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The purpose of this paper is to assess the need for application of automatic vehicle location to the Cairo Transport Authority bus fleet. Applying an automatic vehicle location system will improve public transport productivity, efficiency and safety. Five Cairo Transport Authority bus depots have been selected for the system implementation. The total cost of the system is estimated as 5 018 992. Economic benefits of the system are estimated as well as its social benefits. Three scenarios of Cairo Transport Authority revenue increase are analysed. Results indicate a payback for the system within 3–15 years. A proposed score system has been applied for setting priorities to bus routes for automatic vehicle location application based on bus operating indicators. Three stages have been identified with first, second and third priority based on the discriminant analysis classification method. The power of the discriminant classification method has been checked through Wilks' Lambda value which was found to be 0·21 (good discrimination), and approximate F value which was found to be 27·201 at p < 0·000 0. Regarding discriminatory variables, their contributions have been checked and found to be acceptable. Results indicate that the three stages contain 7, 63 and 50 bus routes, respectively. Some funding policies have been suggested.

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