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Jun 23, 2011

24/06/2011 (On-The-Air)

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Every Friday morning, SAfm’s AMLive’s radio anchor Gillian De Gouveia speaks to Martin Creamer, publishing editor of Engineering News and Mining Weekly. Reported here is this Friday’s At the Coalface transcript:

De Gouveia: The final countdown has begun for the launch of the next phase of South Africa’s pioneering Gautrain. Tell us a bit about that.

Creamer: The second phase is now coming in and that means that all ten stations will be used, that is the stretch from Pretoria to Johannesburg that we have been waiting for. The initial stretch from Sandton to OR Tambo Airport attracted 2,9-million commuters in the first year.

That was above expectations, but where the falldown has been is on the buses, where only 260 000 people used the buses, which is less then 10%. If you look at the number of people that just used the airport it is not really a good reflection on the bus situation, because it is not a normal commuter sort of demand.

They are looking for the Pretoria-Johannesburg section to normalise demand for buses and they are hoping that that demand will lift. In the meantime, all the stations have extension possibilities and although they are not talking expansion at the moment, unofficially they are hoping that there will be an expansion of this Gautrain from Johannesburg Park Station into Soweto.

Irrespective of that, there will be four additional stations to those ten, but that is on the existing line and its at Modderfontein, Midrand and also University experimental park in Pretoria and one other at the South African Mint in Centurion.

De Gouveia: Have they done any projections in terms of the number of people that they expect to use the line.

Creamer: Yes, in fact that projection has lifted, which is quite interesting. Originally when they planned in 2005, they said that there will be 104 000 passengers a day and now in 2011 they are looking at 135 000 passenger per day, so at least it is an uplift.

De Gouveia: South Africa’s economic growth rate is falling way behind that of Sub-Saharan Africa. Tell us what is going on with that.

Creamer: The World Bank has just reported us as laggard in terms of recovering our growth rate. The rest of Sub-Saharan Africa is now growing at about 2 % faster then we are on a basis of 2010. They are looking at South Africa recovering to about 3,5 % in 2011, that is the gross-domestic product (GDP) growth.

That is a little bit more optimistic then our own Treasury, which is looking at about 3,4 % and then going to 4,1 % in 2012 and 2013 to 4,4 %. That is definitely behind the rest of Sub-Saharan Africa and if you look at the medium-term projections, excluding South Africa from that Sub-Saharan Africa, they are looking at between 5,9 % and 6,6%.

So even when we recover, it looks like we will still be 2 % behind the rest of Sub-Saharan Africa. Some of the countries in that region are really growing like Topsy, but obviously off a low base.

We look at the Republic of Congo being close to China levels of growth at 9,1 %. Even Rwanda in 2010 grew 7 % and Ethiopia around 7 % as well. So, we definitely need an injection of activity in Southern Africa. We are coming to be seen as the laggard and they don’t have a lot of expectations for us.

De Gouveia: Why do you think that is? Are there any indications as to why the economic growth rate is falling behind?

Creamer: We could have a change to this quite quickly. We have troubles in North Africa, we do have the oil situation and obviously it is dependant on that and if we have an oil price that goes up another $50 per barrel it will knock about 0,7 % off the projections. Africa also benefitted on the food front, they had a bumper crop in 2010, because climatic conditions where good. Whether that is going to be repeated or not is a moot point.

De Gouveia: There is other news coming in that America is funding a new Southern African rail initiative aimed at promoting intra-African trade. What is that all about?

Creamer: The command coming from President Obama himself was that any trade-related infrastructure that the Americans can help with in Africa they should concentrate on that. We see now the bit between the teeth by the US Trade and Development Agency at the Agoa meeting saying let us concentrate on rail networks in order to boost this intra-Africa trade.

They are saying that one of the impediments is this infrastructure. They just launched a Southern Africa regional rail initiative which they want to have a reverse trade interface where they take the officials from African railways to the United States and let them interface with some of the big suppliers and stimulate some activity that will result in better rail networks in South Africa in order to boost this intra-Africa trade.

They have already done quite a lot of integration in West Africa and they are doing something in East Africa and they want to now bring it down to Southern Africa, as well. It comes against the background of this programme that we have got to try and integrate more of the trade blocs within the region.

We know East Africa, Southern Africa there was a big meeting in Johannesburg recently to try and do things there and hopefully we will eventually reach this target of more trade between Africans themselves and having the rail infrastructure to do it and the port capability.

De Gouveia: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly, he’ll be back with us at the same time next week.

Edited by: Creamer Media Reporter
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