Gautrain Rapid Gautrain Rapid Rail LinkRail Link

Parliamentary Presentation toParliamentary Presentation toTransport Portfolio CommitteeTransport Portfolio Committee

Jack van der Merwe (Pr. Eng)Jack van der Merwe (Pr. Eng)Project Leader: GautrainProject Leader: Gautrain

Chief Executive: Public Private PartnershipsChief Executive: Public Private PartnershipsGauteng Provincial GovernmentGauteng Provincial Government

8 November 20058 November 2005

ContentContent

Background, rational & objectivesBackground, rational & objectives

System overviewSystem overview

PPP processPPP process

Selection of preferred bidderSelection of preferred bidder

Financial liabilitiesFinancial liabilities

Public transport integrationPublic transport integration

Way forwardWay forward

Background, Rational Background, Rational & Objectives& Objectives

Background Background

The Powerhouse of AfricaThe Powerhouse of Africa

Gauteng is:Gauteng is:

– Less than 2% of Country’s surface areaLess than 2% of Country’s surface area

– Home to 70% of the SA’s workforce and is responsible for Home to 70% of the SA’s workforce and is responsible for 49.6% of all employee remuneration 49.6% of all employee remuneration

– Accounts for some 33% of GDP of South AfricaAccounts for some 33% of GDP of South Africa

– Accounts for about 10% of Africa's GDP and is the fourth Accounts for about 10% of Africa's GDP and is the fourth largest economy in Africalargest economy in Africa

– In the past five years, our provincial economy grew at an In the past five years, our provincial economy grew at an annual rate of 3.7%, increasing to over 5% in 2004 annual rate of 3.7%, increasing to over 5% in 2004

– FDI has grown from R450 million in 2001 to R1.5 billion in 2003 FDI has grown from R450 million in 2001 to R1.5 billion in 2003

– Most developed infrastructure in Africa Most developed infrastructure in Africa

– The population is expected to exceed 9 million by the endThe population is expected to exceed 9 million by the endof 2004 of 2004

Gauteng – EconomicGauteng – EconomicDevelopment StrategyDevelopment Strategy

Existing economic strengths :Existing economic strengths :

– MiningMining

– Heavy IndustryHeavy Industry

– Financial & Banking sectorFinancial & Banking sector

Proposed strategy:Proposed strategy:

– Smart industriesSmart industries - Gauteng the “smart- Gauteng the “smart”” Province Province

– Move toward high value-added manufacturing Move toward high value-added manufacturing

– Enhancing the business services (Finance & Banking) sector Enhancing the business services (Finance & Banking) sector and business tourismand business tourism

Rationale Rationale

MobilityMobility AccessibilityAccessibility MaintenanceMaintenance

TransportTransportChallengesChallenges

Share of Gauteng inShare of Gauteng inNational Vehicle FleetNational Vehicle Fleet

00

55

1010

1515

2020

2525

3030

3535

4040

ProvincesProvinces

Western CapeWestern Cape

Eastern CapeEastern Cape

Northern CapeNorthern Cape

Free StateFree State

KwaZulu-NatalKwaZulu-Natal

North West ProvinceNorth West Province

GautengGauteng

MpumalangaMpumalanga

Northern ProvinceNorthern Province

GautengGauteng

Gauteng Vehicles/kmGauteng Vehicles/km

00

5050

100100

150150

200200

250250

300300

350350

ProvincesProvinces

Western CapeWestern Cape

Eastern CapeEastern Cape

Northern CapeNorthern Cape

Free StateFree State

KwaZulu-NatalKwaZulu-Natal

North WestNorth West

GautengGauteng

MpumalangaMpumalangaNorthern ProvinceNorthern Province

GautengGauteng

TRENDTREND

Objectives of the Objectives of the Gautrain ProjectGautrain Project

Development Goals Development Goals

Economic growth, development and job creationEconomic growth, development and job creation

Must meet other goals of Government (SME Must meet other goals of Government (SME promotion, Business tourism, BEE, etc.)promotion, Business tourism, BEE, etc.)

To promote business tourism by means of the link To promote business tourism by means of the link between JIA and Sandtonbetween JIA and Sandton

Transportation Goals Transportation Goals

Alleviate severe traffic congestion (traffic volumes in corridor growing Alleviate severe traffic congestion (traffic volumes in corridor growing at 7% p.a. for more than a decade)at 7% p.a. for more than a decade)

Show Government’s commitment to the promotion of Show Government’s commitment to the promotion of public transport (National Land Transport public transport (National Land Transport Transitional Act, Act 22 of 2000) – Catalyst public transport projectTransitional Act, Act 22 of 2000) – Catalyst public transport project

Improve the image of public transport with this project and attract Improve the image of public transport with this project and attract more car users to public transportmore car users to public transport

To link to the Tshwane Ring Rail Project, linking Mamelodi, To link to the Tshwane Ring Rail Project, linking Mamelodi, Atteridgeville and Soshanguve / MabopaneAtteridgeville and Soshanguve / Mabopane

Part of holistic transport plan and network for GautengPart of holistic transport plan and network for Gauteng

Catalyst public transport project of national importanceCatalyst public transport project of national importance

2000 Northbound and Southbound 2000 Northbound and Southbound Vehicle VolumesVehicle Volumes

2005 Northbound and Southbound 2005 Northbound and Southbound Vehicle VolumesVehicle Volumes

GautrainGautrain

Gautrain is a flagship public transport project of national Gautrain is a flagship public transport project of national importance. It can be the catalyst to free existing resources importance. It can be the catalyst to free existing resources or to generate new resources to promote public transport or to generate new resources to promote public transport in a holistic fashionin a holistic fashion

Spatial Development and Urban Spatial Development and Urban Planning GoalsPlanning Goals

To contribute towards urban restructuring, shortening To contribute towards urban restructuring, shortening travel distances and improving city sustainabilitytravel distances and improving city sustainability

Stimulate the renovation and upliftment of the Stimulate the renovation and upliftment of the Johannesburg and Tshwane CBDsJohannesburg and Tshwane CBDs

Link the main economic nodes in Gauteng with JIALink the main economic nodes in Gauteng with JIA

Overview of the Overview of the Proposed SystemProposed System

Rosebank

SandtonMarlboro

Rhodesfield

JIA

Midrand

Centurion

Pretoria

Hatfield

Preferred Route

Anchor Stations

Stations

Airport

Park Station

Rosebank

Park Station

SandtonMarlboro

Midrand

Centurion

PretoriaHatfield

Rhodesfield

JIA

Technical SpecsTechnical Specs International standard gaugeInternational standard gauge

Maximum speed: 160 – 180 km / hMaximum speed: 160 – 180 km / h

Modern state of the art trainsModern state of the art trains

– Thus totally different from existing SA systemThus totally different from existing SA system

Different trains for commuters and air passengersDifferent trains for commuters and air passengers

Initial demand 134 000 passengers trips per dayInitial demand 134 000 passengers trips per day

Frequency every 10 – 30 minutesFrequency every 10 – 30 minutes

Minimum operating hours 05h30 – 20h30Minimum operating hours 05h30 – 20h30

Safety and securitySafety and security

Interesting Facts Interesting Facts (1)(1)

Approximately 104 new commuter rail coaches willApproximately 104 new commuter rail coaches willbe manufacturedbe manufactured

Approximately 250 new bus coaches will be usedApproximately 250 new bus coaches will be used

3,6 million train kilometres and 674 million 3,6 million train kilometres and 674 million passenger kilometres will be travelled per yearpassenger kilometres will be travelled per year

10,6 million bus kilometres will be travelled per year10,6 million bus kilometres will be travelled per year

There will be a train at least every 10 minutes during There will be a train at least every 10 minutes during the peak time at stations between Johannesburg the peak time at stations between Johannesburg and Pretoria.and Pretoria.

Interesting Facts Interesting Facts (2)(2)

260 000 concrete sleepers will be manufactured for 260 000 concrete sleepers will be manufactured for use in the trackuse in the track

20 000 tons of steel will be required to manufacture 20 000 tons of steel will be required to manufacture the steel rail trackthe steel rail track

112 000 m² of bridges and viaduct structures will be 112 000 m² of bridges and viaduct structures will be constructedconstructed

More than 9 000 new parking bays will be requiredMore than 9 000 new parking bays will be required

65 road intersections in the vicinity of stations will 65 road intersections in the vicinity of stations will be upgraded be upgraded

Market & Market & RidershipRidership

Market FocusMarket Focus

House-House-hold hold IncomeIncome

Transport mode (Commuters)Transport mode (Commuters)RailRail TaxiTaxi BusBus CarCar

Commuter Market FocusCommuter Market Focus

Project Target MarketProject Target Market

Initial demand 134 000 passengers trips per dayInitial demand 134 000 passengers trips per day

Car users (Attract with excellent service / competitive Car users (Attract with excellent service / competitive travel times)travel times)

Complementing existing transport modes Complementing existing transport modes (Taxi, Bus & Rail)(Taxi, Bus & Rail)

Cater for all trip purposes (Peak and off peak)Cater for all trip purposes (Peak and off peak)

International tourists and airline passengersInternational tourists and airline passengers

Feeder and Distribution ServicesFeeder and Distribution Services

Access to the Gautrain - one of the key success factorsAccess to the Gautrain - one of the key success factors

Initially a large part of the market segment not within Initially a large part of the market segment not within walking access of stationswalking access of stations

Provide dedicated bus services:Provide dedicated bus services:

– Door-to-door service and travel timeDoor-to-door service and travel time

– Convenience of transfersConvenience of transfers

– Same quality and Level of Service offered from point of access Same quality and Level of Service offered from point of access to “front door” at destination end of tripto “front door” at destination end of trip

– Integration with existing and other new systemsIntegration with existing and other new systems

Ample park and ride facilitiesAmple park and ride facilities

10 km radius10 km radius10 km radius10 km radius

5 km radius5 km radius5 km radius5 km radius

Rail Line & Rail Rail Line & Rail Operational AreaOperational Area

Station PrecinctStation Precinct

Dedicated FeedersDedicated Feeders

Dedicated DistributorDedicated Distributor

Existing PT ServiceExisting PT Service

Catchment areaCatchment area

Rail Line & Rail Rail Line & Rail Operational AreaOperational Area

Station PrecinctStation Precinct

Dedicated FeedersDedicated Feeders

Dedicated DistributorDedicated Distributor

Existing PT ServiceExisting PT Service

Catchment areaCatchment area

Legend:Legend:Legend:Legend:

ConceptConcept

Modelled Single Journey FareModelled Single Journey Fare

SERVICESERVICE ORIGINORIGIN DESTINATIONDESTINATION DISTANCEDISTANCE COSTCOST

CommuterCommuter PretoriaPretoria JohannesburgJohannesburg 57 km57 km R 16,40R 16,40

CommuterCommuter PretoriaPretoria SandtonSandton 46,8 km46,8 km R 14,36R 14,36

CommuterCommuter RhodesfieldRhodesfield SandtonSandton 19,0 km19,0 km R 9,08R 9,08

AirportAirport JIAJIA SandtonSandton 20,4 km20,4 km R 70,40R 70,40

Cost less than car, more than existing bus / taxi / railCost less than car, more than existing bus / taxi / rail

Number of jobs created Number of jobs created / sustained:/ sustained:• ConstructionConstruction : 93 000: 93 000• Operating and MaintenanceOperating and Maintenance : 2 700 p.a.: 2 700 p.a.• Urban economic activityUrban economic activity : 40 000 p.a: 40 000 p.a..

Increase in Gauteng GGP Increase in Gauteng GGP : 0,7 - 1% : 0,7 - 1%

Increased business salesIncreased business sales : R 6 billion : R 6 billion

What Will the Economic Impact Be?What Will the Economic Impact Be?

PPP ProcessPPP Process

Project ProcessProject Process

Fundamental PrinciplesFundamental Principles

– Multi-billion Rand projectMulti-billion Rand project

– Cannot be funded in total by GovernmentCannot be funded in total by Government

– Can only be developed as a Public-Private PartnershipCan only be developed as a Public-Private Partnership

• PPP project (BOT type project)PPP project (BOT type project)

– Must have political buy-in & the private sector must show Must have political buy-in & the private sector must show an appetite for the PPP projectan appetite for the PPP project

– Must comply with all legal requirementsMust comply with all legal requirements

Implementation ProcessImplementation Process Four pillarsFour pillars

– Political will & commitmentPolitical will & commitment

– Viable project (base case design)Viable project (base case design)

• TechnicalTechnical

• FinancialFinancial

• Legal/InstitutionalLegal/Institutional

– Funding (for Infrastructure & Operations)Funding (for Infrastructure & Operations)

• Government’s portionGovernment’s portion

• Private Sector’s portionPrivate Sector’s portion

– Community acceptance & Buy-inCommunity acceptance & Buy-in

• Socio-economic benefitsSocio-economic benefits

• Power of expropriationPower of expropriation

ProcessProcessEXPENDITUREEXPENDITURE INCOMEINCOME CONSULTANTSCONSULTANTS

ConsortiumConsortium

Banks & Financial

Institutions

Banks & Financial

Institutions

Equity &Financing

Financial Model (BOT)Financial Model (BOT)

Pre-Qualification & RFPPre-Qualification & RFP

Final selection of bidderFinal selection of bidder

Financial ClosureFinancial Closure

ConstructionConstruction

CommissioningCommissioning

Civil WorksCivil

WorksElec. / Mech.Elec. / Mech.

Station &

Feeder

Station &

Feeder

Land & EIA

Land & EIA

Rolling Stock

Rolling Stock

Operate &

Maintain

Operate &

Maintain

FeasibilityFeasibility

En

gin

eering

, To

wn

Plan

nin

g an

d E

con

om

ic Develo

pm

ent

Fin

ancial an

d B

ankin

g

Leg

al and

Institu

tion

al

Authorisation

PPP-U3

Contractors

Modeling Rider ship

Modeling Rider ship

Value Add

Value Add

Operator RollingStock

Funding

Local International

Investment Aid

Funding

Local International

Investment Aid

Budget & Authorisation

Government

Gauteng National Treasury

Blue IQ PPP

Government

Gauteng National Treasury

Blue IQ PPP

PPP-U1

PPP-U2

PPP ComponentsPPP Components

Technical contentTechnical content

Financial proposalFinancial proposal

Legal mark-upLegal mark-up

Socio-economic DevelopmentSocio-economic Development

Socio-Economic Development Socio-Economic Development (1)(1)

BBBEEBBBEE

– EquityEquity

– OwnershipOwnership

– DirectorshipDirectorship

– Training & developmentTraining & development

– Sub contractingSub contracting

– ProcurementProcurement

– Job creationJob creation

Socio-Economic Development Socio-Economic Development (2)(2)

Promotion of SMME’sPromotion of SMME’s

Focus on women, youth and people with disabilitiesFocus on women, youth and people with disabilities

Local contentLocal content

Local labourLocal labour

Investment / focus on marginalised areasInvestment / focus on marginalised areas

PPP Requirements PPP Requirements (1)(1)

FeasibilityFeasibility

– Value for money Value for money

• Public Sector Comparator (PSC)Public Sector Comparator (PSC)(What will it cost if Government does the work through (What will it cost if Government does the work through normalnormalprocurement process; and including completion and procurement process; and including completion and integrationintegrationrisk and cost)risk and cost)

– AffordabilityAffordability

– Total cost of project, expressed in Net Present Value (NPV)Total cost of project, expressed in Net Present Value (NPV)

– Yearly cost to the province (contingent liability)Yearly cost to the province (contingent liability)

– Maintain the 80/20% ratio in social vs.. rest split in budgetMaintain the 80/20% ratio in social vs.. rest split in budget

PPP Requirements PPP Requirements (2)(2)

Feasibility (continue)Feasibility (continue)

– Risk transfer Risk transfer

• Identify, cost and allocate various risks to the role players Identify, cost and allocate various risks to the role players best equipped to mitigate and manage them best equipped to mitigate and manage them

Selection of Selection of Preferred BidderPreferred Bidder

Political ProcessPolitical Process

Pre-feasibility study : Dorsch Consult – 1997/98Pre-feasibility study : Dorsch Consult – 1997/98

Premier announces Gautrain : Opening of Legislature Premier announces Gautrain : Opening of Legislature – January 2000– January 2000

Appointment of Political Cabinet Committee to Appointment of Political Cabinet Committee to oversee the projectoversee the project

Overseas visit by Political Committee 2001Overseas visit by Political Committee 2001

PPP processPPP process

RFQ : Two pre-qualified bidders May 2002RFQ : Two pre-qualified bidders May 2002

RFPI : Discussions May – Sept. 2002RFPI : Discussions May – Sept. 2002

RFPII : Issued 29 Nov 2002RFPII : Issued 29 Nov 2002

Submitted 30 Sept 2003 Submitted 30 Sept 2003

RFPIII (BAFO) : Submitted 29 Jan 2005RFPIII (BAFO) : Submitted 29 Jan 2005

FBAFO : 26 March 2005FBAFO : 26 March 2005

Preferred Bidder : 2 July 2005 ( and Reserve Bidder )Preferred Bidder : 2 July 2005 ( and Reserve Bidder )

Financial close : December 2005 ?Financial close : December 2005 ?

Procurement ProcessProcurement ProcessProcurement ProcessProcurement Process

RFQ : 2 Pre-Qualified BiddersRFQ : 2 Pre-Qualified Bidders (May 2002) (May 2002)

Bombela ConsortiumBombela Consortium– Bombardier Bombardier

TransportationTransportation

– Bouygues Travaux Bouygues Travaux PublicsPublics

– Murray & RobertsMurray & Roberts

– RATP InternationalRATP International

– SPG groupSPG group

– Loliwe Rail ContractorsLoliwe Rail Contractors

– Loliwe Rail ExpressLoliwe Rail Express

– Standard BankStandard Bank

– RMBRMB

– ABSAABSA

Gauliwe ConsortiumGauliwe Consortium– CAFCAF

– DragadosDragados

– Grinaker – LTAGrinaker – LTA

– Metro de MadridMetro de Madrid

– CANACCANAC

– UfudoUfudo

– TirisanoTirisano

– NedbankNedbank

– InvestecInvestec

CONCESSIONAIRECONCESSIONAIRE

BOMBELABOMBELA

Bombela: Contractual EntitiesBombela: Contractual EntitiesBombela: Contractual EntitiesBombela: Contractual Entities

TURN KEYTURN KEY

CONTRACTORCONTRACTOROPERATOROPERATOR

CIVILCIVIL

CONTRACTORCONTRACTOR

E&ME&M

CONTRACTORCONTRACTOR

E&ME&M

MAINTAINERMAINTAINER

Bombardier:Bombardier: 25.0% 25.0%Bouygues: 25.0%Bouygues: 25.0%M&R:M&R: 25.0% 25.0%SPG : SPG : 25.0% 25.0% RATP: 51.0%RATP: 51.0%

M&R: 23.9%M&R: 23.9%SPG: 25.1%SPG: 25.1%

Bombela Rolling stockBombela Rolling stock

Financial LiabilitiesFinancial Liabilities

Gautrain Cost EstimateGautrain Cost Estimate

Initial estimate R 7,0 billion (Feb 2002)Initial estimate R 7,0 billion (Feb 2002)

Cost increases ( MEC Ignatius Jacobs 26 Oct 2005)Cost increases ( MEC Ignatius Jacobs 26 Oct 2005)

– EIA requirements (29 Sept 2003) – route alignment changes & EIA requirements (29 Sept 2003) – route alignment changes & mitigating measuresmitigating measures

– Net effect of higher ridership and the consequent increase in the Net effect of higher ridership and the consequent increase in the size of the system due to opening date moving from 2007 to 2010 size of the system due to opening date moving from 2007 to 2010 and the recent high increases in land costs impacting on the and the recent high increases in land costs impacting on the acquisition of land needed for the construction of the project acquisition of land needed for the construction of the project

– Reviewed risk values due to the fact that in a PPP project all risks Reviewed risk values due to the fact that in a PPP project all risks need to be priced and incorporated.need to be priced and incorporated.

– VAT on the construction elements that was originally not included in VAT on the construction elements that was originally not included in the 2002 costingthe 2002 costing

– Reviewed contingencies as a consequence of the above factorsReviewed contingencies as a consequence of the above factors

Gautrain Cost EstimateGautrain Cost Estimate

Cost increases ( MEC Ignatius Jacobs 26 Oct 2005) Cost increases ( MEC Ignatius Jacobs 26 Oct 2005) (continue)(continue)

– A few minor reasons that have contributed to the increased A few minor reasons that have contributed to the increased cost are additional tunnel lining due to geotechnical cost are additional tunnel lining due to geotechnical conditions, relocations of bulk services and reviewed conditions, relocations of bulk services and reviewed insurance premiumsinsurance premiums

Result of these cost increases : Feb 2002 estimate Result of these cost increases : Feb 2002 estimate increased to R12,0 billion ( a 71% cost increase) increased to R12,0 billion ( a 71% cost increase)

If this estimate is escalated to a Dec 2005 number If this estimate is escalated to a Dec 2005 number and expressed as a total exposure of government and expressed as a total exposure of government over the next 5 years (in nominal terms ) it is R 20,0 over the next 5 years (in nominal terms ) it is R 20,0 billion plus ( as stated by Min Manuel ) billion plus ( as stated by Min Manuel )

Affordability of GautrainAffordability of Gautrain

After receiving RFP II in Sept 2003 it became apparent After receiving RFP II in Sept 2003 it became apparent that the Province would have to borrow funds to stay that the Province would have to borrow funds to stay within the 80/20 splitwithin the 80/20 split

– Discussions with Min Manuel (principle agreement)Discussions with Min Manuel (principle agreement)

– Provincial borrowing powersProvincial borrowing powers

– Revised TA1 authorisationRevised TA1 authorisation

– Financial model of Provincial income and expenditure for Financial model of Provincial income and expenditure for next 20 yearsnext 20 years

– BAFO process to reduce cost and risk to ProvinceBAFO process to reduce cost and risk to Province

Affordability GapAffordability GapBidders Position

Provincial Affordability TAI Revised

EIA Impacts Risk Revision Affordability Revision

Best and Final Offer Process

Costing Challenges Specification Changes

Affordability Gap

Affordability of GautrainAffordability of Gautrain

FIFA 2010 Soccer World CupFIFA 2010 Soccer World Cup

– Gautrain formed an integral part of South Africa’s bid Gautrain formed an integral part of South Africa’s bid documentdocument

– Gautrain was reported on extensively by FIFA in its Gautrain was reported on extensively by FIFA in its evaluation and final recommendationevaluation and final recommendation

– Must form the backbone of the public transport system in Must form the backbone of the public transport system in Gauteng for the World CupGauteng for the World Cup

– Achieving this in time becomes an RSA undertakingAchieving this in time becomes an RSA undertaking

Affordability of GautrainAffordability of Gautrain

At the beginning of 2005, National Treasury (NT) had questions around the At the beginning of 2005, National Treasury (NT) had questions around the spending pressures on Social Services (over and above the 80/20 split) and the spending pressures on Social Services (over and above the 80/20 split) and the pressures Gautrain will put on future Provincial budgetspressures Gautrain will put on future Provincial budgets

– a national contribution for Gautrain is investigateda national contribution for Gautrain is investigated

– National Department of Transport sees Gautrain as a public transport National Department of Transport sees Gautrain as a public transport flagship project of national importanceflagship project of national importance

– NDoT submits a Cabinet memo to approve the principle of NDoT submits a Cabinet memo to approve the principle of

• National financial support for GautrainNational financial support for Gautrain

• Gautrain as a national flagship public transport projectGautrain as a national flagship public transport project

• Completion of Gautrain linked to country’s commitment for the FIFA 2010 Soccer Completion of Gautrain linked to country’s commitment for the FIFA 2010 Soccer World Cup World Cup

Affordability of GautrainAffordability of Gautrain

NDoT cabinet memo approved in principleNDoT cabinet memo approved in principle

Busy developing second memo to expand on the quantum of the Busy developing second memo to expand on the quantum of the national contribution towards the Gautrainnational contribution towards the Gautrain

Additional funds required to link existing public transport to the Additional funds required to link existing public transport to the Gautrain and ensure a holistic public transport system for the Gautrain and ensure a holistic public transport system for the provinceprovince

Task team appointed to develop a public transport integration Task team appointed to develop a public transport integration document document

NB: TAI (revised) & TAIIB authorisation received, conditional to NB: TAI (revised) & TAIIB authorisation received, conditional to the approval of the second Cabinet Memothe approval of the second Cabinet Memo

FundingFunding

The public sector funding of the Gautrain's capital costs over the The public sector funding of the Gautrain's capital costs over the five year development period will be sourced from three places:  five year development period will be sourced from three places: 

– The Gauteng provincial government's equitable share (i.e. the The Gauteng provincial government's equitable share (i.e. the provincial budget (MTEF)); provincial budget (MTEF));

– provincial borrowing from the National Treasury; and provincial borrowing from the National Treasury; and

– a conditional grant from National Treasury via the National a conditional grant from National Treasury via the National Department of Transport.  Department of Transport. 

The conditional grant via the Department of Transport's budget The conditional grant via the Department of Transport's budget makes up 50% of the public sector's capital costs of the project, makes up 50% of the public sector's capital costs of the project, with the provincial budget and provincial borrowing sums with the provincial budget and provincial borrowing sums making up the remaining 50%.making up the remaining 50%.

FundingFunding

It needs to be emphasised that the bid received from It needs to be emphasised that the bid received from the Preferred Bidder is a fixed price lump sum the Preferred Bidder is a fixed price lump sum contract which means that after financial close has contract which means that after financial close has been reached (Dec 2005) there will be no future cost been reached (Dec 2005) there will be no future cost increases. increases.

The final cost will be within the affordability limit The final cost will be within the affordability limit approved by National Treasury in TA1 in June 2005approved by National Treasury in TA1 in June 2005

Debt & Equity

Pro

vin

cia

l

Co

ntr

ibu

tio

n

(G

ran

t)Operating Expenses

Debt Service & Profit

Develo

pm

ent

Period C

osts Establishing the size of the Provincial Grant

Debt & Equity

Pro

vin

cia

l

Co

ntr

ibu

tio

n

(G

ran

t)

Bidders Patronage Revenue

Patronage Guarantee

Develo

pm

ent

Period C

osts Establishing the size of the Patronage Guarantee

Minimum Required Total Revenue

Operating Period Income Revenue

Operating Period Expenditure

Debt & Equity

Pro

vin

cial

Co

ntr

ibu

tio

n (

Gra

nt)

Bidders Patronage Risk

Patronage Guarantee (contingent liability)

Dev

elop

men

t P

erio

d C

osts

Risk Profile of the Patronage Guarantee

Minimum Required Total Revenue

Patronage Guarantee (expected)

Provincial Patronage/Revenue Forecast

Concessionaires Demand Forecast

Gautrain : A Catalyst for Gautrain : A Catalyst for public Transport public Transport in South Africain South Africa

Gautrain in PLTFGautrain in PLTF

Although Gautrain has been incorporated in a number of Although Gautrain has been incorporated in a number of places, and impacts on a number of PLTF strategies (such places, and impacts on a number of PLTF strategies (such as future rail network, promotion of public transport, modal as future rail network, promotion of public transport, modal integration, spatial densification, etc.) it is also highlighted integration, spatial densification, etc.) it is also highlighted separately in the PLTF.separately in the PLTF.

Section 8.6 of the PLTF (2003-2008) includes:Section 8.6 of the PLTF (2003-2008) includes:

– BackgroundBackground

– ObjectivesObjectives

– Strategy (including consultation), andStrategy (including consultation), and

– Project Procurement Process Project Procurement Process

Gautrain Rapid Rail Aligned WithGautrain Rapid Rail Aligned With

Gauteng Spatial Development FrameworkGauteng Spatial Development Framework

Gauteng Provincial Land Transport FrameworkGauteng Provincial Land Transport Framework

Gauteng Transport Strategy and Initiatives In PerspectiveGauteng Transport Strategy and Initiatives In Perspective

Gauteng Integrated Land-use and Transport FrameworkGauteng Integrated Land-use and Transport Framework

Gauteng Strategic Public Transport NetworkGauteng Strategic Public Transport Network

Gautrain Rapid Rail Aligned WithGautrain Rapid Rail Aligned With

Integrated Transport Plans:Integrated Transport Plans:

– Ekurhuleni, Johannesburg, TshwaneEkurhuleni, Johannesburg, Tshwane

Integrated Development PlansIntegrated Development Plans

– Ekurhuleni, Johannesburg, TshwaneEkurhuleni, Johannesburg, Tshwane

Airports Company PlanningAirports Company Planning

SARCC Rail Network PlanningSARCC Rail Network Planning

FIFA 2010 Soccer World Cup BidFIFA 2010 Soccer World Cup Bid

Public Transport Integration Public Transport Integration Task TeamTask Team

Joint Task team appointed from all three spheres of Joint Task team appointed from all three spheres of Government to :Government to :

– consider opportunities that the Gautrain Project provides to consider opportunities that the Gautrain Project provides to maximise the achievement of the objectives of public maximise the achievement of the objectives of public transport in particular and transport transformation more transport in particular and transport transformation more generally through either ‘strategic’ or ‘operational generally through either ‘strategic’ or ‘operational integration’.integration’.

Public Transport Integration Public Transport Integration Task TeamTask Team

““Strategic Integration” refers to: Strategic Integration” refers to:

– ways to integrate Gautrain with other strategic land use and ways to integrate Gautrain with other strategic land use and transport interventions, in a manner that is consistent with transport interventions, in a manner that is consistent with the policy and planning processesthe policy and planning processes

““Operational Integration” refers to:Operational Integration” refers to:

– specific opportunities to improve the business prospects of specific opportunities to improve the business prospects of both Gautrain and other public transport systems in Gauteng both Gautrain and other public transport systems in Gauteng through operational cooperation.through operational cooperation.

Report completed, final editing and input document Report completed, final editing and input document for second Cabinet Memofor second Cabinet Memo

The Gautrain will promoteThe Gautrain will promotePublic TransportPublic Transport

SMME & BBBEE DevelopmentSMME & BBBEE DevelopmentTourismTourism

Business developmentBusiness development

The project stimulatesThe project stimulatesEconomic growthEconomic growth

Investment Investment New developmentNew development

Job creationJob creation

Design toDesign to Restructure urban areasRestructure urban areas Reduce travel distances, Reduce travel distances,

time and costtime and cost Improve city sustainability Improve city sustainability

More than Just Another Transport ProjectMore than Just Another Transport Project

Way ForwardWay Forward

TimelinesTimelines

RFQ-Process

Investors Conference

Announce pre-qualified bidders

Announce Preferred &

Reserve Bidder

Construction Commence

Prepare RFP documents

Sep 2001

End April2002

21 Oct2002

29 Sep2003

30 Sep 2003

Mid2005

Late 2005

EIA - Process

FinancialClose

EIA Report & Draft EMP ROD

InfrastructureAct

requirements

Negotiate with Bidder(s)

RFPPhase II

RFPPhase I

29 Nov2002

Proclamation and Land acquisition

Final EMPROD Appeals

Detail Design

RFPPhase III(BAFO)

Apr 2004

Financial ClosureFinancial Closure

Negotiations with successful bidder commenced after Negotiations with successful bidder commenced after the announcement on 2 Jul 2005the announcement on 2 Jul 2005

The essence of this process is to finalise the The essence of this process is to finalise the concession agreementconcession agreement

Negotiations with lenders will also take place inNegotiations with lenders will also take place inthis phasethis phase

Enabling WorksEnabling Works

In this phase, that will run concurrent with financial In this phase, that will run concurrent with financial closure, the land will be prepared for constructionclosure, the land will be prepared for construction

Moving of bulk services such as Telkom, Eskom, Moving of bulk services such as Telkom, Eskom, Rand Water and gas linesRand Water and gas lines

This phase is necessary to win time and to ensure This phase is necessary to win time and to ensure that the system will be fully operational by 2010that the system will be fully operational by 2010

This is also the phase in which the preferred bidder This is also the phase in which the preferred bidder will finalise preliminary and final designwill finalise preliminary and final design

Commencement of Construction Commencement of Construction

Construction will commence in early 2006Construction will commence in early 2006

Construction period: 54 monthsConstruction period: 54 months

JIA – Sandton Link will be operational earlierJIA – Sandton Link will be operational earlier

Full system operational in April / May 2010Full system operational in April / May 2010

Thank YouThank You

www.gautrain.co.zawww.gautrain.co.za

Rationale Rationale

CongestionCongestion

GovernmentGovernment PolicyPolicy

MobilityMobility

PrivatePrivate Transport TransportPublic TransportPublic Transport

BusBus TaxiTaxi RailRail

MetrorailMetrorail GautrainGautrain

Road capacity:Road capacity:GovernmentGovernment

Road capacity:Road capacity:TollToll

• HOV lanes HOV lanes • Extra Extra capacitycapacity

RailRail

MetrorailMetrorail GautrainGautrain

• Wil need :Wil need :• Major extensions to Major extensions to

networknetwork• New rolling stockNew rolling stock• Signalling upgradeSignalling upgrade

• Concessioning (Concessioning (operationsoperations))• LimitedLimited PPP possibility PPP possibility

• Purpose Purpose mademade to to address congestion in address congestion in the Tswhane – JHB the Tswhane – JHB corridorcorridor

• Ideal for PPP aproachIdeal for PPP aproach