Gautrain’s commitment to corporate governance
Corporate governance plays a key function in the Gautrain Project. Several bodies and procedures are in place to ensure the implementation of good business practice, transparency and accountability.
The Gautrain project structure reflects its commitment to good corporate governance and comprises the following:
Public-Private Partnership (PPP) project
The Gautrain project is a PPP in which the Gauteng Provincial Government is the public sector partner and the Concessionaire, Bombela, the private sector partner. The fact that it is a PPP, means that it has to comply to all the requirements for PPP’s in the Public Finance Management Act and its Regulations. This includes an approved feasibility study and a specific procurement process with specific treasury authorisations through the PPP – unit of National Treasury.
Gautrain’s private partner is the Bombela Concession Company. The Concessionaire originally consisted of four shareholders, each owning 25% of the shares in Bombela but two of the shareholders have sold of 8% each of their shareholding to two new shareholders. Bombela has a 20-year concession agreement with the Gauteng Province for construction (54 months) and operating and maintenance (15 years).
The Gauteng Provincial Government is the public partner. The National Department of Transport, being the representative of National Government in its 50% contribution to the contract price, also plays an important role.
The Gauteng Provincial Government and the Bombela Concession Company signed a very comprehensive Concession Agreement (CA) which not only regulates the construction and implementation of the Project but also the operation and maintenance over the next 15 years and the transfer back to Province at the end of 15 years.
Gautrain Management Agency (GMA)
The GMA is a public entity established in terms of The GMA Act. The Agency is governed by a Board and its main function is to ensure the proper implementation of the Concession Agreement on behalf of Government.
Payments by the Gauteng Provincial Government to Bombela for the construction and delivery of the Gautrain system are only made against the completion of specific verifiable milestones.
Once a month Bombela claims the milestones that they believe are complete and due for payment. The Independent Certifier then independently assess whether the milestones have in fact been achieved and if so issue a certificate to the Province against which payment is made. The Independent Certifier is also responsible for issuing the Certificate of Final Completion.
Independent Environmental Control Person (IECP)
As part of the conditions attached to the Environmental Authorisation (Record of Decision) obtained for the Gautrain Project, an IECP has been appointed to monitor and report on compliance with the approved Environmental Management Plan (EMP), as well as any other environmental statutory obligations pertaining to environmental performance during construction and subsequent operation of the Project.
The IECP chairs an Environmental Management Committee (EMC), which meets monthly, and on which all the relevant Environmental Authorities are represented together with representatives of Province and the Concessionaire. Monthly reports are submitted to the EMC by the Concessionaire and the IECP that include records of non-compliance, reasons for non-compliance and measures taken to rectify non-compliance and any public complaints related to environmental management on the Project.
Independent Socio-Economic Monitor (ISEM)
Gautrain’s concession agreement makes provision for the appointment of an Independent Socio-Economic Monitor (ISEM). The ISEM is appointed jointly by the Gauteng Province and the Bombela Concession Company. The purpose of the ISEM is to perform an independent verifying role to validate compliance by the Concessionaire with its contracted socio-economic obligations during the design, construction and operation of the project.
The socio economic development strategy of the Gautrain Project includes the equity participation of black persons and black women in the entities created for the project, participation of Black Empowerment Entities and Small, Medium and Micro Enterprises in procurement and sub-contracting, enhancing local content, participation by Historically Disadvantaged Individuals and women in management, contribution to employment equity, and a human resource development strategy, which includes a women learnership and mentorship programme.
Dispute Resolution Board (DRB)
The Dispute Resolution Board (DRB) is jointly appointed by Province and Bombela for the development phase of Gautrain. The Chairperson is a retired judge and he is assisted by two eminent technical persons. The DRB exist mainly for technical related disputes whereas other disputes, including those which deals with the interpretation of the CA, are resolved through an arbitration process.