Abstract:
Public transport investment is expected to unlock economic benefits on the back of
enhanced worker mobility and creating network capacity for urban development. However,
the costs of these projects can be substantial and – in the context of South Africa – rely
largely on national grant funding. This paper explores mechanisms for leveraging the
benefits of public transport projects to unlock innovative funding sources and alleviate
pressure on grant funding. Increased accessibility of land arising from public transport
provision is capitalised into property value increments, which accrue to existing owners.
Land value capture mechanisms seek to capture a share of this increment through
partnership with the private sector. International and local examples demonstrate how land
value capture instruments can offset some or all of the costs of public transport projects.
Beyond land value capture, public transport is also eligible for climate change mitigation
funding and financing on the grounds of its role in carbon emission reduction strategies.
While the income from these funding initiatives is unlikely to replace the need for grant
funding, it can alleviate pressure on the fiscus.
