Cape Town: MyCiTi Public Transport Network Grant Phase-Out Looms

• The national government is phasing out the Public Transport Network Grant (PTNG) by 2027/28, which was the primary funding source for Cape Town's MyCiTi bus network.
• The Treasury justified the withdrawal by stating the grant underperformed nationally and did not improve public transport access relative to investment, as noted by Minister Enoch Godongwana.
• Cape Town's MyCiTi system, which has seen 68% growth since 2021 and recorded over 19 million annual passenger journeys, faces significant uncertainty for its future expansion and operational sustainability.
• While R2.2-billion of the original R7.1-billion PTNG allocation remains until June 2028 for current projects, the absence of national funding thereafter creates a critical gap for Cape Town urban mobility funding.
• The City of Cape Town is seeking long-term funding certainty and performance-based mechanisms, even as its own planning documents show continued reliance on the phased-out grant, highlighting the MyCiTi bus funding uncertainty.

This situation underscores the urgent need for lawyers advising municipalities, infrastructure developers, or public transport operators in South Africa to assess the financial and contractual implications of the Public Transport Network Grant (PTNG) phase-out, particularly for projects reliant on national funding.

The national government in South Africa is set to discontinue the Public Transport Network Grant (PTNG) by the 2027/28 financial year, a move that significantly jeopardizes the future of Cape Town's MyCiTi bus system. This grant has historically served as the primary financial mechanism for both the operation and expansion of the MyCiTi network. The decision stems from a national assessment by the Treasury, which concluded that the grant has not achieved its intended objectives across the country.

Minister of Finance Enoch Godongwana articulated in his February Budget speech that the grant failed to enhance public transport accessibility commensurate with the substantial investments made. This withdrawal is part of a broader governmental initiative to achieve R12-billion in savings by eliminating inefficient and underperforming programs. Further reinforcing this stance, Transport Minister Barbara Creecy informed a portfolio committee in June that the grant was indeed underperforming and not fulfilling its original purpose. An illustrative example of this national underperformance includes Pietermaritzburg, which reportedly expended R1-billion from the grant on a bus system that never became operational.

Despite national concerns about the Public Transport Network Grant's efficacy, the City of Cape Town asserts that its MyCiTi system stands as a successful model. Rob Quintas, the city's Mayco member for urban mobility, acknowledged that while some Bus Rapid Transit (BRT) systems in other South African metros and large towns have indeed failed, with billions allocated without a single scheduled service commencing, MyCiTi has demonstrably succeeded. He emphasized that discontinuing the grant would negatively impact the network's future expansion, its operational viability, and the continuity of existing services.

The planned phase 2A expansion, targeting the Cape Flats and scheduled to commence in July 2027, is particularly at risk. This expansion is designed to serve over 1.4 million residents across 30 distinct neighborhoods, including areas like Mitchells Plain, Khayelitsha, Wynberg, and Claremont. MyCiTi has recorded more than 19 million passenger journeys annually over the past two financial years, showcasing a substantial 68% growth since 2021. Audited statistics for June 2026 further highlight this success, indicating 1.6 million passenger journeys, an increase of over 30,000 from June 2025.

While the initial R7.1-billion in Public Transport Network Grant funding allocated to Cape Town for a ten-year period in 2018 remains in place until June 2028, with R2.2-billion still available, the long-term outlook is precarious. This remaining allocation is earmarked for critical projects such as the MyCiTi phase 2A capital infrastructure, the construction of the metro-south east corridor, and the development of MyCiTi depots and stations. However, the cessation of PTNG funding after 2028 introduces significant uncertainty regarding the system's long-term sustainability and its capacity for future expansion, as noted by Quintas.

In response to this impending funding gap, the City Council has approved a maximum contribution of 5% from rates towards direct expenditure once phase 2A becomes operational. The city is actively exploring various mitigation strategies, including internal cost-saving measures, though officials stress these cannot fully substitute for consistent national funding. Cape Town does not oppose the proposed establishment of a new Public Transport Fund to replace the PTNG and other funding streams; however, it advocates for long-term certainty and performance-based funding mechanisms for successful programs like MyCiTi. Mayor Geordin Hill-Lewis issued a statement in May, warning that funding cuts and uncertainties are placing both the new Cape Flats route and the entire MyCiTi service at considerable risk. Adam Narain, from #UniteBehind, pointed out that the City's draft integrated transport plan, while acknowledging the grant phase-out in a footnote, paradoxically continues to budget for PTNG funds for capital and operations until 2030/31, suggesting a reliance on funds that may not materialize. This situation underscores the urgent need for lawyers advising municipalities, infrastructure developers, or public transport operators in South Africa to assess the financial and contractual implications of the Public Transport Network Grant (PTNG) phase-out, particularly for projects reliant on national funding. This development necessitates a review of long-term financial sustainability plans, risk assessments for ongoing and future projects, and potential renegotiation of agreements impacted by this significant shift in government funding policy.

Lawyers advising municipalities, infrastructure developers, or public transport operators in South Africa should assess the financial and contractual implications of the Public Transport Network Grant (PTNG) phase-out, particularly for projects reliant on national funding. This development necessitates a review of long-term financial sustainability plans, risk assessments for ongoing and future projects, and potential renegotiation of agreements impacted by this significant shift in government funding policy.

Source: Original reporting via news reports