PRASA)

Mass transit, high volumes, few stops at key nodes

Rea Vaya BRT Mass transit, high to medium volumes, dedicated lanes, more frequent stops than rail

Conventional bus (Metrobus and PUTCO)

Medium transit, medium volumes, mostly in mixed traffic but with some public transport priority, frequent stops

Mini bus taxi Low volume or high volume on short distances, mostly in mixed traffic but with some public transport priority, frequent stops

Tuk tuks, metered taxis

Low volume, last mile, no dedicated routes.

3.3.4 Strength Weaknesses Opportunities Threats (SWOT) analyses

Metrobus conducted SWOT analyses as part the entity’s assessment of the internal strengths and

weaknesses as well as Threats and Opportunities for the entity. The SWOT analyses shape the

interventions that encompass strategic reaction.

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• Inadeqaute Expertise and experience in bus operation

• Poor customer service reputation

• Declining patronage

• Limited resources ( capacity and financial )

• High cost of operations (Mixed traffic, repositionng costs)

• Financial position

• Aging and unreliable fare collection system negatively impacts customer experience and results in reveune losses

• Volatile Labour Relations

• Unstable ICT environment

• Customer service (Call Centre, bus operators and culture )

• Insufficient marketing

• New business Model

• Alternative Revenue generation

• Increasing concern for environmmet - Creation of Green Economy hub

• Technology

• New Leadership

• Rising cost of fuel pushing commuters to affiordable public transport

• Streamlined deision making process with strong supportive Board of Directors

• Seamless transfers through imtegration

• Creation of a public Transport Forum

• Well defined routes

• Shareholder support

• Recognisable Brand

• Strong Governance Structures

• Relationshipwith local universities

• New fleet

• Reputational risk/damage

• Sustainabillity and constrained financial resources

• Perception of using buses leading to patronage loss

• Increasing private car usage

• Fleet and spare bus sizes

• Loss of assets through community protests

• Insufficient Knowledge

• Fare evasion

• Uncertainty of future funding for Capital Investment

• Uncertainty regarding the planned reabsorbing of MOEs

Threats Strengths

WeaknessesOpportunities

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3.3.5 PESTEL

Metrobus engages in environmental scanning, including commuter consultation and industry players,

to understand changing external factors that can influence planning decisions inside the entity.

Economic, Political, Legal and demographic changes are among the external factors assessed and

accommodated (where appropriate) in the annual deliverables listed in the business plan

3.4 Strategic Response

To deliver on the mandate, Metrobus must transform itself. We are restructuring and resourcing

ourselves to ensure that we can deliver on the commitments, while appropriately engaging impacted

communities. We are developing and refining business processes to make the entity more efficient,

enabling us to do more with less. Metrobus strategy explores the current situation highlighted in the

environmental analysis, the entity’s contribution to the NDP, the GDS and Economic Growth Cluster

as well as addressing the entity’s current operating environment.

PESTEL

Legal

AARTO regulations about vehicle maintenance and driver behaviour

Safety, Health and Environmental regulations

Political

Changes in Political environment

Changes of governement policies

Economic

Labour costs and stability

Customer confidence

Unemployment

Increased number of people who own cars

Fuel prices

Social

Public transport reliabilty

Growing population Immigration

Social mobility/ car user outlook /convenience (comfort and social status))

Technological

Rapid development in communication and computer technologies

Automated Fare Collection System (Cashless)

Fleet Management System

Management Information Systems

Sophisticated connectivity on buses

Automated bus mainteance tracking equipment

Environmental

Greater focus on green economy

GHG Emmissionns programme

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Metrobus strategic response advocates that the entity must move from short term, cost orientated

perspective to sustained delivery of stakeholder and customer expectations, that is, “Shift from

Conformance to Performance”. This requires a move from focusing on governance compliance to

ongoing measurement of performance utilising live data and ICT as an enabler. A move e towards

agreed longer term measures of continuous increase in stakeholder value though measuring

performance from goal, objective, strategy, project to activity level and finally a move from focusing on

organisational structure to operating model with a clear understanding of the organisational value

chain including customer needs, inputs, activities, outputs and meeting customer expectations.

Figure 3.4.1: Metrobus Transformation Model

3.4.2: Strategic Programmes:

To deliver the Vision and Mission, Metrobus developed seven Strategic Programmes adapted from

those in the VISION 2020 Strategy.

Figure 3.4.2: Metrobus Strategic Programmes

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3.4.2 Instil a Culture of Serving

To create an appealing travel experience, Metrobus will put the customer at the centre of

everything the entity does, considering the needs of current customers, potential customers,

and how the needs of both will evolve in the future. Our decisions will address not only the

experience of using bus service , but also how the service should be modified to better

meet specific transportation requirements for more people. Metrobus recognizes that the

success of aa bus services is closely linked to quality of, and integration with other local

services. For current customers, we will seek to minimize the disruptions from shortage of

buses and drivers.

3.4.3 Enhance Financial Stewardship and Accountability

Increasing demand on government funds means that spending must be planned to maximize

shared benefits across economic, social and environmental platforms. Public Transport is

unlikely to ever operate without subsidy, but transparency and accountability are critical.

Metrobus must address this while recognizing that infrastructure investments will generate new

operating costs that fare revenue alone is unlikely to cover.

Fares will always be our most important source of revenue. We will pursue fare structure

strategies and other options to increase revenue by increasing ridership, also helping meet

our transportation mandate. New non-fare revenues will also be pursued to minimize subsidy

requirements. Management will continue on the trajectory of implementing strict financial

discipline which ensures compliance with regulations, spending what is available no matter

how minimal.

3.4.4 Improve Efficiencies

Through innovation and rigorous process controls and audits, we will contain costs and improve our

operational efficiencies and cost effectiveness. We will consider the long-term benefits, make

deliberate strategic choices and allocate resources based on a clear set of priorities.

Capital projects will be completed on time and on budget while meeting high standards for quality.

Efficiency will also include rigorous prioritization to invest staff resources where they will have greatest

benefit, maximizing value for money, and helping sustain quality work over time.

By restructuring, streamlining and standardizing key processes and taking advantage of new

technology, we can improve operational efficiencies while maintaining safety and reliability. We intend

to explore alternative service delivery models, and new partnerships. Communications, marketing,

and operations will be aligned to improve collaboration and drive efficiencies throughout the

organization.

3.4.5 Invest In Analytics

Enhanced analytical and predictive capabilities will enable better asset management, more

accurate ridership forecasting, and ensure that our recommendations for new projects are

based on more robust business case development.

Work will be evaluated and prioritized based on business case analyses which consider up-front

costs, long-term economic and transportation benefits, and social and environmental impacts.

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We will explore new fare structures, ways to attract more riders, modelling to better predict ridership,

adjust schedules to accommodate customers, and complementary services to enhance our offering,

3.4.6 Earn and Maintain Public Trust

Metrobus m us t earn the trust of all our stakeholders including customers and residents in areas

impacted by our services. This involves delivering on our mandate and commitments on time, on

budget and with quality. The public expects openness and transparency in order to earn their

support for our work. Truly collaborative and mutually beneficial partnerships will be maintained

through commuter platforms like the commuter forum.

To operate as a credible and effective entity, we will keep our stakeholders informed and involved,

and we will engage in collaborative partnerships. We will make decisions in a timely and

transparent manner, and meet our commitments. We will be open and transparent with

communities on the benefits and inconveniences of our initiatives proactively engage in dialogue,

and incorporate local input where possible. We will also explain how input was incorporated into

decisions.

3.4.7 Enhance Internal Capacity

Attracting, retaining and cultivating talented staff is critical to successfully delivering our mandate. To

ensure we have the right skills and approach, we will adopt best practices in organizational

management, and invest in professional training and development.

Planning, communications, marketing, and operations will be aligned to improve service and project

delivery. We will seek to build internal talent and expertise, and will invest in change management

skills and processes to support the realignment of operations, and changes to our corporate culture.

We will undertake succession planning in a way that helps preserve corporate memory through

documentation, mentoring and skills transfer so that we provide continuity over time

3.4.8 Anti-corruption and Fraud

Following on the footsteps of the Shareholder, Metrobus has declared fraud and corruption service

delivery enemy as it hampers the potential of the entity. Our anti-corruption and anti-fraud campaigns

include using Metrobus advertising space to as a platform for the City to communicate messages that

discourage fraud and corruption.

On-going anti-fraud and anti- corruption workshops are being conducted, Internal Controls

improvement is on-going with the objective of obtaining a clean Audit; On-going risk assessment is

performed on a monthly basis.

3.4.9 Business Unusual – Diphetogo

In response to the Diphetogo Flagship Programme regarding provision of reliable, integrated public

transport system Metrobus will focus on the following:

Outcome by 2021

Deliverables Assumptions

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66 000 daily passengers by 2021 Financially sustainable organisation

What 2018/19 2019/20 2020/21 Sustainable operational plan aligned to the City’s Integrated Transport Plan - routes rationalised to maximise patronage ITS to be able to integrate to other operators Resolution of institutional review and financial model that enables sustainability

New and refurbished buses

Refurbishment of old buses

Procurement of new buses

Procurement of new buses

New ITS (fare collection and bus monitoring)

Phase 1 EMV Compliant Full integration

Infrastructure provision

Ghandi Square and Ellof Street revitalisation

Peak dedicated lanes to West investigated

Peak dedicated lanes to West implemented

4 COMMUNICATION AND STAKEHOLDER MANAGEMENT

4.1 Stakeholder engagement

At the heart of the Metrobus approach to stakeholder engagement is a commitment to building

relationships of trust, respect and integrity with all our stakeholders over the long term. Metrobus

understands that stakeholders are not homogenous; they are varied and have different needs and

expectations therefore cannot be treated in the same way and that communication approaches and

programmes cannot be generic. The overall goal is to provide an outstanding customer experience

which involves improvements in customer communication tools, safety and security improvements

and embedding a strong customer service philosophy within Metrobus workforce

4.1.1 Stakeholder engagement will focus on the following:

Strengthening the position of Metrobus increasing awareness of the improved service and to

drive ridership.

Increase public understanding, awareness and support of the public transport to the City of

Johannesburg

Strengthen engagement and awareness within Metrobus as well as City’s programs and

milestones and vision of Metrobus creating proud, informed and connected workforce.

Establish the mechanisms, processes and procedures for stakeholder participation having

due regard for the special needs of illiterate and/or disabled people, women and other

disadvantaged groups

Create awareness and utilization of the anti-corruption hotline, commuter forum and mobile

app.

4.1.2 Engagement risks within Metrobus include:

Conflict between participating stakeholders;

Unwillingness to engage;

20 | P a g e

Participation fatigue;

Creating expectations of change that the organisation is unwilling or unable to fulfil;

Disruptive stakeholders;

Uninformed stakeholders; and

Disempowered stakeholder

4.1.3 The entity’s Stakeholder Participation Forums include:

Board and Sub-Committee Meetings;

Union/Management meetings;

Local Labour Forum (Union Management Committee);

Commuter Forum;

Employee communication road shows at the depots; and

Oversight Committee Meetings such as the Group Performance Advisory Committee; Group

Risk Audit Committee; Section 79 Transportation Committee; Economic Growth Cluster;

Chairperson’s quarterly meeting

4.2 Communication Plan

Metrobus key stakeholders, their importance to our sustainability and key messages have been

mapped out in preparation for the development of a communication plan. A communication plan has

been developed to illustrate the engagement with each respective Stakeholder. The table below

highlights the different Stakeholders and how communication in daily operations and/or matters of

strategy (“On-going Engagements”) will be achieved.

Table 4.2: Communication Plan

Stakeholder Message or Purpose Mechanism

Commuters 1. To keep them informed on Metrobus service

2. Timely response to commuter concerns and complaints.

3. Lost Property

4. Problems with tags or smart card

5. Get feedback on customer issues and how performance needs to be improved.

1. Commuter Forum Meetings 2. Memoranda on buses 3. Memoranda through the media 4. Website 5. Road shows at strategic points

such as Ghandi Square. 6. Via mobile app 7. Walk in Centres (e.g. Ghandi

Square) 8. Call Centre 9. Social media 10. Banners 11. Customer satisfaction surveys 12. Street Pole Adverts and

billboards

Organised

Groups

To provide them with balanced and objective

information to assist them in understanding the

successes, challenges and possible solutions

and proactive measures or targets to meet key

performance areas.

1. Website

2. Media

Staff/

Employees

Strengthen awareness of programs within

Metrobus, milestones and vision of Metrobus

thus creating proud, informed and connected

workforce.

Performance Management

1. Managing Director’s Road shows

to all Depots and the head office.

2. Human Resources Department

Road shows to all Depots.

3. Memoranda on notice boards at

21 | P a g e

Ethics and Accountability

head office and all Depots

4. Through engagements with

Organised Labour as the

employees’ representatives.

5. Departmental meetings

6. Performance assessment

sessions

Media Monitoring the media and responding to critical

matters will also take priority to ensure that

Metrobus restores its reputation.

Use media to assist Metrobus in communicating

service related issues.

1. Media responses

2. Media briefings

3. Media releases

4. Interviews

Service

Providers

1. 1 Contractual obligation, performance

management.

2. 2. Update on new laws and regulations

3. 3. Fraud and Corruption

1. Service Agreement signing

meetings

2. Performance assessment

meetings

3. Briefing sessions

Shareholder 1. For approval 2. For information 3. For strategic direction, guidance and

advice.

1. Quarterly reports; 2. Meeting engagements such as

Cluster meetings, Mayoral Committee meetings, Extended Executive Management meetings (“EEMT”) (chaired by the City Management)

3. Engagement and attending to requests from City departments and MMC.

Board of

Directors

1. For approval 2. For information 3. For strategic direction, guidance and advice 4. The Board should ensure ethical leadership

and Metrobus that the company is and is seen to be a responsible corporate citizen.

5. The Board has a responsibility to govern stakeholder relations.

6. The Board should ensure the integrity of integrated reporting and disclosure.

7. The board should ensure that the company complies with applicable laws and considers adherence to non-binding rules, codes and standards.

1. Board Reports in Board meetings

2. In writing to the Board- dissemination by email, hand delivered correspondence.

4.3 Communication Engagement Outputs and Action Plan

Metrobus will systematically monitor and evaluate the overall quality of the stakeholder engagement,

and the owners of engagements shall evaluate the quality of the respective engagements.

The monitoring and evaluation of outputs (the action plan) and outcomes (the results of decisions and

actions) should be integrated with overall sustainability performance monitoring and evaluation.

22 | P a g e

5 IMPLEMENTATION AND PERFORMANCE OVERVIEW

5.1 Past performance

In the 201718 financial year Metrobus implemented the first phase of the three phased Turnaround

Plan. The following outcomes were achieved:

Business Plan Element Progress made to date Impact

Introduce Five New MB routes: Focus on high demand routes namely MB1, MB2, MB3, MB4 and MB7.

Fleet Capability assessment has been completed;

Human Resource Capability assessment has been completed.

Appointed 62 (52 bus drivers and 10 trainees) ; twenty bus drivers have been trained);

Risk management plan has been completed ; and

Consultations of Key Stakeholders have been completed.

Piloted the MB routes

Improved service reliability;

Improved customer satisfaction index;

Refurbishment of Double Deck Buses

Completed Assessment of

fleet

33 double deck buses is

underway

Re-fleeting strategy has

been drafted

Improved customer satisfaction index;Increased patronage ; increased revenue; and ‘Reduction in carbon emissions

Tariff restructuring Completed implementation of Council approved 2017/18 Tariff restructuring

Improved revenue

23 | P a g e

Marketing and communication

Elevated Marketing Function to a Strategic enabling position in the entity

Developed Marketing and Communication Plan;

• Developed and launched social media platforms.

• Recruited Social Media practitioners as part of re-establishing the communications team.

• Conducted Stakeholder consultation with regards to implementation of the MB routes as well as Introduction of the cashless system; and

• Established a working relationship with external stakeholder to tap into their users and to enhance the flow of content.

Improved stakeholder engagement Increased patronage Reduced number of complaints

5.1.6 Key Challenges

Notwithstanding the success in arresting the decline in and sustaining Metrobus service as well as

progress made in the turnaround plan, huge challenges still face the entity. Metrobus has not yet

entered a stage where commuter expectations are satisfactorily met and the entity is set to be

delivering high quality, safe and reliable service.

a) Patronage Decline and Revenue Shrinkage

The entity is experiencing a shrinking market share with the number of ferried passengers reaching a

record low 10 974 876 for the year ended 30 June 2017. The entity experienced a fare revenue

shortfall of R56 million for the same period.

These passenger numbers are dwindling which can be linked directly to buses out of operations

affecting the bus reliability of services resulting in the cancellation of scheduled trips over the past few

years. It is also important to state that the reduction of the passenger numbers of Metrobus has also

been caused by changes in the bus operating environment. There are certain routes which were

operated by Metrobus which were taken over by Rea Vaya and this obviously had an impact on the

number of passengers which is being carried by the organisation.

Patronage Trend over the Past Five Years

Financial Year Annual Passengers Ferried

FY13 16 494 150

FY14 14 882 827

FY15 13 482 981

FY16 11 976 717

FY17 10 974 876

24 | P a g e

b) Inadequate Fleet Capacity to Operate Scheduled Trips

Reliability of the service has been impacted by the non-availability of an average of 127 buses per

day. The one hundred and seventy five (175) new buses against the fleet requirement of three

hundred and eighty one (381) buses are not enough to operate all scheduled trips and Metrobus

continues to rely partially on old fleet. The aged fleet continues to experience breakdowns.

c) Service Quality and Maintenance: In order to improve the image of bus travel and achieve modal

shift, there is a need to ensure that bus combustion systems, engine failure and bus availability

remain a focus of our service programmes

d) Road safety problems due to dangerous infrastructure and bad driver conduct: Traffic

congestion and bad driver behaviour challenges Metrobus’ commitment to road safety and on- going

bus driver training.

d) Service Information: Communication of unplanned service disruptions is still a challenge at

Metrobus and this has led to the increased number of complaints and increasing levels of

dissatisfaction from the customers.

The above challenges necessitated review of business process as highlighted in the business

process logic below.

25 | P a g e

Business Processes Logic ModelProblem Statement: Low levels of service delivery and customer service as a result of limited resources and capacity, aged and unreliable and unavailable infrastructure and fleet, obsolete technology, poor systems, low revenues, non-responsive policies and procedures and a poor organisational culture

Level of implementation of

Refleeting Strategy

Operational Efficiency

Increased implementation of ICT Strategy

Improved Service Delivery and Service Quality Standards

Business Processes developed

by target date

OUTPUTS ULTIMATE OUTCOME

# of passenger ferried

INTERMEDIATE OUTCOME

Operational Excellence

DIRECT OUTCOME

Increased Implementation of ICT Infrastructure as a Business

Enabler

Availability of Fleet/Buses

Achieved accreditation Status as a preferred Repair and

Maintenance Centre

% of fleet requirement to operate

scheduled trips met

% Customer satisfaction

index

CRM System implemented by

target date

Reliability of Service

% planned trips completed

Improved Culture of Safety and Security

# of blameworthy accidents

per 100k kms operated

% implementation of the

Digital/ICT Strategy

Increased implementation of the CRM Strategy

Operational Effectiveness

Rand value reduction in

operational costs

# of on-board security

incidents

Contract Mgt system

implemented by target date

26 | P a g e

5.2 Key Focus Areas of Service Delivery

To manage the execution of the strategy, Metrobus has developed a Corporate Scorecard, which

represents how the entity to support the core business and implement the transformation agenda.

Performance Indicator

(Output level only)

Baseline (Annual Performance of 2017/18 estimate

d)

Annual target for 2018/19

Target for 2018/19 SDBIP per Quarter

1st Quarter Planned Target

2nd Quarter Planned Target

3rd Quarter Planned Target

4th Quarter Planned Target

1 2 3 4 5 6

Average public transport commuting time

55

minutes (GHTS 2014)

55 minutes N/A- Annual Activity performed in the fourth quarter

N/A- Annual Activity performed in the fourth quarter

N/A- Annual Activity performed in the fourth quarter

55 minutes

Percentage share of monthly income spent on public transport, for households using public transport

>10% (GHTS 2014)

10%

N/A- Annual Activity performed in the fourth quarter

N/A- Annual Activity performed in the fourth quarter

N/A- Annual Activity performed in the fourth quarter

10% of monthly income spent on public transport, for households using public transport

Percentage of respondents indicating that they believe public transport to be "reliable"

New 70%

N/A- Annual Activity performed in the fourth quarter

N/A- Annual Activity performed in the fourth quarter

N/A- Annual Activity performed in the fourth quarter

-

Percentage of respondents indicating that they believe public transport to be "safe""

New 70%

N/A- Annual Activity performed in the fourth quarter

N/A- Annual Activity performed in the fourth quarter

N/A- Annual Activity performed in the fourth quarter

-

Percentage of municipally-contracted scheduled bus services 'on time'

New 80% of scheduled bus services 'on time'

80% of scheduled bus services 'on time'

80% of scheduled bus services 'on time'

80% of scheduled bus services 'on time'

80% of scheduled bus services 'on time'

Road traffic fatalities per 100,000 populations

New Zero traffic fatalities per 100,000 populations

Zero traffic fatalities per 100,000 populations

Zero traffic fatalities per 100,000 populations

Zero traffic fatalities per 100,000 populations

Zero traffic fatalities per 100,000 populations

Average number of fatalities per fatal crash

New Zero traffic fatalities per 100,000 populations

Zero traffic fatalities per 100,000 populations

Zero traffic fatalities per 100,000 populations

Zero traffic fatalities per 100,000 populations

Zero traffic fatalities per 100,000 populations

27 | P a g e

5.4: 2018/19 Priority Implementation Plan

KEY PRIORITIES

National outcome: An efficient, effective and development-oriented public service

Johannesburg 2040 outcome: An equitable and inclusive society with high quality of life.

PIP Metrobus

Key

Performance

Outcome

Key

Performan

ce

Indicator

Baseline Target

2018/19

Key

Interventio

ns

2018/19 Budget

per programme

2016/17Quarterly performance targets Evide

nce

Means of

verification

Capex

Opex

R400

million

Q1 Q2 Q3 Q4

PROGRAMME 1: CUSTOMER SERVICE, STAKEHOLDER ENGAGEMENT AND COMMUNICATION

1 Promote

economic

development and

attract investment

towards

achieving 5%

economic growth

that reduces

unemployment by

2021

Economic

growth

Operational

excellence,

increased

reliability and

accessibility

% planned

trips

completed

88% of

scheduled

trips

completed

90% of

scheduled

trips

completed

Assessment of current environment (personnel, maintenance capacity, scheduling capacity) Capacitate Technical Services Department in order to deliver on operational requirement

R162

million

90% of

scheduled

trips

completed

90% of

scheduled

trips

completed

90% of

scheduled

trips

completed

90% of

scheduled

trips

completed

Operatio

ns

quarterly

reports

Questek

system

generated

and Qmerit

reports

2 Ensure pro-poor

development that

addresses

inequality and

Operational

excellence,

increased

reliability and

Average

number of

Metrobus

passenger

(51 000

Metrobus

passenger

trips per

(56 800 Metrobus

passenge

r trips per

Improve fleet management and driver behaviour

R144

million 60 600

Metrobus

passenge

r trips per

60 600

Metrobus

passenger

trips per

45 400

Metrobus

passenger

trips per

60 600

Metrobus

passenge

r trips per

Operatio

ns

quarterly

reports

Questek

system

generated

reports

28 | P a g e

poverty; and

provides

meaningful

redress

accessibility

trips per

working

day

working

day)

working

day

working

day

working day working

day

working

day

3 Create a culture

of enhanced

service delivery

with pride.

Improved

passenger

safety

Number of

blameworth

y accidents

per

100 000

kms

operated

Accident

rate: <0.75

per

100,000

bus-km per

month.

Reduction of blameworthy accidents through on-going bus driver training and fleet maintenance

R80

million

Accident

rate: <0.75

per

100,000

bus-km.

Accident

rate: <0.75

per 100,000

bus-km.

Accident

rate: <0.75

per

100,000

bus-km.

Accident

rate: <0.75

per

100,000

bus-km.

Operatio

ns

quarterly

reports

Monthly

Depot

Accident

report

4 Ensure pro-poor

development that

addresses

inequality and

poverty; and

provides

meaningful

redress

Improved

passenger

safety

Number of

on-board

security

incidents

Zero

Number of

on-board

security

incidents

Zero

Number of

on-board

security

incidents

Monitor and / avoid hot spots

R5

million

Zero

Number of

on-board

security

incidents

Zero Number

of on-board

security

incidents

Zero

Number of

on-board

security

incidents

Zero

Number of

on-board

security

incidents

Operatio

ns

quarterly

reports

Monthly

Security

incidents

report

5

Create a City that responds to the needs of citizens, customers, stakeholder and businesses.

High levels of

Customer

satisfaction

% of

service

disruptions

communica

ted

80% of

service

disruptions

communica

ted

95% of

service

disruptions

communic

ated

Implement

Communicati

on strategy

R1

million

95% of

service

disruptions

communic

ated

95% of

service

disruptions

communicat

ed

95% of

service

disruptions

communica

ted

95% of

service

disruptions

communic

ated

Operatio

ns

quarterly

reports

Cancelled

trips and

communicati

ons report

6 High levels of

Customer

satisfaction

Percentage

of

complaints

resolved

within the

timelines

specified in

the

customer

service

60% of

complaints

resolved

within the

timelines

specified in

the

customer

service

charter

80% of

complaints

resolved

within the

timelines

specified

in the

customer

service

charter

Improved

customer

complaints

handling

process

R5

million

80% of

complaints

resolved

within the

timelines

specified in

the

customer

service

charter

80% of

complaints

resolved

within the

timelines

specified in

the customer

service

charter

80% of

complaints

resolved

within the

timelines

specified in

the

customer

service

charter

80% of

complaints

resolved

within the

timelines

specified in

the

customer

service

charter

Operatio

ns

quarterly

reports

Complaints

handling

system

report

29 | P a g e

charter

7 High levels of

Customer

satisfaction

%

Customer

satisfaction

index

68%

Customer

satisfaction

index

70%

Customer

satisfactio

n index

Improved

customer

engagements

and service

quality

R3

million

N/A-

Annual

Activity

performed

in the

fourth

quarter

N/A

Annual

Activity

performed in

the fourth

quarter

N/A Annual

Activity

performed

in the

fourth

quarter

70%

Annual

Activity

performed

in the

fourth

quarter

Annual

custome

r survey

Customer

satisfaction

index

8 Create a culture of enhanced service delivery with pride.

Better

Service

Quality

% of

service

standards

achieved

70% of

service

standards

achieved

80% of

service

standards

achieved

Close

monitoring of

service

standards

- 70% of

service

standards

achieved

75% of

service

standards

achieved

80% of

service

standards

achieved

80% of

service

standards

achieved

Operatio

ns

quarterly

reports

on

service

standard

s

Service

standards

report

National outcome: An efficient, effective and development-oriented public service

Johannesburg 2040 Outcome: Enhanced, quality services and sustainable environmental practices.

PIP Metrobus

Key

Performance

Outcome

Key

Performance

Indicator

Baseli

ne

Target

2018/19

Key

Interventions

2018/19 Budget per

programme

2017/18 Quarterly performance targets Evidence Means of

verification

PROGRAMME 2: INNOVATION AND THE GREEN ECONOMY

Capex

Opex

R9.2

million

Q1 Q2 Q3 Q4

9 Preserve our

resources for

future

generations

Environment

consciousnes

s/Decreased

Carbon

Footprint

% carbon

emissions

Maintain

hartridge

units

measureme

nt at 41.5%

Maintain

hartridge

units

measurem

ent at 30%

Carbon

emissions

programme :

Monthly

hartridge units

testing

R9.2

million

Maintaining

the

emissions at

30% hatridge

Maintaining

the

emissions at

30% hatridge

Maintaining

the emissions

at 30%

hatridge

Maintainin

g the

emissions

at 30%

hatridge

Technical

Department

quarterly

reports

Monthly

reports from

the technical

services

department

30 | P a g e

National outcome: An efficient, effective and development-oriented public service

Johannesburg2040 outcome: An honest, transparent and responsive local government that prides itself on service excellence.

PIP Metrobus

Key

Performanc

e Outcome

Key

Performa

nce

Indicator

Baseline Target

2018/19

Key

Intervention

s

2018/19 Budget

per programme

2017/18 Quarterly performance targets Evidence Means of

verification

PROGRAMME 3: ENTERPRISE DEVELOPMENT AND JOB CREATION

No

Capex

Opex

R9. 5

million

Q1 Q2 Q3 Q4

10

Promote

economic

development

and attract

investment

towards

achieving 5%

economic

growth that

reduces

unemployme

nt by 2021.

Completene

ss of

revenue

Total

number of

SMMEs

supported

50 SMMEs

supported

60 SMMEs

supported SMME

support

programmes

R5

million

30

SMMEs

supporte

d

40 SMMEs

supported

50 SMMEs

supported

60 SMMEs

supported

SMME

quarterly

progress

report

SMME

database

11

Promote

economic

development

and attract

investment

towards

achieving 5%

economic

growth that

reduces

unemployme

Safe and

secure bus

service

% of total

expenditur

e spent on

B-BEEE

30% of total

expenditure

spent on B-

BEEE

30% of total

expenditure

spent on B-

BEEE

Supply Chain

policy

adherence

R3

million

30% of

total

expendit

ure

spent on

B-BEEE

30% of total

expenditure

spent on B-

BEEE

30% of total

expenditure

spent on B-

BEEE

30% of

total

expenditur

e spent on

B-BEEE

B-BEEE E

quarterly

progress

report

B-BEEE

database

31 | P a g e

nt by 2021.

12

Promote

economic

development

and attract

investment

towards

achieving 5%

economic

growth that

reduces

unemployme

nt by 2021..

Capacitated,

committed

and

performance

driven

employees

Total

number of

EPWP

jobs

created

2018

71 EPWP

jobs created

100 EPWP

jobs created

EPWP

support

programmes

R1. 5

million

15

EPWP

jobs

created

50 EPWP

jobs

created

75 EPWP

jobs

created

100

EPWP

jobs

created

EPWP

quarterly

progress

report f

EPWP

database

32 | P a g e

OPERATIONAL DAY TO DAY

National outcome: An efficient, effective and development-oriented public service

Johannesburg 2040 outcome: An honest, transparent and responsive local government that prides itself on service excellence

No. PIP Metrobus

Key

Performance

Outcome

Key

Performan

ce

Indicator

Baseline Target

2018/19

Key

Interven

tions

2018/19 Budget

per programme

2017/18 Quarterly performance targets Evidence Means of

verification

PROGRAMME 4: FINANCIAL MANAGEMENT, VIABILITY AND SUSTAINABILITY

No

Capex

R’000

Opex

R’000

R320

million

Q1 Q2 Q3 Q4

13 Enhan

cing

our

financi

al

sustai

nability

Financial

viability and

sustainability

% Spend

against

approved

Operating

Expenditu

re

Budget

97% total

spending

98%

Spend

against

approved

Operating

Expenditur

e Budget

Discipline

d

expenditur

e

managem

ent

R7

Million 98% Spend

against

approved

Operating

Expenditur

e Budget

for Q1

98% Spend

against

approved

Operating

Expenditure

Budget for

Q2

98%

Spend

against

approved

Operating

Expenditur

e budget

for Q3

98% Spend

against

approved

Operating

Expenditure

budget for

Q4

Finance

quarterly

report

Quarterly

and

Annual

financial

reports

14 Financial

viability and

sustainability

Number

of annual

leave

days

balance

per

employee

36 annual

leave days

balance per

employee

24 annual

leave days

balance

per

employee

Quarterly

managem

ent of

annual

leave

R3.2

million

36 annual

leave days

balance per

employee

30 annual

leave days

balance per

employee

26 days

annual

leave days

balance

per

employee

24 annual

leave days

balance per

employee

Human

Resource

s

Departme

nt

quarterly

report

Leave

liability

report

15 Financial

viability and

sustainability

% Spend

against

approved

capital

budget

95% Spend

against

approved

95%

Spend

against

approved

capital

Monitoring

of CAPEX

on a

monthly

R3

million

30% Spend

against

approved

capital

20% Spend

against

approved

capital

20%

Spend

against

approved

capital

25 %

Spend

against

approved

capital

Finance

quarterly

report

Capital

expenditur

e report

33 | P a g e

capital

budget

budget basis budget budget budget budget

National outcome: An efficient, effective and development-oriented public service

Johannesburg 2040 outcome: An honest, transparent and responsive local government that prides itself on service excellence

PROGRAMME 5: OPERATIONAL EXCELLENCE

PIP Metrobus

Key

Performance

Outcome

Key

Performan

ce

Indicator

Baseline Target

2018/19

Key

Interventi

ons

2018/19 Budget

per programme

2017/18 Quarterly performance targets Evidence Means of

verificatio

n

Capex

Opex

Q1 Q2 Q3 Q4

16 Create an honest and transparent City that fights corruption.

% of

Auditor-

General

South

Africa

(AGSA)

Audit

findings

resolved

61%

AGSA

Audit

findings

resolved

100%

AGSA

Audit

findings

resolved

100%

implement

ation of

AGSA

findings

and

recomme

ndations

with no

repeat

findings

R6

million

Audit

findings

impleme

ntation

plan

drafted

30% AGSA

Audit findings

resolved

70% AGSA

Audit

findings

resolved

100%

AGSA

Audit

findings

resolved

Internal

audit

quarterly

reports

Audit

findings

Tracker

audited by

Internal

Audit

17 Create

a

culture

of

enhan

ced

servic

e

deliver

y with

pride

Well

maintained

assets

Operational

excellence,

increased

reliability and

accessibility

% of fleet

requiremen

t to operate

scheduled

trips met

79% of

fleet

requirem

ent to

operate

schedule

d trips

met

90% of

fleet

requiremen

t to operate

scheduled

trips met

Develope

d and

implement

ed

Repairs

and

maintenan

ce plan

Establish

reliability

unit

R30

Million

R287

million

90% of

fleet

requirem

ent to

operate

schedule

d trips

met

90% of fleet

requirement

to operate

scheduled

trips met

90%of fleet

requiremen

t to operate

scheduled

trips met

90%of fleet

requiremen

t to operate

scheduled

trips met

Technical Services Departmental quarterly report

Monthly technical fleet availability report

18 Creat % Nil 100 % Implement R6.7 25% 50% 75% 100% Internal Minutes of

34 | P a g e

e an honest and transparent City that fights corruption.

compliance

with key

controls

dashboard

compliance

with key

controls

dashboard

internal

controls

framework

million complian

ce with

key

controls

dashboa

rd

compliance

with key

controls

dashboard

compliance

with key

controls

dashboard

compliance

with key

controls

dashboard

audit quarterly report

Audit and Risk Committee approving the report

19 Create an honest and transparent City that fights corruption.

Good clean

governance

with a focus

on eliminating

corruption

%

mitigation

actions in

the risk

registers

implemente

d or up to

date

Nil 70% Identificati

on and

mitigation

of risks

across all

Departme

nts

R7

million

20%

mitigatio

n actions

in the

risk

registers

impleme

nted or

up to

date

40%

mitigation

actions in the

risk registers

implemented

or up to date

60%

mitigation

actions in

the risk

registers

implement

ed or up to

date

70%

mitigation

actions in

the risk

registers

implement

ed or up to

date

Internal audit quarterly report

Audit and Risk Committee approving risk registers

20 Creat

e an

hones

t and

transp

arent

City

that

fights

corru

ption.

Good clean

governance

with a focus

on

eliminating

corruption

% of pre-

determined

objectives

approved

57% 85% Strategy

improvem

ent plans

- - 85% of

predeter

mined

objective

s

achieved

85% of

predetermine

d objectives

achieved

85% of

predetermi

ned

objectives

achieved

85% of

predetermi

ned

objectives

achieved

Quarterly performance assessment report

Internally audited portfolio of evidence file

35 | P a g e

National outcome: An efficient, effective and development-oriented public service

Johannesburg 2040 outcome: Enhanced, quality services and sustainable environmental practices.

PROGRAMME 6:TECHNOLOGY AND BUSINESS ENABLEMENT

No PIP Metrobus

Key

Performan

ce

Outcome

Key

Performan

ce

Indicator

Baseline Target

2018/19

Key

Interventi

ons

2018/19 Budget

per programme

2017/18 Quarterly performance targets Evidence Means of

verificatio

n

Capex

R3. 5

million

Opex

R7.4

million

Q1 Q2 Q3 Q4

21 Create a

culture

of

enhance

d

service

delivery

with

pride.

Well

maintained

assets

100%

impleme

ntation of

Business

Continuit

y Plan

(BCP)

New 100%

impleme

ntation

of

Busines

s

Continuit

y Plan

(BCP)

Impleme

nt ICT

strategy

R3. 5

million

R4

million Implemen

tation plan

drafted

and

communic

ated

50%

impleme

ntation

of

Busines

s

Continuit

y Plan

(BCP)

80%

impleme

ntation

of

Busines

s

Continuit

y Plan

(BCP)

100%

impleme

ntation

of

Busines

s

Continuit

y Plan

(BCP)

ICT

quarterly

report

Implement

ation Plan

22 Create a

culture

of

enhance

d

service

delivery

with

pride delivery

with

pride.

Operational

excellence,

increased

reliability

and

accessibility

% User

satisfaction

index

50% 70 % User

satisfaction

index

achieved

Improve

ICT

services

experienc

e

internally

R3.4

milllion

N/A-

Annual

exercise

conducted

in quarter 4

N/A Annual

exercise

conducted

in quarter 4

N/A Annual

exercise

conducted

in quarter 4

Conduct

user

satisfaction

survey and

achieve

70%

satisfaction

index

ICT

services

catalogue

with clear

services

standards

and

SOPs

User

satisfaction

survey

report

36 | P a g e

National outcome: An efficient, effective and development-oriented public service

Johannesburg 2040 outcome: Enhanced, quality services and sustainable environmental practices.

PROGRAMME 7: INSTITUTIONAL PLANNING, TRANSFORMATION AND ORGANISATIONAL DEVELOPMENT

No PIP Metrobus

Key

Performan

ce

Outcome

Key

Performan

ce

Indicator

Baseline Target

2018/19

Key

Interventi

ons

2018/19 Budget

per programme

2017/18 Quarterly performance targets Evidence Means of

verificatio

n

Capex

R6.7

million

R

.

Opex

R.7

million

Q1 Q2 Q3 Q4

23 Create

a

culture

of

enhanc

ed

service

delivery

with

pride.

Capacitate

d,

committed

and

performanc

e driven

employees

Review of

current

Human

Resources

policies to

reflect the

City Group

focus New

75%

review of

current

75%

review of

HR

Policies

and

Strategies

and

aligning

same to

CoJ Group

HR Strata

75%

review

of HR

Policies

and

Strategi

es

R2.7

million

Documenta

tion of all

HR

Policies

and

Strategies

and

identificatio

n of gaps

25%

review of

HR

Policies

and

Strategies

50%

review of

HR

Policies

and

Strategies

75%

review of

HR

Policies

and

Strategies

nes

Quarterly

schedule

s for

quarterly

performa

nce

assessm

ents

Portfolio of

evidences

for

individual

senior and

middle

performanc

e

assessmen

ts

24 Create

a

culture

of

enhanc

ed

service

delivery

with

pride.

Capacitat

ed,

committed

and

performan

ce driven

employee

s

%

employee

satisfactio

n index

New 50%

employee

satisfactio

n index

achieved

On-going

engagem

ents with

employe

es

R6.7

million

R4

million

N/A-

Annual

exercise

conducted

in quarter

4

N/A

Annual

exercise

conducte

d in

quarter 4

N/A

Annual

exercise

conducte

d in

quarter 4

50%

employee

satisfactio

n index

achieved

Employe

e

satisfacti

on

survey

Employee

satisfactio

n survey

report

37 | P a g e

5. 5 Service Standards

On an annual basis all City of Johannesburg’s entities including Metrobus enter into a Service Delivery Agreement (SDA) in respect of the Municipal Services

rendered by the Municipal entities on behalf of the City. The SDA serves to outline and strengthen the accountability of the entities to the City with respect to

the service delivery mandate of the entities. Below are service standards for Metrobus as agreed:

Core Service Service Level Standard

Annual Target

Q1 Target

Q2Target

Q3 Target

Q4 Target

% of scheduled

public bus trip

arriving on time

95% arrival times

95% arrival times 95% arrival times 95% arrival times 95% arrival times

Bus timetable 95-100% adherence to daily bus

schedule (<5 min headway)

95-100% adherence to

daily bus schedule (<5

min headway)

95-100% adherence to

daily bus schedule (<5

min headway)

95-100% adherence to

daily bus schedule (<5

min headway)

95-100% adherence to

daily bus schedule (<5

min headway)

Safety of

commuters

100% compliance to health and

safety legislation

100% compliance to

health and safety

legislation

100% compliance to

health and safety

legislation

100% compliance to

health and safety

legislation

100% compliance to

health and safety

legislation

Enforcing of bus seating-standing

in line with applicable regulations

Enforcing of bus

seating-standing in line

with applicable

regulations

Enforcing of bus

seating-standing in line

with applicable

regulations

Enforcing of bus

seating-standing in line

with applicable

regulations

Enforcing of bus

seating-standing in line

with applicable

regulations

Response time

for walk in

queries

All queries acknowledged within 1

hour

All queries

acknowledged within 1

hour

All queries

acknowledged within 1

hour

All queries

acknowledged within 1

hour

All queries

acknowledged within 1

hour

38 | P a g e

6. FINANCIAL IMPACT

The approved budget to fund the2018/19 business plan is as follows:

Details Budget Funding Source

R 000 R 000 R 000 R 000

S/holder Loan Subsidy Own Revenue / Reserves

OPEX 752 954 - 575 567 177 387

CAPEX 40 250 40 250

6.1 Metrobus Historical Performance

YEAR

Increase / (Decrease)

YEAR Increase / (Decrease)

YEAR

2017/18 2016/17 2015/16

R % R % R

Revenue Projected Actual Actual

Rendering of Services 166183900 64% 101060786 -5% 105878682

Miscellaneous other revenue 1320100 -88% 10885097 46% 7473676

Grant 504212000 -3% 521742252 21% 432693000

Total Revenue 671716000 6% 633688135 16% 546045358

Expenditure

Personnel -325200857 9% -299389595 6% -282554327

Depreciation and amortisation -74068000 14% -64924351 26% -51374327

Finance Costs -68703000 0% -68887800 88% -36567139

Repairs and maintenance -69413000 43% -48609286 -8% -52682456

General expenses -60614210 -33% -90980686 5% -86932558

Diesel -63260934 -13% -72604688 21% -60066226

Insurance expense -10456000 95% -5364255 1% -5327724

Total Expenditure -671716000 3% -650760661 13% -575504757

Operating (Deficit)/Surplus

0 -100% -17072526 -42% -29459399

Loss on disposal of assets and liabilities -100% -2248668 -36% -3517085

Capital Grant - Prov 10000000 #DIV/0!

(Deficit)/Surplus for the year 10000000 -152% -19321194 -41% -32976484

39 | P a g e

Rendering of Services refers to revenue generated from the daily scheduled trips.

Miscellaneous other revenue refers to revenue that the entity generates from other sources such as advertising corporate contracts and provincial contracts.

Table 6.1: Increases of key line items over the past four years

Description Total Increase Average Annual

Increase

Total expenditure 20% 5%

Personnel costs 24% 6%

Diesel -16% -4%

R&M -32% -8%

Grant (Subsidies) 58% 15%

Rendering of service (Fare revenue) -10% -3%

The historical performance clearly highlights that over the past three (3) financial years the company has suffered huge financial losses. This is mainly attributable to the actual fare revenue received by the Company which was lower than budgeted for the increasing costs of repairs and maintenance as well as the expenditure on diesel. The cost of repairs and maintenance has significantly increased over the three year period. The increase in the maintenance costs is as a result of the aged fleet. The aged fleet further leads to increased diesel consumption. Repairs and maintenance increased by 64% over the past three years. The cost of diesel and bus parts contributes to the negative financial situation experienced by the company. The volatility and steady weakening of the rand affects the cost of diesel and bus parts. In general diesel has increased by 61% over the three year period. Two key projects namely the implementation of the new revenue management plan and procurement of new buses is in progress. The procurement of new buses initiated in the 2014/15 financial year is anticipated to reduce the maintenance cost of the fleet and the fuel consumption. The new buses will not be reliant on fossil fuels only but will be powered by Compressed Natural Gas. 6.2 Metrobus Projected future Income Statements

Projected YEAR YEAR YEAR

2020/21 2019/20 2018/19

Rendering of Services 194177000 186494000 176939000

Miscellaneous other revenue 500000 472000 448000

Grant 673068000 612667000 575567000

Total Revenue 867745000 799633000 752954000

40 | P a g e

Expenditure

Personnel -377541000 -354833000 -334432000

Depreciation and amortisation -83855000 -79183000 -78067000

Finance Costs -100555000 -98805000 -91291000

Repairs and maintenance -84215000 -79523000 -58809000

General expenses -97206000 -91784000 -86657000

Diesel -75686000 -71469000 -67807000

Insurance expense -12301000 -11616000 -11021000

Total Expenditure -831359000 -787213000 -728084000

Operating (Deficit)/Surplus 36386000 12420000 24870000

Loss on disposal of assets and liabilities

(Deficit)/Surplus for the year 36386000 12420000 24870000

The largest portion of the Metrobus revenue comes from a subsidy. As is the case with most public

transport entities public transport is subsidised however the subsidy does not necessarily reflect the

economic realities. The subsidy increases over the past few financial years and for the coming

financial years is much lower than the increased costs. Furthermore since the subsidy did not

dramatically increase when mainly diesel increased three years ago costs the inflation related

increases currently are from a lower base which exacerbates the losses suffered by Metrobus.

Operating costs are expected to increase by inflation related percentage over the next three financial

years and the acquisition of new buses will also ensure that Metrobus meets its cost commitments

even if the rand further weakens. The dramatic increase in fare revenue will be achieved through the

acquisition of a new fare collection system which will both reduce pilferage and increase the fare

collected per kilometre.

6.3 Metrobus Projected future Balance Sheet and Cash flow statements

YEAR YEAR YEAR YEAR

2020/21 2019/20 2018/19 2017/18

R R R R

Budget Budget Budget Budget

Assets

R R R R

NON-CURRENT ASSETS 785714370 852403461 835034265 655306636

FIXED ASSETS 656726691 712746323 683450359 625400359

Loans to shareholders 28018168 27468792 26930188 26402145

Intangible Assets 100969512 112188346 124653718 3504131

CURRENT ASSETS 34552364 36643373 38949499 41493021

Inventories 15999015 17776684 19751871 21946523

41 | P a g e

Trade Debtors 4402858 4274620 4150116 4029239

Prepayment 7187630 7409928 7639101 7875362

Insurance Fund 6781568 6991308 7207534 7430447

Cash & Cash Equivalents 181292 190834 200878 211450

Total assets 820266734 889046834 873983764 696799657

Equity & Liabilities

CAPITAL & RESERVES -150785502 -179295200 -187647772 -198109925

Share Capital 54774330 54774330 50090312 54774330

Revaluation surplus 70886716 78763017 87514464 97238293

Accumulated Profit(Loss) -276446548 -312832548 -325252548 -350122548

NON-CURRENT LIABILITIES 351831664 417879406 409013524 277282402

Interest Bearing Debt 333626555 400083193 391613992 260267490

Retirement Benefit Obligation 17806893 17372578 16948857 16535470 Finance lease obligation capital 398217 423635 450675 479442

Provisions

CURRENT LIABILITIES 619220572 650462628 652618013 617627180

Trade Creditors 58141523 68401792 80472696 94673760

Loans from Shareholders 519467597 542076479 533691136 486490077 Finance lease obligation current 1152079 1212715 1276542 790423

VAT Payable

Other Financial Liabilities 33148754 31570242 30066897 28635140

Provisions 3480287 3252605 3039818 2840951

Deferred Income 3830333 3948797 4070924 4196829

Total equity & liabilities 820266734 889046834 873983764 696799657

YEAR YEAR YEAR YEAR YEAR

2020/21 2019/20 2018/19 2017/18 2016/17

Net Cash Flow from Operating Activities 11275933

1 90417860 49567202 33240429 19126889

9

Grants & subsidies 67306800

0 61266700

0 57556700

0 50421200

0 50635400

8

Other income 19467700

0 18696600

0 17738700

0 16750400

0 11106078

7

867745000

799633000

752954000

671716000

617414795

Employee costs

-37754100

0

-35483300

0

-33443200

0

-32520085

7

-24499219

9

Suppliers

-27688966

9

-25557714

0

-27766379

8

-24457171

4

-11226589

7

42 | P a g e

Finance costs

-10055500

0 -98805000 -91291000 -68703000 -68887800

-75498566

9

-70921514

0

-70338679

8

-63847557

1

-42614589

6

Cash Employed in Investment Activities -23731568

-10869973

9

-22946622

6 -31738865

-18698023

9

Expanding of Capital Base -16950000

-10849000

0

-22925000

0 -29750000

-18377422

9

Movement of insurance fund -6781568 -209739 -216226 -1988865 -3206010

Cash Consequences of Financing Activities -89037304 18271835

179888451 -1629571 -4126482

Other financial liabilities -64878127 9972547 13277825

9 -35522683 -29825422

Movement of sweeping account -22608882 8385343 47201060 34940903 26987587

Finance lease payments -1550296 -86054 -90868 -1047790 -1288647

CASH FLOW FROM ACTIVITIES -9542 -10044 -10573 -128007 162178

Net Increase / (Decrease) in Cash & Bank Balances -9542 -10044 -10573 -128007 162178

Cash & Bank Balances Beginning of the Year 190834 200878 211450 339457 177279

Cash & Bank Balances End of the Period 181292 190834 200878 211450 339457

Metrobus operates on a sweeping account that is controlled by the City of Johannesburg (CoJ) and

does not keep bank balances. Any cash profits or losses are consolidated in the CoJ. The cash flows

remain erratic being affected by the low revenue base increase in diesel costs and repairs and

maintenance costs and payments towards leased buses/loans. The organization continues to depend

on the overdraft from CoJ to fund it operations and CAPEX.

The largest change in the balance sheet is the acquisition of new buses which will both raise the

asset base of the company and increase its liabilities. The buses will however reduce the losses

suffered in the recent past and if the projected operating cash flows are met the liabilities of the

company should start to reduce dramatically from the 2017 financial year onwards.

6.3.1 : Ratio Analysis

2020/21 2019/20 2018/19 2017/18 2016/17

Budget Budget Budget Projected Actual

Profitability Ratios

Return on Assets (Revenue over assets) 132% 112% 110% 107% 95%

Internally generated revenue as a percentage of total expenditure 23% 24% 24% 25% 17%

Internally generated revenue as a percentage of total revenue 22% 23% 24% 25% 18%

Liquidity Ratios

43 | P a g e

Current Ratio 6% 6% 6% 7% 6%

Acid-test ratio 3% 3% 3% 3% 3%

Activity ratios (Efficiency ratios)

Fixed Asset turnover 76% 89% 91% 93% 105%

Debt ratios

Debt ratio 118% 120% 121% 128% 127%

Long-term debt to equity -233% -233% -218% -140% -157%

Growths

Asset growth -8% 2% 25% -5% -

Overdraft growth -100% -4% 2% 18% -

The major contributing factor to the ratios above is the acquisition of new buses and the increased fares anticipated due to the implementation of a new fare collection system.

The profitability ratios are expected to increase although revenue as a percentage of assets is expected to decrease because of the current low asset base.

Liquidity ratio’s and debt ratios remain very low. The norm for the current ratio and the acid ratio is 200% and 100% respectively. The ratios remain fairly constant over the projected future; however the full impact of the bus refurbishment and replacement program will only be felt in the medium term (next 5-10years). The cost of existing debt also decreases these ratios as debt is currently being repaid using the overdraft total debt are thus not reduced. 6.4 CAPITAL PROJECTS The following are the main Capital projects proposed for 2018/19 financial year (R’000):

Name of Project

Amount Funding

(R'000) Source

Bus Refurbishment 25 000 External loans

Engine and Gear box refurbishment 5 000 External loans

IT Equipment, New Computers and Hardware Computer

Hardware 3 500 External loans

Building - Building Alterations/Upgrade 4 000 External loans

Furniture and Office Equipment R 750 External loans

Plant and Machinery 2 000 External loans

TOTAL 40 250

In line with the transformation process Metrobus is embarking on a finance logic model provided

below.

44 | P a g e

Finance Logic Model

Problem Statement: The organisation is not financially viable due to structural built within the organisation as well as the balance between the social and business aspects

Level of implementation of the

marketing plan

Improved Fare Revenue

Collection

Implement Standard Operating Procedures

Enhanced f inancial

sustainability

Level of implementation of the

AFC

OUTPUTS ULTIMATE OUTCOME

Rand value reduction in wastage

INTERMEDIATE OUTCOME

Improved Financial Viability

DIRECT OUTCOME

Enhanced Governance Framework

Increased Revenue Streams

Improved Expenditure Efficiency

Revenue Strategy developed by

target date

Value for money assessment

completed by target date

Level of implementation of

Internal/AG Findings

Implement Cost Containment Strategy

Level of implementation of the

demand management plan

Implement a Research and Development Centre for InnovationFinancial Business Case for R&D

Centre completed by target date

Financial policies reviewed by

target date

Improved Compliance to Financial Management and

Reporting

Enhanced Funding Model Restructuring of the balance

sheet completed by target date

Level of implementation of the

Revenue Strategy

Financial processes

reviewed/developed by target date

Level of implementation of the

Internal Control Framework

45 | P a g e

7. MANAGEMENT AND ORGANISATION STRUCTURE

7.1 Organisation structure

A new structure introducing the concept of Corporate Services for the Company was recently

approved by the Board of Metrobus. In essence this structure has the following implications:

A new position of General Manager: Corporate Services is introduced and is still vacant;

A new function of Facilities Manager is introduced and numerous functions that were lying loose,

i.e. Cleaning, switchboard etc. are brought into the fold of this new function;

The following functions HRD, ER, SHE, Employee Wellness etc. are streamlined and redefined to

suit the needs of Metrobus

Figure 7.1: High Level Organizational Structure

7.2 Management Team

Albeit that three positions within the newly established structure are vacant, the new structure is

balanced in terms of its management team. The challenge therefore is for Metrobus to acquire the

right skills for the function that will drive the change programmes for a future Metrobus.

7.3 Capacity analyses

It is still early days in the implementation of the new structure to meaningfully provide a well thought

analysis of the current capacity and the gaps that may exist in the new structure. The structure needs

to be embedded, employees placed, vacancies filled, following which an analysis will be possible and

informed inputs can then be made

Board of Directors

Managing Director

GM: Technical

GM: Operations GM: HR

Chief Information

Officer

Chief Financial Officer

Chief Auditor

Executive

Company Secretary

Strategic Support

MMC for Transport

46 | P a g e

3.4.1: Review of the Current Organisational Structure to be aligned to Metrobus Strategy

Metrobus organisational structure is not aligned to Metrobus mandate and strategy resulting in misalignment for effective management, functional and

operational competencies and skills. Below is the People Logic model that Metrobus will implement in line with the entity’s transformation drive.

People Logic Model

Problem Statement: Organisational Structure not aligned to Metrobus Mandate and Strategy resulting in misalignment in ineffective management, functional and operational competencies and skills

Job Descriptions reviewed by

target date

Revised Organisational Structure that is aligned to the Turnaround Strategy

Increased implementation of HR Strategy and Talent Management

High Performing Organisation

Current structure revised by target

date

OUTPUTS ULTIMATE OUTCOME

Performance contracts reviewed

and cascaded by target date

INTERMEDIATE OUTCOME

Improved staff establishment as

per the Organisational Structure

DIRECT OUTCOME

Improved Organisational Culture to support the Execution of

Strategy

Increased alignment between the job requirements and skills

level of staff

Improved staff Productivity Levels

Job Evaluations conducted by

target date

Rewards and Recognition Policies

reviewed by target date

Employee survey conducted by

target date

Increased rollout of the performance Management System to staff

PMS Policy and Framework

developed/reviewed by target date

Increased implementation of performance reward and retention strategyReward and Recognition

Framework developed by target

date

Talent Mgt Policy reviewed by

target date

Improved Organistational Culture

Org Structure aligned to the

current strategy

Retention Mgt Strategy reviewed

by target date

Benchmarked salary scaled

implemented by target date

Change Mgt Interventions

implemented

47 | P a g e

7.4 Employment Equity

Employment equity remains the single most important challenge for Metrobus. The bus industry in

general is a male dominated industry. Often times employers in the industry are faced with an

oversupply of male employees especially among the previously disadvantaged communities, whilst

challenged to be able to attract female employees and owing to the nature and focus of the business,

it is even more difficult to attract people with disabilities as well.

Metrobus introduced a female focus programme to attract and retain female drivers and this

programme needs to be supported with funding to ensure expansion and success.

8. RISK MANAGEMENT

Metrobus has established and maintains a system of risk management in accordance with the

provisions of the Municipal Finance Management Act, the King III report on Corporate Governance

and risk management standards as applicable

The company performed the Strategic Risk Assessment during the first quarter. The assessment was

based on the business plan and KPI’s for 2017/18 Financial Year. The assessments concentrated on

KPIs that support the entity’s business objectives and the core functions of the divisions, comments

from management reports, AG reports and Internal Audit reports in the pre-identification were also

considered. These were conducted in order to give management a realistic perspective of material

risks facing the organization as well as to support the Risk based internal audit plan.

Strategic Objectives Strategic Objective impacted

IR

RR

Action Plan Due Date

1. Funding from the shareholder to recapitalise Metrobus.

Hig

h

Me

diu

m

Operational Excellence

- Availability of fit for purpose busses. - Availability of engaged and competent human capital. - Availability of appropriate technology that is required to operate. - Proper understanding of our customer needs. - Recapitalisation of our vehicle fleet.

1. Acquisition of a revenue management system. 2. Currently negotiating and investigating funding model options for Metrobus with the City of Johannesburg. Current options are, cancelling interest charges, taking busses onto the City's balance sheet or converting loans to equity.

1. 31/01/2019 2. 30/06/2019

48 | P a g e

Strategic Objectives Strategic Objective impacted

IR

RR

Action Plan Due Date

2. Investment in Technology.

Hig

h

Me

diu

m

Technology and Business Enablement

- Funding available to implement a technology platform. - Buy-in from the shareholder for the preferred technology platform. - Available skills and expertise to implement the preferred technology platform.

1. Issue and conclude on the tender for the technology overhaul. 2. Conduct ongoing training on the new technology platform. 3. Implementation of the ICT infrastructure which covers servers, networking equipment and advanced security infrastructure.

1. 30/11/2018 2. Ongoing 3. 30/06/2019

3. Operating as a going concern.

Hig

h

Hig

h

Financial Management and Sustainability

- Achieve cost recovery targets. - Ability to exploit alternative revenue streams e.g. advertising. - Resolution around debt owed to the City (conversion to equity). - Continuous subsidisation by the City. - Shareholder acceptance of fare pricing structures.

1. Currently negotiating and investigating funding model options for Metrobus with the City of Johannesburg. Current options are, cancelling interest charges, taking busses onto the City's balance sheet or converting loans to equity.

2018/12/31

4. Business continuity.

Hig

h

Hig

h

Operational Excellence

- Availability of fit for purpose busses. - Availability of engaged and competent human capital. - Availability of appropriate technology that is required to operate. - Proper understanding of our customer needs. - Recapitalisation of our vehicle fleet.

1. Update the disaster recovery plan in line with the new technology that is being implemented. 2. Conduct a full business continuity simulation and report on the results. 3. Conduct regular emergency evacuation drills.

1. 30/03/2019 2. 30/06/2019 3. Quarterly

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Strategic Objectives Strategic Objective impacted

IR

RR

Action Plan Due Date

5. Acceptance of the fee per kilometre pricing model.

Hig

h

Hig

h

Institutional Planning, transformation and Organizational development.

- Operational readiness to operate under the fee per Km - Penalties on missed trips - Buy-in from various stakeholders including labour. - Assumption that the organisation will continue to operate in its current form.

1. Currently negotiating a fee per kilometre pricing model with the City of Johannesburg.

1. 30/06/2018

6. Route occupancy

levels.

Hig

h

Me

diu

m

Operational Excellence

- Availability of fit for purpose busses. - Availability of engaged and competent human capital. - Availability of appropriate technology that is required to operate. - Proper understanding of our customer needs. - Recapitalisation of our vehicle fleet.

1. Conduct a review of shifts to ensure that busses are fit for purpose on routes. 2. Implementation of the Vaya Moja. 3. Exit routes that are not profitable.

1. 30/11/2018 2. 15/10/2018 3. Ongoing

7. Maintaining a skilled and productive workforce.

Hig

h

Me

diu

m

Institutional Planning, transformation and Organizational development.

- Fee per kilometre will be implemented. - Buy-in from various stakeholders including labour. - Assumption that the organisation will continue to operate in its current form.

1. Approve the HR strategy. 2. Develop and implement an HR policy to support the implementation of the HR Strategy. 3. Review reward, recognition and remuneration to remain competitive in the market.

1, 30 Nov 2018 2. 30 Sept 2018 3. 30 Sept 2018

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Strategic Objectives Strategic Objective impacted

IR

RR

Action Plan Due Date

8. Organisational design and structure.

Me

diu

m

Me

diu

m

Institutional Planning, transformation and Organizational development.

- Fee per kilometre will be implemented. - Buy-in from various stakeholders including labour. - Assumption that the organisation will continue to operate in its current form.

1. Reviewing the organisational structure in line with the new strategic plan that is currently in progress. 2. Review and update the job descriptions and profiles in line with the new organisational structure - this would include implementing a job grading system. 3. Review reward, recognition and remuneration to remain competitive in the market.

1. 30 June 2019 2. 30 June 2019 3. 30 Sept 2018

9. Sustainability and affordability of green technologies.

Me

diu

m

Me

diu

m

Innovation and the Green Economy

- Support from the City of our green agenda as part of their Environmental Sustainability initiatives. - Reduction of Metrobus' carbon footprint. - Reduction in running costs of gas fuelled busses. - Capacity to research appropriate green technologies.

1. Entering in an Agreement with NGV in order to get knowledge how to manage Gas Technology in the company in terms of equipment operation, installation and maintenance. 2. Recruiting a Gas specialist

1. 30 December 2018 2. 28 February 2019

9. BUSINESS PLAN PERFORMANCE MONITORING

Metrobus’ Business Plan is a blueprint for the entity to improve its public transportation service in

meaningful and measurable ways. Performance monitoring helps the entity to evaluate its progress,

plan budget for the future, and improve its current performance levels. This section gives an overview

of how Metrobus and its stakeholders can measure the progress and impacts of the business plan.

9.1 Performance Reporting Reporting for this plan will support and enhance Metrobus’ ongoing measurement and use of performance data for decision making purposes and planning. A Performance Information and Reporting manual has been developed and is being implemented to assist in this area.

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Performance reporting involves a suite of reports to various target audiences for a range of purposes. The key elements are the quarterly performance reports to management, the Audit Committee, the Board, and the shareholder structures as well as annual reports. 9.2 Measuring the business plan This plan provides for performance measurement at three levels:

Objectives

Key Performance Indicators

Outcomes Metrobus performance scorecard provides a more detailed description of these measurement levels and potential associated measures. Metrobus will report on the business plan measures on a quarterly basis, and/or as when required and will update this section of the plan as necessary to improve performance monitoring.