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Gautrain concession signed, but still no financial closure

28th September 2006

By: Mariaan Webb
Creamer Media Contract Publishing Editor

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Construction on Africa's first rapid-rail link, Gautrain, started on Thursday after the Gauteng provincial government and the concessionaire, Bombela, signed a 30 000-page concession agreement for the construction, operation and maintenance of the project.

Speaking at the official start of construction, Premier Mbhazima Shilowa, who marked the inauguration of construction by digging the first hole at the Marlboro station, admitted that the process had been long, but added that the length of time taken had been unavoidable for a project of Gautrain's complexity, cost and duration.

Bombela now has 54 months to build the R20-billion railway system, which is sometimes light-heartedly referred to as the Shilowa Express and which links Tshwane, Johannesburg and Johannesburg International Airport (JIA), soon to become OR Tambo International Airport.

Murray and Robert's Sean Flanagan, who spoke on behalf of the Bombela Steering Committee, said that the concession agreement was signed for the entire Gautrain route, but pointed out that financial closure had still to be reached. He explained that the banks were conducting a due-diligence study and that the closure was expected within the next few months.

The Gauteng province entered into a single contract with Bombela, which entered into two separate contracts with a turnkey contractor (TKC) and the other with an operations and maintenance joint venture. TKC had entered into two contracts with a civil joint venture and an electrical and mechanical joint venture.

Construction on the 80-km rail network was set to start on the southern portion of the project, which included Park Station, Sandton, Marlboro, Rhodesfield and JIA stations. A shaft would also be sunk for the tunnel in the Sandton vicinity at Mushroom Farm Park.

The Sandton to JIA link and the link between Sandton and Midrand would be completed and tested in 45 months - in time for the 2010 soccer World Cup - and the remaining five stations, linking Sandton with Johannesburg Park Station and Midrand with Hatfield, would be completed by March 1, 2011.

Road intersection upgrades and traffic diversions to accommodate the construction activities would also start taking place, mostly near Sandton, Rosebank and Park Station.

Shilowa said that the construction period of the Gautrain would cause disruptions, but added that every effort would be made to manage the inconveniences.

Construction started despite arguments by the South African Communist Party that the Gautrain was only for the elite and the party getting ready to launch its Red October campaign as part of its drive to ensure an affordable and safe public transport.

SABC News quoted the SACP general secretary, Blade Nzimande, as saying that spending R20-billion on the Gautrain was not benefiting the poor and that the project was “wasteful”.

But Transport Minister Jeff Radebe, who also attended the sod-turning ceremony, maintained his view that Gautrain was not about elite transport. “It about creating a mass transit system that caters for workers, business people, civil servants, shoppers and leisure seaters.”

He said that Gautrain was part of a bigger plan, which would produce a mass transit system that would take Gauteng “long into the future” and said that buses, taxis, pedestrians and communter trains would operate hand-in-hand with Gautrain.

“It is simply wrong to confuse the initial narrow concept of the Gautrain with what we are actually doing today.”

Meanwhile, Bombardier, the international rail transport company, which formed part of the Bombela Concession Company, also announced on Thursday that its part of the contract was worth $1,65-billion. Other stakeholders in the consortium included Bouygues, RATP, Murray & Roberts and Strategic Partners Group.

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