1. OUR JOURNEY TO A BETTER GAUTENG
Gauteng Rapid Rail Integrated Network – GRRIN
Tshepo Kgobe
10 July 2018

2. Contents TMR & PPP Framework Lessons Learnt The challenge & Planning
Modelling a Future Network
The Routes and Phasing
Socio-Economic Development
Conclusions and Next steps

3. TMR & PPP Framework

4. A new modern Gauteng is in the making
Gauteng Premier’s first State of the Province Address
(27 June 2014 in Thokoza, Ekurhuleni)
Radically modernise the way Gauteng residents live and work
Ten pillars of radical transformation
Gauteng has a 25 year Integrated Transport Master Plan (GITMP) with Rail as its Public Transport backbone
Public transport as an economic growth stimulant
The GRRIN project is a key part of the 8th pillar of the premier’s vision for the modernisation of public transport and other infrastructure thereby helping the economy of the province and the country

5. Gauteng’s Future Transport planning
Car/ vehicle growth and Road Congestion
Travel speeds without GRRIN
Travel time savings if GRRIN implemented
Population Growth and land use
Connectivity Challenges in Jhb North Western Sector

6. Dreaming Of a World-class Rail System To Connect Our People throughout Gauteng
Integrated public transport
At its core a rapid rail link system
Increased infrastructure investment
Spatial Development Initiatives to stimulate economic growth and job creation

7. Lessons learnt

8. Gautrain Key Success Factors
Political leadership and will
Build on Gautrain lessons learned – what worked and what didn’t
Stick with PPP but adapt the model
Partner with the best
Lead the economic development and public transport integration as a Province
Follow PFMA
Continue economic and socio economic development

9. Gautrain Lessons learnt
Greenfields project risk vs Brownfields extension
Theoretical vs actual data
PPP Structure could do with some amendment
GMA has excellent data on ridership, operations, Capex and Opex from Gautrain 1
Lower IRR’s should be applicable in future
The Demand Modelling should be improved.
Socio economic impacts are significant
Public transport as a catalyst for economic change

10. Important drivers
Project to be managed in such a manner that it is institutionally and commercially structured to attract interest, support and private sector participation

11. PPP Requirements Feasibility Value for money Affordability
Public Sector Comparator (PSC) (What will it cost if Government does the work through normal procurement process; and including completion and integration risk and cost)
Affordability
Total cost of project, expressed in Net Present Value (NPV)
Yearly cost to the province (contingent liability)
Maintain a prescribed ratio in social vs.. rest split in budget
Risk transfer
Identify, cost and allocate risks to the role players best equipped to mitigate and manage them

12. The PPP Feasibility study process

13. Feasibility Study Governance

14. The Challenge & Planning

15. Transport Planning Major Interventions* or “do nothing”*
Population Growth –
(Number of workers)
Predicted – Future State
External Factors**
Economic Growth –
(type, location, labour requirements)
Current – Status Quo
2037
Land-use Patterns –
(Where will the People live)
2016
Enablers*** or “do nothing”

16. 1. Car growth and Congestion in Gauteng
3,9 million to 8,6 million 2037
Cars/1000 population Gauteng
300/ 1000 (2014) to 450/1000 (2037)
Significant car growth
Congested road network

17. 2. Travel speeds without GRRIN 2025
Existing road network is operating close to capacity
Current average network speed 41 km/h (peak and contra-peak directions)
Will reduce to 26 km/h in 2025 with an key road journey time 1- 3 hours.

18. 2. Travel speeds without GRRIN 2037
Peak Hour Road Traffic
Assume
1 000 km additional freeway capacity
1 500 km additional dual carriageway capacity
All road improvements currently planned are built
Average key road network speed reduces to 23 km/h (peak and contra-peak directions) spread over 3 hours
10km/h in peak hour if no peak spreading

19. 4. Population Growth
Gauteng’s population is estimated to increase by 48% by 2037
Source: GRRIN Transport demand model : Land use projections from Metro land use data

20. Population (Potential Users 2025)

21. Jobs (all 2025)

22. Job Opportunities: 2037

23. “The Cost of Doing Nothing”

24. “The Cost of Doing Nothing”
Source GITMP 25

25. Conclusions :”The Cost of Doing Nothing”
Analysis of the transport situation in 25-years’ time, shows that the consequences of “doing nothing” will be severe, i.e. if current trends continue
Vehicle population predicted to grow from 3.9 mil. to 8.6mil.
Peak hour person trips to grow from 2.0mil. to 3.2mil.
Average peak hour road network speed will reduce from 41km/h to 26km/h in 2025
Average peak hour road network speed will reduce from 41km/h to 23km/h in 2037 over a spread 3 hour peak
Congestion, with the transport network, the economy and the natural environment choking
Major interventions are required to avoid this scenario

26. Modelling a Future Network

27. Existing Rail in Gauteng & un-serviced areas
Lanseria & Jhb NW
Tshwane East
Un-serviced rail areas
East Rand Mall / Midfield Terminal

28. Future Rail in Gauteng Metrorail/PRASA & Gautrain
Rail as the backbone of public transport
Integrated to BRT and Taxi

29. Rapid Rail GRRIN interaction with other modes
Travel Distance (km)
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
20 000
30 000
40 000
Bus
Long Distance
Monorail
Minibus
Commuter Metro Rail
BRT
Passenger per hour
Tram
HIGH SPEED/ INTERCITY/ LONG DISTANCE RAIL
Rapid Rail
Commuter Metro Rail

30. GRRIN Transport Demand Model
Study Area & Zones
Road & PT Network
Trip Generation
Trip Distribution
Mode Choice
Assignment
Calibration & Validation
GITMP25 Model
GITMP25, RISFSA, Capacity, Speeds
Routes, Fares, Timetables, Patronage (Taxi, Bus, BRT, Rail, Gautrain)
Census 2011 UPDATED TO 2014
HTS 2013
PT Routes
Stated Preference Surveys
Road Network Speeds, Capacity, Costs
Travel Time Surveys
DATA INPUT
MODEL PROCESS
Census 2011
Landuse (2014)
PT Routes, Timetables, Capacity, Fares
Road Network
Generalised Costs
ACSA Data
PT Routes, Speeds, Capacity, Costs
Traffic Counts
PT Counts

31. GRRIN Transport Demand Model
Model calibrated to international standards (UK)
Model meets criteria for:
Traffic Flows;
Traffic Screenlines & Cordons
Journey Times;
Trip Patterns;
Passenger Flows
Signed off by international reviewer
High level of confidence in Car Traffic & Gautrain
Other Public Transport adjusted and calibrated to counts and information available
Road network was expanded based on Gauteng’s Strategic Road Network plans for 2025 and 2037
Gautrain bus headway to match train headways
Park & Ride facilities at all new stations

32. Feasibility Progression
Technical Summary
Economic
International Review 
Demand
GRRIN Transport Demand model
Financial Model
Demand Model
Model Revenue
Phasing
Fare Box
SED
Phasing
Technical
Phasing Routes, Stations, Capex, Opex & Costs
Project Structure
Funding Structure
Risk
Feasibility Study

33. The Routes and Phase

34. GRRIN full network Capex
Attached cost categories used
Over R 111 billion (Capex only)
Subject to funds availability
Phased over 25 years
LAND ACQUISITION
All land acquisition related to track, stations and depots
MAINLINE RAILWAY
Costs related to railway line infrastructure including related professional fees
Project broken down into individual line elements
RELOCATION OF SERVICES
Relocation of services crossed by lines and stations
STATIONS
Station capital costs including access roads
MOVABLE ASSETS
Rolling stock and Buses
OVERALL SYSTEM
System elements such as signalling control systems and rolling stock
DEPOT
Depot costs
O&M EQUIPMENT
Track and rolling stock operations and maintenance equipment
CLIENT AND PROFESSIONAL FEES
Service fees related to either mainline railway and station elements as above or related to overall system components.

35. GRRIN Extensions Phasing Phase 1
MAMELODI
LEGEND
HATFIELD
HAZELDEAN
North – South Commuter
TSHWANE EAST
East – West Commuter
PRETORIA
IRENE
Airport
CENTURION
Phase 1
SAMRAND
Metrorail
OLIEVENHOUTSBOSCH
MIDRAND
SUNNINGHILL
RHODESFIELD
LANSERIA
FOURWAYS
O.R. TAMBO
COSMO
MODDERFONTEIN
SANDTON
MARLBORO
LITTLE FALLS
RANDBURG
EAST RAND MALL
SANDTON 2
ROODEPOORT
ROSEBANK
JABULANI
PARK
BOKSBURG

36. Metrorail integration
Phase 2: Soweto link
MAMELODI
Metrorail integration
North – South Commuter
East – West Commuter
Airport Service
HATFIELD
HAZELDEAN
TSHWANE EAST
PRETORIA
IRENE
CENTURION
SAMRAND
Phase
OLIEVENHOUTSBOSCH
MIDRAND
SUNNINGHILL
RHODESFIELD
LANSERIA
FOURWAYS
O.R. TAMBO
CRADLE
COSMO
MODDERFONTEIN
SANDTON
MARLBORO
MIDFIELD TERMINAL
LITTLE FALLS
RANDBURG
SANDTON 2
EAST RAND MALL
ROSEBANK
ROODEPOORT
JABULANI
PARK
BOKSBURG

37. GRRIN 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
MIDFIELD TERMINAL
LITTLE FALLS
RANDBURG
EAST RAND MALL
ROSEBANK
SANDTON 2
ROODEPOORT
BOKSBURG
JABULANI
PARK

38. Why Phase 1? Highest transport model demand
Unserved by any rapid public transport (BRT)
Un-serviced by rail public transport mode
Congestion (see current google plot*)
Key connectivity challenges
Key economic nodes are located within the N1/N3/N12 ring road
Links with CoJ development planning
Many high density residential nodes are located outside of the N1/N3/N12 ring road
Limited freeway and road crossings in NW quadrant (12)
*Source: Google Maps (AM Peak Hour Traffic)
Freeway crossings
Other road crossings

39. Socio-Economic Impact

40. Socio Economic Benefit potential of GRRIN
National Revenue:
For every R1 spent on operating the Gautrain, an additional 24 cents is added to the national government revenue
Job creation:
Total Jobs: Estimated over jobs will be created.
For every R1 million of operational expenditure, 4 jobs will be sustained per year
Maintenance & Operations:
For every R1 spent on operating the Gautrain, the provincial economy gains 96 cents
Rolling Stock
Industrialization through maintenance in SA

41. Socio-economic Impacts
Impacts from the Extensions not often fully appreciated
Decrease in road expansion and maintenance programs
Even if the introduction of the GRRIN has only the effect of postponing the roads programme, it means extra money in the pockets of tax payers.
Concentrated development around railway stations
The establishment of a railway station has the effect of drawing businesses to establish around the station. This agglomeration leads to additional productivity, which ultimately leads to additional growth and development.
Reduced risk of unforeseen delays on roads
Some road users will not use the train as a day-to-day form of commute, however it gives them an alternative opportunity to ensure that they reach a destination timeously.
Increased perception of safety as opposed to road transport
Especially for women and children, the train ensures a safer transport environment when needed.

42. GRRIN Expected Benefits to Key Stakeholders
Gauteng Province
Commuters
Less traffic congestion
Safe, reliable mode of public transport
Carbon emission saving
Time saving
Reduced accidents/fatalities
Job creation
Dedicated right of way

43. GRRIN Expected Benefits to Key Stakeholders
Local authorities
Property Owners and Developers
(Surrounding GRRIN Station Nodes)
Increase in property demand around GRRIN nodes
Less traffic congestion
Increased value, densification and occupancy rates
Increased rates and taxes revenue, due to real increases in property prices
Resultant capital and income gains from an increase in property demand
Increase in Local authorities “brand value” due to a the presence of a dependable public transport solution
Business Owners
Increased revenue from higher densities of customers close to GRRIN station nodes
Carbon emission saving
Transit Orientated Development (TOD), and economic growth

44. Commercial Structuring & Funding

45. Gautrain I Contract Basis
Gautrain I - Single PPP contract
Train operations & maintenance
Rail infrastructure & maintenance
Rolling stock & maintenance.
Patronage guarantee to the Bombela Consortium based on a pre-agreed equity IRR return.
Patronage Guarantee based on the Greenfield nature of the project
Government Funding: Patronage Guarantee
Gautrain Management Agency
Patronage guarantee
Fully inclusive rail service
Equity providers
Servicing of debt
Equity ≈ 2%
Bombela
Debt ≈ 10%
Equity returns
Debt providers
Train Operations
Infrastructure
Rolling Stock
Government Funding – Infrastructure ≈ 88%

46. Gautrain Funding Structure
The three spheres of Government ≈ 88%
National DoRA: 48.5%
Provincial MTEF: 21.1%
Provincial Borrowings: 18.6%
Remainder of CAPEX/Infrastructure funded through equity and debt ≈ 12%
Long-term Debt: 10%
Equity: 2%
Shortfall of Patronage Guarantee covered by Provincial MTEF funding

47. GRRIN Extensions Basis & Structure

48. Funding Structure – Default Option
The outcome of the GRRIN PPP feasibility study derived an anticipated infrastructure funding split:
Government Capital contribution ≈ 67%
National DoRA: 40%
Provincial MTEF Funding: 27%
Private Sector funding of ≈ 33%
Debt
Mezzanine Funding
Pure Equity
This option does not consider additional ‘alternative’ funding sources that would further reduce the required government capital contribution
Proportion of the government capital contribution possibly funded via ‘alternative’ sources of revenue

49. Gautrain /GRRIN comparison
The accompanying chart quantifies the change from Gautrain to GRRIN funding sources on the project funding/financing split

50. Alternative Funding Analysis
Additional sources of Alternative funding were identified per the DBSA report (“Gauteng Rapid Rail Network Extension (GRRNE) Funding Options Analysis”)
The potential categories of “Alternative” revenue/funding are as follows:
Tax Increment Financing (TIR) (New & existing stations)
Special Rating Areas (SRA) (New & existing stations)
Vehicle License Fee
Airport Tax
Sales Tax - VAT
Property Asset and Management Agency (Property Development)
Station Auctioning
Table p 5 KPMG

51. Alternative Funding Analysis
The accompanying charts quantify the impact of ‘Alternative’ funding sources on the project funding/financing split

52. Alternative Funding Analysis

53. Alternative Funding Analysis (2017 – 2034)
Alternative Funding Source
Total Real (Rm)
TIF
579
TIF Existing Stations -
SRA
1 157
SRA Existing Stations
Car License (Affected Munics)
4 379
Airport
23 424
Sales Tax
454
PAMA (Property development)
2 116
Station Auctioning
1 930
Total
33 585
*Source: Table 6.4 DBSA report converted to real 2016 figures

54. Conclusion

55. Conclusions
The Gautrain has already contributed to some of the NDP milestones and will continue to be a major player in shaping the economy of Gauteng, more so if its network expands beyond the current capacity
GRRIN can fulfill the criteria of a catalytic and transformative infrastructure project that would lift socio-economic development in the Gauteng region onto a higher, and more sustainable growth trajectory.
GRRIN can facilitate Radical spatial, social and economic transformation in the GCR, thereby promoting a more equal society through better access to economic opportunities to benefit Gauteng’s residents
GRRIN contributes to the Premier’s 10 pillar programme (See detailed slides as annexure if required)

56. Conclusions PPP Requirements (Phase 1)
Feasibility Study
Project is technically, economically, financially feasible as default option
Value for money
More viable VfM than Gautrain 1 due to experience, brownfield nature and lessons learnt
Risk adjusted PPP reference model (NPV) is lower than Risk adjusted PSC
Significant socio economic and economic impact (BCR, EIRR and SED figures)
Risk transfer
Operator PPP Revised project structure results in significant risk mitigation
Affordability
The project is affordable subject to the relevant funding being approved by government.
With alternative funding it is more affordable.

57. Way forward Pre construction activities
Various preparatory work packages required:
Appointment of the PIMO and the Procurement Transaction Advisors
RFQ, RFP development for Operator PPP
Baseline preliminary design,
geotechnical investigations,
land survey,
environmental authorisations(EIA) including heritage(HIA),
land proclamation and acquisition,
public participation and communications,
stakeholder engagement and
Civils contracts
A programme has been developed for all the different components.

59. Thank You
Tshepo Kgobe