Gauteng Rapid Rail Network Extensions Gautrain as a Public Private Partnership within a Capital Project Appraisal Framework 15 November 2016

Gautrain as a PPP The Gautrain is one of the largest PPPs in Africa 80km of high speed rail in Gauteng Province Concession Agreement is between Gauteng and a Concessionaire for 19 ½ years Design Build and Integrate Operate Transfer R28 billion capital cost (approx. USD3,5 bn in 2006) Ex Post economic appraisal showed significant social and economic benefits for the project

Gautrain as a PPP (2) Now in 6th year of operation Feasibility study to extend the rail network in the Province by some 140km using a PPP model Deliver a world class and sustainable transport system that supports Gauteng’s economic, social , cultural and environmental goals Integration with systems and development initiatives Service non serviced areas in the province Service excellence Socio economic development Job creation

Gautrain- a project with Multiple Objectives The GRRIN will promote Public Transport SMME & BBBEE Development Tourism Business development The project stimulates Economic growth Local & Foreign Investment New development Job creation Design to Restructure urban areas Reduce travel distances, time and cost Improve GCR sustainability

Two Passenger Rail Operators in Gauteng Metrorail/PRASA Gautrain

Extensions: All Phases MAMELODI LEGEND HATFIELD HAZELDEAN North – South Commuter TSHWANE EAST East – West Commuter PRETORIA IRENE Airport CENTURION Phase 3- 5 SAMRAND Metrorail OLIEVENHOUTSBOSCH MIDRAND RHODESFIELD SUNNINGHILL LANSERIA FOURWAYS O.R. TAMBO CRADLE COSMO MODDERFONTEIN SANDTON MARLBORO LITTLE FALLS RANDBURG EAST RAND MALL ROSEBANK SANDTON 2 ROODEPOORT BOKSBURG JABULANI PARK

Problem Statement South Africa has a strong PPP regulatory Framework embedded in Treasury Regulations Central PPP Unit in National Treasury provides support Multi –stage approval process Feasibility Study (Treasury Approval I) Procurement Documents (Treasury Approval IIA) Appointment of Preferred Bidder(Treasury Approval IIB) Contract signing(Treasury Approval III)

Problem Statement(2) A PPP will only be approved if it is: Affordable Value for Money Transfers substantial risk to the Private Party Works well for simple infrastructure projects Gautrain very complex and very high capital cost and significant long term fiscal risk Needs a different framework for approval as a large capital investment project Needs a modified feasibility study

The PPP Feasibility study process

Feasibility Study Components 18 month process Extensive analysis of route and solutions options Station node studies Investment Grade Demand and Revenue Study Comprehensive environmental studies Comprehensive Economic appraisal in accordance with Treasury’s Capital Project Appraisal guidance Funding options study to identify long term funding streams

Credible Project Partners Registered Project with Treasury as a possible PPP Registered it as a Strategic Integrated Project under the National Development Plan Project Support Agreement with DBSA DFI support for independent reviews of all feasibility study components (peer review with formal sign-off) KfW funded independent study of funding options (e.g. Land Value Capture)

Contractual Structure: Operator PPP Gauteng Provincial Government/GMA Rolling Stock Operator - PPP Civils Construct Track Construct E&M Mechanical Various Civil EPC Operations Maintenance

Extensions : CBA Staging Analysis

Questions William Dachs COO Gautrain Management Agency