36 th ANNUAL CONFERENCE & EXHIBITION Birchwood Conference Centre, Gauteng 3-5 MARCH 2005

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

2. Gautrain Rapid Rail LinkInstitute for Quarrying3 – 5 March 2005 Jack van der Merwe (Pr. Eng) Project Leader: Gautrain Chief Executive: Public Private Partnerships Gauteng Provincial Government

3. Background

4. The Powerhouse of Africa • Gauteng is: • Less than 2% of Country’s surface area • Home to 70% of the SA’s 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 endof 2004

5. Gauteng – EconomicDevelopment Strategy • Existing economic strengths : • Mining • Heavy Industry • Financial & Banking sector • Proposed strategy: • Smart industries- Gauteng the “smart” Province • Move toward high value-added manufacturing • Enhancing the business services (Finance & Banking) sector and business tourism

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

7. Rationale

8. TransportChallenges Mobility Maintenance Accessibility

9. 1800 1600 1400 1200 1000 North Bound 15 minute Flow South Bound 800 600 400 200 0 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Time Traffic Flow on N1 N1 at New Road 0n Tue.03/10/2000

10. 40 35 Western Cape Eastern Cape Gauteng 30 Northern Cape 25 Free State 20 KwaZulu-Natal 15 North West Province 10 Gauteng Mpumalanga 5 Northern Province 0 Provinces Share of Gauteng inNational Vehicle Fleet

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

12. Technical info

13. Gautrain Key Objectives (1) • Economic growth, development and job creation • 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.) • Show Government’s 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 transport

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

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

16. Technical specs • International standard gauge • Maximum speed: 160 – 180 km / h • Modern state of the art trains • Thus totally different from existing SA system • Different trains for commuters and air passengers • Initial demand 104 000 passengers trips per day • Frequency every 10 – 30 minutes • Minimum operating hours 05h30 – 20h30 • Safety and security

17. Feeder and Distribution Services • Access to the Gautrain - one of the key success factors • Initially a large part of the market segment not within walking access of stations • 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 facilities

18. 10 km radius Legend: 5 km radius Rail Line & Rail Operational Area Station Precinct Dedicated Feeders Dedicated Distributor Existing PT Service Catchment area Concept

19. Interesting facts (1) • 104 000 passengers per day are estimated to travel on Gautrain • Approximately 78 new commuter rail coaches will be manufactured • Approximately 250 new bus coaches will be used • 3,6 million train kilometres and 674 million passenger kilometres will be travelled per year • 10,6 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.

20. Interesting facts (2) • 260 000 concrete sleepers will be manufactured for use in the track • 20 000 tons of steel will be required to manufacture the steel rails • 112 000 m² of bridges and viaduct structures will be constructed • More than 9 000 new parking bays will be required • 65 road intersections in the vicinity of stations will be upgraded • 48 000 jobs will be created during construction

21. PPP Process

22. Project Process • Fundamental 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) • Must have political buy-in & the private sector must show an appetite for the PPP project • Must comply with all legal requirements

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

24. Land Design and building Operation Maintenance Legislation Public Sector Concession Private Sector SubsidiesGuarantees Financing Rights of wayLong term vision Capital Access to the market Revenue Users BOT Advantages • What each party brings to the BOT

25. Design & Construction Contract Taxes Operation Contract People Mobility Public Sector Concession Private Sector Debt Supply Economic development Incomes Social function Associated benefits Profit Time saving Environment protection Service Quality Users BOT Advantages • What each party get from a BOT

26. Implementation Process • Four pillars • Political will & commitment • Viable project (base case design) • Technical • Financial • Legal/Institutional • Funding (for Infrastructure & Operations) • Government’s portion • Private Sector’s portion • Community acceptance & Buy-in • Socio-economic benefits • Power of expropriation

27. PPP Requirements • Feasibility • Value for money • Public Sector Comparator (PSC)(What will it cost if Government does the work through normalprocurement process; and including completion and integrationrisk 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

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

29. PPP Components • Technical content • Financial proposal • Legal mark-up • Socio-economic Development

30. EconomicInformation

31. SERVICE ORIGIN DESTINATION DISTANCE COST Commuter Pretoria Johannesburg 57 km R 16,40 Commuter Pretoria Sandton 46,8 km R 14,36 Commuter Rhodesfield Sandton 19,0 km R 9,08 Airport JIA Sandton 20,4 km R 70,40 Modelled Single Journey Fare Cost less than car, more than existing bus / taxi / rail

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

33. Way forward

34. New Pressures • 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 Cup • Pressure on approvals & authorisations

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

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

37. The Seven Stages of a PPP Project • Enthusiasm • Promises & Programmes • Disillusionment • Panic • Hunt for the guilty • Punishment of the innocent • Reward for those who had nothing to do with it

38. Thank You www.gautrain.co.za