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

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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

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Background

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The Powerhouse of Africa Gauteng is:Gauteng is: Less than 2% of Countrys surface area Home to 70% of the SAs 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

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

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"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." Provincial Blue IQ Initiatives Sterkfontein Caves Sandton Johannesburg Soweto Germiston Kempton Park Pretoria Rosslyn Braamfontein Alberton CSIR

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Rationale

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Mobility Accessibility Maintenance Transport Challenges

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Traffic Flow on N1 N1 at New Road 0n Tue.03/10/2000

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Share of Gauteng in National Vehicle Fleet 0 5 10 15 20 25 30 3540Provinces Western Cape Eastern Cape Northern Cape Free State KwaZulu-Natal North West Province Gauteng Mpumalanga Northern Province Gauteng

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

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Technical info

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

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

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

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Technical 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 system Different trains for commuters and air passengersDifferent trains for commuters and air passengers Initial demand 104 000 passengers trips per dayInitial demand 104 000 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

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Feeder 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 walking access of stationsInitially a large part of the market segment not within walking access of stations Provide dedicated bus services: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 facilitiesAmple park and ride facilities

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

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Interesting facts (1) 104 000 passengers per day are estimated to travel on Gautrain104 000 passengers per day are estimated to travel on Gautrain Approximately 78 new commuter rail coaches will be manufacturedApproximately 78 new commuter rail coaches will be manufactured Approximately 250 new bus coaches will be usedApproximately 250 new bus coaches will be used 3,6 million train kilometres and 674 million passenger kilometres will be travelled per year3,6 million train kilometres and 674 million passenger 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 the peak time at stations between Johannesburg and Pretoria.There will be a train at least every 10 minutes during the peak time at stations between Johannesburg and Pretoria.

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Interesting facts (2) 260 000 concrete sleepers will be manufactured for use in the track260 000 concrete sleepers will be manufactured for use in the track 20 000 tons of steel will be required to manufacture the steel rails20 000 tons of steel will be required to manufacture the steel rails 112 000 m of bridges and viaduct structures will be constructed112 000 m of bridges and viaduct structures will be constructed 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 be upgraded65 road intersections in the vicinity of stations will be upgraded 48 000 jobs will be created during construction48 000 jobs will be created during construction

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PPP Process

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Project Process Fundamental PrinciplesFundamental 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)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

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

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BOT Advantages What each party brings to the BOTWhat each party brings to the BOT Legislation Subsidies Guarantees Land Rights of way Long term vision Operation OperationMaintenance Design and building Capital Capital Access to the market Financing UsersUsers PublicSector Concession PrivateSector Revenue

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BOT Advantages What each party get from a BOTWhat each party get from a BOT Social function PeopleMobilityTaxes Economic development Associatedbenefits Environment protection Time saving Service Quality Concession PrivateSector UsersUsers PublicSector Design & Construction Contract OperationContract DebtSupply Incomes Incomes Profit Profit

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Implementation Process Four pillarsFour pillars Political will & commitment Viable project (base case design) TechnicalTechnical FinancialFinancial Legal/InstitutionalLegal/Institutional Funding (for Infrastructure & Operations) Governments portionGovernments portion Private Sectors portionPrivate Sectors portion Community acceptance & Buy-in Socio-economic benefitsSocio-economic benefits Power of expropriationPower of expropriation

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PPP Requirements FeasibilityFeasibility 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)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

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

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PPP Components Technical contentTechnical content Financial proposalFinancial proposal Legal mark-upLegal mark-up Socio-economic DevelopmentSocio-economic Development

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Economic Information

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Modelled Single Journey Fare SERVICEORIGINDESTINATIONDISTANCECOST CommuterPretoriaJohannesburg 57 km R 16,40 CommuterPretoriaSandton 46,8 km R 14,36 CommuterRhodesfieldSandton 19,0 km R 9,08 AirportJIASandton 20,4 km R 70,40 Cost less than car, more than existing bus / taxi / rail

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

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Way forward

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New Pressures After 2004 elections: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 CupTiming of the completion of the project to coincide with the FIFA 2010 World Cup Pressure on approvals & authorisations

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

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Development and Operation Development Period (54 mths) Operating Period (15 years) Contract Term (19.5 years) Construction & Commission: Sandton JIA Construction & Commission: Remainder of the System Operations & Maintenance Dec 08 Dec 09 Enabling Works Oct 05Mrt 05

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The Seven Stages of a PPP Project EnthusiasmEnthusiasm Promises & ProgrammesPromises & Programmes DisillusionmentDisillusionment PanicPanic Hunt for the guiltyHunt for the guilty Punishment of the innocentPunishment of the innocent Reward for those who had nothing to do with itReward for those who had nothing to do with it

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Thank You www.gautrain.co.za