1. Welcome to the UDZ TAX INCENTIVE CONFERENCE Day 1 – 18 Aug 05

2. Gautrain Rapid Rail Link Presentation at the Conference on Tax Incentives in the Johannesburg UDZ Jack van der Merwe (Pr. Eng) Project Leader: Gautrain Chief Executive: Public Private Partnerships Gauteng Provincial Government

3. Overview of Gautrain & its Impact on the Johannesburg CBD Strategic economic infrastructure initiatives Objectives Description of the project Benefits of the project to Johannesburg –During construction –During operation –Developments around the station –Accessibility of the CBD and UDZ

4. Strategic economic infrastructure initiatives

5. Strategic Economic Infrastructure Initiatives Various initiatives of the Department of Finance and Economic Affairs such as Blue IQ, Gautrain and the GPG Precinct, GEDA Development of the Gautrain Provincial Government to promote a smart province Projects in the Johannesburg UDZ: –Gautrain Rapid Rail Link and GPG Precinct (DFEA PPP Unit) –Constitutional Hill (Blue IQ and JDA) –Newtown (Blue IQ and JDA) –City Deep Transport Logistics Hub

6. Proposed Provincial Economic Development Strategy Existing economic strengths : –Mining –Heavy Industry –Financial & Banking sector Proposed strategy: –Smart industries - Gauteng the “smart” Province –Move toward high value-added manufacturing –Enhancing the business services (Finance & Banking) sector and business tourism

7. Objectives of the Gautrain Project

8. Development Goals Economic growth, development and job creation Must meet other goals of Government (SME promotion, Business tourism, BEE, etc.) To promote business tourism by means of the link between JIA and Sandton

9. Transportation Goals Alleviate severe traffic congestion (traffic volumes in corridor growing at 7% p.a. for more than a decade) Show Government’s commitment to the promotion of public transport (National Land Transport Transitional Act, Act 22 of 2000) Improve the image of public transport with this project and attract more car users to public transport To link to the Tshwane Ring Rail Project, linking Mamelodi, Atteridgeville and Soshanguve / Mabopane Part of holistic transport plan and network for Gauteng

10. 2000 Northbound and Southbound Vehicle Volumes

11. 2005 Northbound and Southbound Vehicle Volumes

12. Spatial Development and Urban Planning Goals To contribute towards urban restructuring, shortening travel distances and improving city sustainability Stimulate the renovation and upliftment of the Johannesburg and Tshwane CBDs Link the main economic nodes in Gauteng with JIA

13. Integration between railway and urban environment

14. Overview of the Proposed System

15. Rosebank Sandton Marlboro Rhodesfield JIA Midrand Centurion Pretoria Hatfield Preferred Route Anchor Stations Stations Airport Park Station Rosebank Park Station Sandton Marlboro Midrand Centurion Pretoria Hatfield Rhodesfield JIA

16. High quality of modern rail systems

17. Major construction works associated with rail systems

18. SERVICEPEAK FREQUE NCY OFF- PEAK FREQUE NCY JOURN EY TIME General passenger service Johannesburg Park to Hatfield Station 12 minute20 minute42 minute General passenger service Sandton to Rhodesfield Station 21 minute30 minute15 minute Airport Service between Sandton and JIA Station 21 minute30 minute15 minute Rail Services Specified

19. PPP Projects Gautrain is a PPP Project where public sector resources are expanded by Private Sector finance for the building of infrastructure for: –Service delivery –Job creation –Fighting poverty –Multiplier effect in economy

20. PPP Components Technical content Financial proposal Legal mark-up Socio-economic Development

21. The Seven Stages of a PPP Project Enthusiasm Promises & programmes Disillusionment Panic Hunt for the guilty Punishment of the innocent Reward for those who had nothing to do with it

22. Johannesburg Park Station

24. Johannesburg Park Station Location

25. Station Definitions (1) Rail Functional Area –Railway functional elements, such as fare collection and ticket sales for exclusive use of passengers Station Precinct –Development of stations to serve the Gautrain system, such as station building, parking and modal transfer facilities Impact Area –Area where land use is expected to change to capitalize on opportunities created by the Gautrain, e.g. hotels to serve JIA air passengers

26. Station Definitions (2) Influence Area –Area where majority of patrons are located and where land development may be diverted to increase patronage, e.g. residential densification Catchment Area –Area from where patrons are attracted and served by feeder and distribution services Impact Area and Influence Area create opportunities for private sector to capitalize on benefits of the Gautrain

27. Functional Area of Johannesburg Park Station CBD (immediately south of station) Transport related uses and services at the station –SARCC, minibus taxi, buses, long distance passenger rail, tour coaches Newtown south-west of station Mixed-use offices and residential uses in Braamfontein, including Johannesburg Civic Centre Social and cultural uses surrounding the station

28. Transport Linkages at Johannesburg Park Station Municipal roads that serve pedestrians, cyclists, private vehicles and road-based public transport Minibus taxi services Bus services Tour coach operations Commuter service provided by metro rail (SARCC) Long distance rail passenger services

29. Feeder and Distribution Services 6 Routes –Auckland Park –Parktown / Bellevue –Wemmer Pan –Booysens –CBD Distribution west –CBD Distribution east 2000 Passengers Year 5 –Urban Development Zone well-served by feeder and distribution services

30. Train Service Capacity Requirement: Johannesburg Park Station Year 5 : 3 200 peak hour passenger movements Year 30: 5 600 peak hour passenger movements

31. DESTINATI ON JOURNEY TIME DISTANCECOST Rosebank4.2 minutes6 kmR 7.44 Sandton8.0 minutes10.2 kmR 8.45 Marlboro12.5 minutes 15.7 kmR 9.77 Midrand21.1 minutes 27.8 kmR 12.67 Centurion33.1 minutes 45.5 kmR 16.92 Pretoria41.1 minutes 56.6 kmR 19.58 Hatfield46.1 minutes 62.7 kmR 21.05 Rhodesfiel d 25 minutes30.0 kmR 13.20 JIA (Airport)25 minutes30.6 kmR 72.60 Modelled Journey Time And Fares

32. PARKING REQUIREME NTS YEAR 5YEAR 15 Park-and- Ride800 bays1700 bays Kiss-and-Ride2 bays Short Term Parking 5 bays Car Hire15 bays20 bays Public Transport 3 bays5 bays Parking Requirements at Johannesburg

33. What will the Economic Impact be?

34. Vision for Johannesburg Park Station Functional area –Improve marketability of Johannesburg CBD as cultural and commercial hub from African and International perspective –Regeneration of CBD as place of work through high quality public transport access –Promote tourism within CBD

35. Station Functional Area Guidelines Developed in consultation with Municipality as part of the Gautrain Rapid Rail Link planning process Catalyst to create compact city, limit urban sprawl and utilize urban land and infrastructure more effectively and efficiently Stations are key points of intervention Establish new urban form that embraces the Gautrain system Opportunities –Establish mixed land-use – generate trips throughout the day –Increase density

36. Current Land Uses in Impact Area (1 km X 1km = 100 ha) STATUS QUO AREA m² PROPORT ION AVG HEIGHT Residential 600 000 17%8.5 Offices1 590 000 47%8.3 Retail 150 000 4%1.1 Hotel / Conference 90 000 3%8.6 Community 410 000 12%3.6 Other 590 000 17%NA TOTAL3 430 000 100%

37. Densification and Land Use Model FUTURE SCENARIO AREA m² PROPORT ION AVG HEIGHT Residential1 100 000 31%8.5 Offices *1 000 000 28%9.3 Retail 160 000 5%1.2 Hotel / Conference 150 000 4%9 Industry 50 000 1%1 Community 450 000 13%4 Other 600 000 18%NA TOTAL3 510 000 100%NA * Reduction in office space projected

38. CATALYST TO ESTABLISH NEW REAL PRIVATE SECTOR INVESTMENT Increased business sales estimated at R 1.1 billion Real estate development opportunities for new & renovated office residential and business space: * Transport * Retail Trade * Accommodation * Financial Services * Business Serices Economic Impact in Johannesburg CBD CAPEX

39. NEW METROPOLITAN-WIDE TRANSPORT FACILITY INCLUDING COMPREHENSIVE EXISTING FACILITIES WILL CREATE A DEMAND FOR NEW ECONOMIC ACTIVITY Translate into new and revitalized CBD office and retail space and demand for accommodation Private and public sector response to new demand through: * Increased intensity in the flow of people * Increased intensity in the flow of people * Demand or accommodation close to stations * Demand or accommodation close to stations * Fast and reliable access directly to the CBD * Fast and reliable access directly to the CBD * Increased Disposable Income * Increased demand for retail trade, business & personal services Economic Impact in Johannesburg Greater CBD Influence Area

40. CBD Access to railway

41. SUPPORT ECONOMIC ACTIVITY AND SOCIAL SERVICES BASED ON IMPROVED TRAVEL ACCESSIBILITY * Focal point for development within walking distance from station * Increase in property values close to stations * Access to cultural, social and recreational facilities * Fast and reliable access to JIA airport * More socially inclusive * Land use and transport integration * Reduced need for CBD parking Economic Impact in Johannesburg CBD

42. Some International Examples/Experiences

43. International Experience Toronto: Property values around stations are double the values in areas without station access Washington: Stations became focal points of commercial redevelopment and promoted substantial new development in surrounding areas Chicago: Rail projected to generate $8- 10 billion. Pulls together regional economy and promotes intra-regional business growth Hong Kong: Extended rail system resulted in strong inner-city development and affordable housing

44. Development around Hong Kong Stations

45. Socio-Economic Development

46. Socio-Economic Development (1) BBBEE –Equity –Ownership –Directorship –Training & development –Sub contracting –Procurement –Job creation

47. Socio-Economic Development (2) Promotion of SMME’s Focus on women, youth and people with disabilities Local content Local labour Investment / focus on marginalised areas

48. Procurement Process

49. RFQ : 2 Pre-Qualified Bidders (May 2002) Bombela Consortium –Bombardier Transportation –Bouygues Travaux Publics –Murray & Roberts –RATP International –Loliwe Rail Contractors –Loliwe Rail Express –Standard Bank – RMB –ABSA Gauliwe Consortium –CAF –Dragados –Grinaker – LTA –Metro de Madrid –CANAC –Ufudo –Tirisano –Nedbank –Investec

50. Procurement Process (3) Announcement by Premier Shilowa of Bombela as the preferred bidder on 2 July 2005

51. Financial Closure Negotiations with preferred bidder commenced after the announcement on 2 July 2005 This process will take 6 months The essence of this process is to finalise the concession agreement The tender phase will only come to a conclusion at the signing of the concession agreement Negotiations with lenders will also take place in this phase

52. Schedule for Implementation

53. Timelines RFQ- Process Investors Conference Announce pre-qualified bidders Announce Preferred & Reserve Bidder Construction Commence Prepare RFP documents Sep 2001 End April 2002 21 Oct 2002 29 Sep 2003 30 Sep 2003 Mid 2005 Late 2005 EIA - Process Financial Close EIA Report & Draft EMP ROD Infrastructure Act requirements Negotiate with Bidder(s) RFP Phase II RFP Phase I 29 Nov 2002 Proclamation and Land acquisition Final EMP ROD Appeals Detail Design RFP Phase III (BAFO) Apr 2004

54. 2010 Soccer World Cup

55. Ready for 2010? Gautrain formed an integral part of South Africa’s bid document Gautrain was reported on extensively by FIFA in its evaluation and final recommendation Must form the backbone of the public transport system in Gauteng for the World Cup Both bidders indicated that they will complete the full system by Feb 2010 ( but it will be very tight)

56. Way Forward

57. WAY FORWARD Continued co-operation with Johannesburg regarding the development of station areas Implementation of project Operation Environmental Management Plan (EMP) Participation of Private sector to effect urban restructuring and economic development

58. Thank You www.gautrain.co.za “Our wealth did not create our transport infrastructure; it is our transport infrastructure which created our wealth.” J F Kennedy