Good results on Gautrain's socio-economic initiatives

Over and above the design, construction, commission, operation and maintenance of the Gautrain Project, specific socio-economic objectives were defined.  Skills development forms the backbone of the socio economic development (SED) strategy of the project.  It includes the equity participation of black persons and black women in the entities created for the project, participation of Black Empowerment Entities (BEE) and Small, Medium and Micro Enterprises (SMME) in procurement and sub-contracting, enhancing local content, participation by Historically Disadvantaged Individuals (HDIs) and women in management, contribution to employment equity, and a human resource development strategy, which includes a women learnership and mentorship programme.

Gautrain is uniquely structured as Public Private Partnership project between the Gauteng Provincial Government and Bombela Concession Company (Pty) Ltd (Bombela).  As this partnership is implemented according to a Concession Agreement, Bombela committed to measurable SED obligations in order to ensure that the project does not merely pay lip service to its developmental responsibility.

Bombela submits Monthly SED reports to the Province and the Independent Socio Economic Monitor (ISEM) within 45 calendar days after the end of each Contract Month.  The ISEM verifies the SED achievements claimed by Bombela and submits Monthly ISEM Reports on its findings about five weeks after receipt of the Bombela Monthly SED Reports.  For these reasons the achievements to date are summarised below for two different periods.

The ISEM is also tasked with reviewing the relevant processes, procedures and systems, monitoring of programmes, reporting on monthly findings and, if required, the undertaking of advisory tasks.  The structuring of the SED obligations and the responsibilities of the ISEM are a first for any major project in South Africa and is congruent with global best practice.

The following was achieved by the Bombela and its sub-contractors by the end of July 2008:

1. Bombela has already created or sustained more than 8 200 local
   direct jobs and an estimated total of 44 300 direct, indirect and
   induced jobs to date.
2. Black persons are holding 25% shares in the Concession
   Company, the Turnkey Contractor and the Operating Company.
   Furthermore, black persons are holding 10% of the shares in the Civil
   Contractor and the Electrical and Mechanical Contractor (E&M).
3. More than R1 810 million was spent on procurement from, and
   sub-contracting to BEEs, compared to an obligation of about R820
   million.  More than 210 BEEs have benefited from the project to
   date.
4. More than R710 million was spent on procurement from, and
   sub-contracting to New BEEs, compared to an obligation of about R290
   million.  More than 70 New BEEs have benefited from the project to
   date.
5. More than R520 million was spent on procurement from, and
   sub-contracting to SMMEs, compared to an obligation of about R130
   million.  More than 170 SMMEs have benefited from the project to
   date.
6. South African materials, plant and equipment to the value of more
   than R1 030 million have been purchased, compared to an obligation of
   R770 million.
7. Unskilled staff and semi-skilled staff attended more than 9 300 courses to improve their skills levels.
8. Top management, senior management, middle management and junior management of Bombela attended more than 1 040 training courses.
9. At the end of July 2008 Bombela has increased its labour force and
   significantly exceeded its obligations, which can be summarized as
   follows:
   • 12 617 people were employed.
   • 10 839 local people were employed, compared to an obligation of 8 736.
   • 9 998 HDIs were employed, compared to an obligation of 5 114.
   • 788 women were employed, compared to an obligation of 372.
   • 59 people with disabilities were employed, compared to an obligation of 49.

Verified SED Performance of Bombela by the ISEM up to the end of May 2008

The SED achievements claimed by Bombela up to the end of May 2008 have been verified by the ISEM.  The following conclusions can be drawn from the verification:

1. An amount of about R1 500 million was claimed on procurement from,
   and sub-contracting to BEEs, of which more than R1 090 million was
   verified.
2. An amount of about R620 million was claimed on procurement from,
   and sub-contracting to New BEEs, of which more than R320 million was
   verified.
3. An amount of about R480 million was claimed on procurement from,
   and sub-contracting to SMMEs, of which more than R210 million was
   verified.
4. An amount of about R790 million was claimed on procurement of South
   African materials, plant and equipment, of which more than R750 million
   was verified.
5. An amount of about R35 million was claimed on Human Resource Development, of which more than R24 million was verified.

It is evident that to date the Gautrain Rapid Rail Link project has already made a significant impact on socio economic development in Gauteng, and for that matter, in South Africa.