Johannesburg – Covid-19 has left a big hole in Gautrain’s coffers with the Gauteng provincial government set to bleed millions of rands, data from National Treasury show.
“In 2020/21, the private operator [Bombela Concession] is expected to lose about R700-million and the provincial government’s patronage guarantee is expected to exceed its current budget by R400-million. The Gauteng department of roads and transport is expected to absorb this amount,” reads the budget review.
“The number of people using public transport is projected to remain below pre-Covidª19 levels for some time as a result of slow economic growth and the probability that more people will continue to work from home.”
The Gautrain has a “patronage guarantee” as part of the public-private partnership agreement signed with Bombela.
The private operator is partly liable for losses if revenue drops below a certain amount. Bombela was awarded the tender to build, maintain, operate and partially finance the Gautrain rapid rail system.
The company initially enjoyed a “patronage guarantee” of R360-million a year paid by the Gauteng provincial government.
That payment has now ballooned to an astonishing R1.5-billion a year. The Gautrain Management Agency (GMA) and Bombela said in joint written responses that all was not doom and gloom.
“Since the start of the pandemic, the Bombela Concession Company’s income has reduced by approximately R600-million to R700-million over the period. The company is financially sound.
“The impact of Covid-19 is expected to shrink into the future and, accordingly, Gautrain ridership is expected to increase. “We believe that public confidence in public transport is critical to its long-term sustainability and this will return as long as the Gautrain maintains its standards of excellence. We are also looking at expanded bus routes using more midi-bus in partnership with the minibus taxi associations that work with Gautrain, so that we can connect with more people who don’t have the luxury of owning cars,” they said.
GMA is an agency of the Gauteng department of roads and transport and is tasked with overseeing the operations of the Gautrain.
The agency early this month placed the procurement of the Gautrain additional rolling stock and depot enhancement project on hold until further notice. The decision was taken in the light of the significant impact that the Covid-19 pandemic and lockdowns have had on passenger demand on the Gautrain.
In the last year, Gautrain spent just under R1-billion on South African materials, thus maintaining jobs in critical supply chains and industries.
Over R495-million was spent on black owned companies.
Of this, R37-million went to black-owned SMMEs. Gautrain sustains about 11 000 jobs. Sujeet Morar, principal at global management consultancy Kearney, said a shift in economic history and the Covid-19 are ushering in a veritable fourth industrial revolution for the sector.
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