OUR JOURNEY TO A BETTER GAUTENG...Gautrain Key Success Factors 1.Political leadership and will...

i-TransportandUATPConference20June2018

OURJOURNEYTOABETTERGAUTENG

Introduction• GautengRapidRailIntegratedNetwork(GRRIN)networkisbasedonthefollowing:• ITMP25Study&GautengExecutiveCouncilapproval;• KPMG’sReportonSocio-economicimpactofGautrainI;• FormspartoftheNDP &thefocusoninfrastructuredevelopment;and

• ThesuccessofGautrainIin:• makingpublictransportamode-of-choice• DevelopingitasaPPPproject;and• Lessonslearnedandapplyingthisknowledge.

InterventionsLandUseDevelopment1. Subsidisedhousingprovisionwithinurbancoreareas2. LandusedensificationinsupportofpublictransportStrategicPublicTransportNetwork3. Mainstreamingnon-motorisedtransport(NMT)4. Reinforcingpassengerrailnetworkasthebackboneofthesystem5. Extendingtheintegratedrapidandroad-basedPTnetworksFreightTransport6. StrengtheningfreighthubsRoadTransport7. Traveldemandmanagement8. Continuedprovincialwidemobility

GITMP25-YearIntegratedTransportInterventions

GautengCityRegionReinforcementthroughthePassengerRail

NetworkDescription• RailisakeyformgivingelementoftheCityRegion.• Railmostappropriateonhigh-densitycorridors.• Facilitate andsupporteffortsofPRASAandGMAtoDevelopRailNetworkandServicesintoamodernsystemmeetingtheneedsofGauteng’spassengers.

• Developmajormodaltransfernodesatstations(includingNMT)

AnewmodernGautengisinthemaking

• GautengPremier’sfirstStateoftheProvinceAddress– RadicallymodernisethewayGautengresidentsliveandwork

– Tenpillarsofradicaltransformation– Publictransportasaneconomicgrowthstimulant

GautengPremier’s10StrategicPillars

1. Radicaleconomictransformation2. Decisivespatialtransformation3. Acceleratedsocialtransformation4. TransformationoftheStateandgovernance5. Modernisationoftheeconomy6. Modernisationofthepublicserviceandthestate7. Modernisationofhumansettlementsandurbandevelopment8. Modernisationofpublictransport(ofwhichrailisamode)

andotherinfrastructure9. Re-industrialisingGautengasourcountry’seconomichub10. TakingaleadinAfrica’snewindustrialrevolution

• TheGRRINprojectisakeypartofthe8th pillartherebyhelpingtheeconomyoftheprovinceandthecountry.

PublicPrivatePartnership

• GautrainisaPPPProject• LeadingtoaConcessionAgreement• PPPProjectsonNationalandProvinciallevelsareregulatedbySouthAfricanPublicFinanceManagementActRegulations(TR16)

GautrainLessonslearnt• GreenfieldsprojectriskvsBrownfieldsextension• Theoreticalvsactualdata• PPPStructurecoulddowithsomeamendment• GMAhasexcellentdataonridership,operations,CapexandOpexfromGautrain1

• LowerIRR’sshouldbeapplicableinfuture• TheTransportDemandModellingshouldbeimproved• Socioeconomicimpactsaresignificant• Publictransportisthecatalystforeconomicchange

GautrainKeySuccessFactors1. Politicalleadershipandwill2. BuildonGautrainlessonslearned– what

workedandwhatdidn’t3. StickwithPPPbuttweakthemodel4. Partnerwiththebestwecan5. Leadtheeconomicdevelopmentandpublic

transportintegrationasaProvince6. FollowPFMA7. Continueeconomicandsocioeconomic

development

GautrainSocioeconomicdevelopment(Construction)

Gautrain’soperationsSocio-economicdevelopmentsuccess

Source:GMASEDreport2013/14financialyear

Gautrain’soperationsSocio-economicdevelopmentsuccess

Source:GMASEDreport2013/14financialyear

Problemstatement

GautengSDFBasedApproachvs.CoreTransitIntervention(2037)

2037Socio-economicDensityLowIncomewithExistingRailand

GRRINLowIncomePopulationDensity

JobDensity

2037Socio-economicDensityMiddleIncomewithExistingRailand

GRRINMiddleIncomePopulationDensity

JobDensity

GautengPopulationForecast2014 2025 2037

Population(Gauteng) 13000000 16800000 19100000

+3,8million +6,1million

FormalJobs(Gauteng) 4600000 6700000 8500000

+2,1m(+45%)

+3,9m(+84%)

FormalJobsCompoundedAnnual GrowthRate% - 3.5% 2.0%

AM PeakHourPerson Trips(Gauteng-allmodes) 2000000 2700000 3200000

+700000(+35%)

+1200000(+60 %)

CurrentPeakHourRoadTrafficAveragespeed43km/hr• Assume• Allroadimprovements

currentlyplannedarebuilt

• 2037Averagekeyroadnetworkspeed reducesto23km/h(peakandcontra-peakdirections)spreadover3hours

• 10km/hinpeakhourifnopeakspreading

• LikecurrentLagosorNairobi.

IfwedonothingTravelspeedswithoutGRRIN2037

GAUTENGON THE MOVE

19

36 VariousrouteoptionsconsideredAlignment length (km),

Property Impact,

Construction cost,

Environmental and heritage issues

Constructability in terms of accommodation of traffic, undermining, utilities and services and expected social impact.

ConnectivityChallengesinCOJ:• Significantdelayisexperiencedatthefreewaycrossings

• *Source:GoogleMaps(AMPeakHourTraffic)

KeyConnectivityChallenges

IntegratedPublicTransportSystemRapidRail/GautrainSpeedprofile: 160km/hOptimaldistance• 62– 75 kmPassengerperhour• 7,500– 20,000

GRRINIntegrationwithGautrainbus,GautrainTaxi,Taxi,BRTinCoT,EMMandCoJaspartoffeederanddistributionbusnetwork.

Harambee BRT AREYENGREAVAYA

GautrainFeederTaxi&Bus

• TheproposedPRASA,BRTandRapidRailnetworksarecomplementaryintheirservices

CombinedPRASA.BRT&GRRINnetwork

LegendBRTPRASAGRRINGRRINFDBS

GRRINEconomicsFindingsPhase1&2SummaryCBAresults– comparativeBCRanalysis>1positive

Comparative economic impacts for each additional stage of the future GRRIN programmeassuming operations start in 2026

(Present value, real prices, 2016, Rmillion, 8% discount rate)

Phase 1a Phase 2Sandton- Little Falls Soweto to Roodepoort

to Little Falls

Economic net present value (ENPV) R13,949 R18,615

Benefit to Cost Ratio (BCR) 2.0 2.6

EIRR 13.8 16.6

• Ofthefiveroutesconsidered,theSoweto-Roodepoort-LittleFallsroutedeliversbyfarthehighestnetbenefitwithaneconomicnetpresentvalue(ENPV)of~R18.6bnandaneconomicinternalrateofreturn(EIRR)of16.6%.

• Howeverthisroutedoeshaverelativelyhighcapitalinvestmentrequirement(duetoextensivetunnellingworkrequired),itdeliversenormoususerbenefits- chieflyintheformoftraveltimesavingsforGautrainusers.

SEDandBBBEE• Investigationdone• Gautrainlessonslearnttakenintoaccount•

SEDtargetsforPhase1Economic DevelopmentAchievements

DevelopmentPeriod OperationalPeriod

Target Value Target Value

LocalContent 65% R16 8b 80% R6,1B

JobCreation 28997 7729

SkillsDevelopment 1,5% R388 million 6% R29 million

PreferentialProcurement:BlackOwnedSpend

15% R2525 million 40% R2455million

EnterpriseDevelopment 0,1% R25,9million 0,1% R5,1million

SupplierDevelopment 0,2% R51,8million 0,2% R10,2million

TravelTimeSavingswhenGRRINisImplemented

Gautrain GRRIN• Soweto– Sandton

– Traveltimesaving(minutes):– 86mins

• Soweto– Randburg– Traveltimesaving(minutes):– 44mins

• Cosmo– Sandton– Traveltimesaving(minutes):– 46mins

• Fourways– Sandton– Traveltimesaving(minutes):– 9mins

SourceGMAData2015

GautrainFundingStructure• ThethreespheresofGovernment≈88%• NationalDoRA:48.5%• ProvincialMTEF:21.1%• ProvincialBorrowings:18.6%

• RemainderofCAPEX/Infrastructurefundedthroughequityanddebt≈12%

– Long-termDebt:10%– Equity:2%

• ShortfallofPatronageGuaranteecoveredbyProvincialMTEFfunding

DoRA,48,50%

MTEF;21,10%

ProvincialBorrowing;18,60%

LTDebt;10%

Equity;2%

GAUTRAINIFUNDINGSPLIT

AlternativeFundingAnalysis• AdditionalsourcesofAlternativefundingwereidentified

pertheDBSAreport(“GautengRapidRailNetworkExtension(GRRNE)FundingOptionsAnalysis”)

• Thepotentialcategoriesof“Alternative”revenue/fundingareasfollows:– TaxIncrementFinancing(TIR)(New&existingstations)– SpecialRatingAreas(SRA)(New&existingstations)– VehicleLicenseFee– AirportTax– SalesTax- VAT– PropertyAssetandManagementAgency(PropertyDevelopment)– StationAuctioning

AlternativeFundingAnalysis• Theaccompanyingchartsquantifytheimpactof‘Alternative’fundingsourceson

theprojectfunding/financingsplit

ProvincialMTEF;27%

NationalDoRA;40%

PrivateSector;33%

DEFAULTFUNDINGINFRASTRUCTURESPLIT

ProvincialMTEF;12%

NationalDoRA;17%

PrivateSector;33%

AlternativeFunding;38%

ALTERNATIVEFUNDINGINFRASTRUCTURESPLIT

AlternativeFundingAnalysis

-

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

ZARRe

al(R

M)

AlternativeFunding- DBSAReport

StationAuctioning

PAMA(Propertydevelopment)

SalesTax

Airport

CarLicense(AffectedMunics)

SRA

TIF

ThankYou

WilliamDachsCOOGMA