The Gautrain management agency (GMA) is hoping to use national levies such as vehicle licence fees and airport taxes – paid by people across South Africa, whether they use the high-end train system or not – to fund its multi-billion rand expansion, CEO Jack van der Merwe revealed this week.
Speaking at an African Entrepreneurs Council (AEC) gathering at the Gautrain’s head office in Midrand, Van Der Merwe said the agency aims to decrease the financial pressure on the state for its planned expansion.
Gautrain management agency (GMA) Jack van der Merwe on Wednesday morning (James de Villiers, Business Insider South Africa)
The Gautrain expansion is due to see the rail network expand as far as to Soweto and Lanseria outside Johannesburg, and Mamelodi outside Pretoria, adding over 150km of railway track and another 19 stations to the network.
During the original construction of the Gautrain the private sector contributed 12% to its construction, Van der Merwe said, but he hopes to increase this to 33% with the next planned expansion.
The funding for the original Gautrain construction (supplied)
The national and provincial government’s contribution will decrease from 88% with the original construction of the Gautrain, to only 29% with the expansion, he said.
The remaining 38%, he said, will hopefully be paid using money drawn from levies such as vehicle licence fees, and airport taxes, as well as VAT.
He said a feasibility study into the Gautrain expansion is currently at the national treasury for approval and to allocate funding, but he hopes that construction will start within the next few years.
The first phase of the expansion will see the network expand to Randburg and Little Falls in Roodepoort, and phase 2 will see it expand into Soweto.
When the expansion is completed, the network will stretch into Boksburg, Lanseria, Irene and Mamelodi.
The expansion into Soweto is key for the Gautrain as there are more people in the high-value LSM 7 to 10 income group, Gautrain’s target market, in the area than there are in Randburg, he said.