STATEMENT BY GAUTENG PREMIER MBHAZIMA SHILOWA

Posted on Sep 14, 2006 in Media Releases

STATEMENT BY GAUTENG PREMIER MBHAZIMA SHILOWA
ON THE GAUTRAIN RAPID RAIL LINK

16 February 2006

In my State of the Province address on Monday, I indicated that we have continued to make significant progress on Gautrain, which is one of the country’s single biggest infrastructure initiatives.  The project will make a major contribution to economic growth, job creation and other economic opportunities and is an integral part of an integrated transport system in the province.   I spoke about cabinet’s endorsement of Gautrain as a project of national significance.  This was reaffirmed by the Minister of Finance in his budget speech yesterday, when he announced an allocation of R7,1 billion towards the project.

I also indicated that negotiations on the financial closure have been progressing well but that full agreement on these matters had not been reached.  I said that, while it was important that agreement was reached as soon as possible, such agreement should be able to stand up to the scrutiny of national treasury and the people of Gauteng as being the best possible agreement.

Today I am pleased to announce that we now have a deal.  Yesterday we reached agreement with the preferred bidder, Bombela International Consortium, on all substantive issues within the affordability limit set by national treasury.   The respective legal teams are now tasked with the finalisation of the concession agreement, which will be submitted to the Minister of Finance for final treasury approval.

This achievement is another major milestone in ensuring the successful implementation of the initiative.  To ensure speedy implementation, we last night signed an early works contract with the preferred bidder to commence with the relocation of utilities such as water and electricity.

As I have said before, it is projects such as this which makes city regions great.  Gauteng has a vision to be a globally competitive city region and the Gautrain will make a major contribution in linking the three key metropolitan areas of Johannesburg, Tshwane and Ekurhuleni in our province and consolidating the economic linkages between them.

Issued by the Office of the Premier, Gauteng Provincial Government

For more information contact: Annette Griessel at 082 563 3614

Gautrain’s positive impact

In addition to its positive impact on growth and job creation, Gautrain will serve as a catalyst for transport transformation in the province, as part of an integrated transport solution which includes rail, taxis, buses and other road transport.  It will also contribute to alleviating congestion and lead to lower transport costs in the Tshwane-Johannesburg corridor.

Macro-economic impact studies estimate that Gautrain’s economic benefits will far outweigh the project’s costs.  It will contribute in the order of R1.8-billion to Gauteng’s Gross Geographic Product (GGP) during its construction phase.  Over its lifespan, it will also positively affect government’s fiscal position and the country’s balance of payments.

The impact of Gautrain’s construction on industrial sectors is expected to lead to an increase in business sales of about R3.6-billion with additional business sales of R327 million per annum resulting from operations and maintenance expenditure.

The project will create more than 93 000 job opportunities, including through the construction, operation and maintenance of the service, as well as through urban economic activity and the development impact in areas close to the stations.  In the operational period, close to 2 500 job opportunities a year will be created.

Considerable value will be gained in international skills transfer that will assist South Africa in the development of its own skills base capable of developing, operating and maintaining this technologically advanced mode of transport during the concession period.