INSTITUTE OF QUARRYING ASPASA Gautrain Rapid Rail

INSTITUTE OF QUARRYING & ASPASA Gautrain Rapid Rail Link T By Jack van der Merwe – CEO: PPP Unit, Gauteng Department of Finance & Economic Affairs 36 th ANNUAL CONFERENCE & EXHIBITION Birchwood Conference Centre, Gauteng 3 -5 MARCH 2005

Gautrain Rapid Rail Link Institute for Quarrying 3 – 5 March 2005 Jack van der Merwe (Pr. Eng) Project Leader: Gautrain Chief Executive: Public Private Partnerships Gauteng Provincial Government

Background

The Powerhouse of Africa • Gauteng is: – Less than 2% of Country’s surface area – Home to 70% of the SA’s workforce – Accounts for some 40% of GDP of South Africa – Generates 9% of GDP of Africa – Most developed infrastructure in Africa – Most technologically advanced Province – The population is expected to exceed 9 million by the end of 2004

Gauteng – Economic Development Strategy • Existing economic strengths : – Mining – Heavy Industry – Financial & Banking sector • Proposed strategy: – Smart industries - Gauteng the “smart” Province – Move toward high value-added manufacturing – Enhancing the business services (Finance & Banking) sector and business tourism

Provincial Blue IQ Initiatives Rosslyn Pretoria CSIR Sterkfontein Caves Sandton Braamfontein Johannesburg Kempton Park Germiston Alberton Soweto "Blue IQ is a multi-billion Rand initiative of the Gauteng Provincial Government to invest in economic infrastructure development in identified mega projects in tourism, smart industries and high value-added manufacturing to create a truly “smart” province. "

Rationale

Transport Challenges Mobility Accessibility Maintenance

0: 00 1: 00 2: 00 3: 00 4: 00 5: 00 6: 00 7: 00 8: 00 9: 00 10 : 0 0 11 : 0 0 12 : 0 0 13 : 0 0 14 : 0 0 15 : 0 0 16 : 0 0 17 : 0 0 18 : 0 0 19 : 0 0 20 : 0 0 21 : 0 0 22 : 0 0 23 : 0 0 15 minute Flow Traffic Flow on N 1 at New Road 0 n Tue. 03/10/2000 1800 1600 North Bound South Bound 1400 1200 1000 800 600 400 200 0 Time

Share of Gauteng in National Vehicle Fleet 40 35 30 Gauteng 25 20 15 10 5 0 Provinces Western Cape Eastern Cape Northern Cape Free State Kwa. Zulu-Natal North West Province Gauteng Mpumalanga Northern Province

Gauteng Vehicles/km TREND 350 300 250 200 150 Gauteng 100 50 0 Western Cape Eastern Cape Northern Cape Free State Kwa. Zulu-Natal North West Gauteng Mpumalanga Northern Provinces

Technical info

Gautrain Key Objectives (1) • Economic growth, development and job creation • Alleviate severe traffic congestion (traffic volumes in corridor growing at 7% p. a. for more than a decade) • Must meet other goals of Government (SME promotion, Business tourism, Black Economic Empowerment, etc. ) • Show Government’s commitment to the promotion of public transport (National Land Transport Transitional Act, Act 22 of 2000) • Improve the image of public transport with this project and attract more car users to public transport

Gautrain Key Objectives (2) • To promote business tourism by means of the link between JIA and Sandton • To contribute towards urban restructuring, shortening travel distances and improving city sustainability • To link to the Tshwane Ring Rail Project, linking Mamelodi, Atteridgeville and Soshanguve / Mabopane • Stimulate the renovation and upliftment of the Johannesburg and Tshwane CBDs • Link the main economic nodes in Gauteng with JIA • Part of holistic transport plan and network for Gauteng

Hatfield Pretoria Centurion Midrand Preferred Route Marlboro Sandton JIA Anchor Stations Rhodesfield Rosebank Airport Park Station

Technical specs • International standard gauge • Maximum speed: 160 – 180 km / h • Modern state of the art trains – Thus totally different from existing SA system • Different trains for commuters and air passengers • Initial demand 104 000 passengers trips per day • Frequency every 10 – 30 minutes • Minimum operating hours 05 h 30 – 20 h 30 • Safety and security

Feeder and Distribution Services • Access to the Gautrain - one of the key success factors • Initially a large part of the market segment not within walking access of stations • Provide dedicated bus services: – Door-to-door service and travel time – Convenience of transfers – Same quality and Level of Service offered from point of access to “front door” at destination end of trip – Integration with existing and other new systems • Ample park and ride facilities

Concept 10 km radius Legend: 5 km radius Rail Line & Rail Operational Area Station Precinct Dedicated Feeders Dedicated Distributor Existing PT Service Catchment area

Interesting facts (1) • 104 000 passengers per day are estimated to travel on Gautrain • Approximately 78 new commuter rail coaches will be manufactured • Approximately 250 new bus coaches will be used • 3, 6 million train kilometres and 674 million passenger kilometres will be travelled per year • 10, 6 million bus kilometres will be travelled per year • There will be a train at least every 10 minutes during the peak time at stations between Johannesburg and Pretoria.

Interesting facts (2) • 260 000 concrete sleepers will be manufactured for use in the track • 20 000 tons of steel will be required to manufacture the steel rails • 112 000 m² of bridges and viaduct structures will be constructed • More than 9 000 new parking bays will be required • 65 road intersections in the vicinity of stations will be upgraded • 48 000 jobs will be created during construction

PPP Process

Project Process • Fundamental Principles – Multi-billion Rand project – Cannot be funded in total by Government – Can only be developed as a Public-Private Partnership • PPP project (BOT type project) – Must have political buy-in & the private sector must show an appetite for the PPP project – Must comply with all legal requirements

RFQ Qualified Bidders • Bombela Consortium • Gauliwe Consortium – Bombardier Transportation – CAF – Bouygues Travaux Publics – Dragados – Murray & Roberts – Grinaker – LTA – RATP International – Metro de Madrid – CANAC

BOT Advantages • What each party brings to the BOT Land Public Sector Legislation Subsidies Guarantees Rights of way Long term vision Concession Design and building Operation Maintenance Private Financing Sector Capital Access to the market Revenue Users

BOT Advantages • What each party get from a BOT Design & Construction Contract Taxes People Mobility Public Sector Economic development Operation Contract Concession Social function Debt Supply Incomes Associated benefits Profit Time saving Environment protection Service Quality Users Private Sector

Implementation Process • Four pillars – Political will & commitment – Viable project (base case design) • Technical • Financial • Legal/Institutional – Funding (for Infrastructure & Operations) • Government’s portion • Private Sector’s portion – Community acceptance & Buy-in • Socio-economic benefits • Power of expropriation

PPP Requirements • Feasibility – Value for money • Public Sector Comparator (PSC) (What will it cost if Government does the work through normal procurement process; and including completion and integration risk and cost) – Affordability – Total cost of project, expressed in Net Present Value (NPV) – Yearly cost to the province (contingent liability) – Maintain the 80/20% ratio in social vs. . rest split in budget

PPP Requirements (continue) • Feasibility (continue) – Risk transfer • Identify, cost and allocate various risks to the role players best equipped to mitigate and manage them

PPP Components • Technical content • Financial proposal • Legal mark-up • Socio-economic Development

Economic Information

Modelled Single Journey Fare SERVICE ORIGIN DESTINATION DISTANCE COST Commuter Pretoria Johannesburg 57 km R 16, 40 Commuter Pretoria Sandton 46, 8 km R 14, 36 Commuter Rhodesfield Sandton 19, 0 km R 9, 08 Airport JIA Sandton 20, 4 km R 70, 40 Cost less than car, more than existing bus / taxi / rail

What Will the Economic Impact Be? Number of jobs created / sustained: • Construction • Operating and Maintenance • Urban economic activity : 57 000 : 2 200 p. a. : 40 000 p. a. Increased business sales : R 6 billion Increase in Gauteng GGP : 0, 7 - 1%

Way forward

New Pressures • After 2004 elections: – Top priority is to focus on job creation & fighting poverty • Timing of the completion of the project to coincide with the FIFA 2010 World Cup – Pressure on approvals & authorisations

Summary of Tender Process Investors Conference Announce pre-qualified bidders EIA Report & Draft EMP RFQProcess ROD Appeals EIA - Process Prepare RFP documents Construction Commence Announce ROD Preferred & Reserve Bidder RFP Phase I Final EMP RFP Phase III (BAFO) RFP Phase II Financial Close Negotiate with Bidder(s) Detail Design 29 Nov 2002 Sep 2001 End April 2002 21 Oct 2002 30 Sep 2003 29 Sep 2003 Apr 2004 Infrastructure Act requirements Apr 2005 Proclamation and Land acquisition Oct 2005

Development and Operation Contract Term (19. 5 years) Development Period (54 mths) Mrt 05 Operating Period (15 years) Oct 05 Enabling Works Dec 08 Construction & Commission: Sandton – JIA Dec 09 Construction & Commission: Remainder of the System Operations & Maintenance

The Seven Stages of a PPP Project • Enthusiasm • Promises & Programmes • Disillusionment • Panic • Hunt for the guilty • Punishment of the innocent • Reward for those who had nothing to do with it

Thank You www. gautrain. co. za