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Jul 02, 2009

Gautrain to cost extra R300m – Van der Merwe

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Gautrain Management Agency CEO Jack van der Merwe speaks about the rapid-rail project (02/07/09) Cameraperson: Nicholas Boyd; Video editing: Darlene Creamer.
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Inflationary pressures had seen the cost of the Gautrain rapid-rail link escalate by R300-million to reach R25,4-billion, said Gautrain Management Agency CEO Jack van der Merwe on Thursday.

He noted that the public-private partnership had modelled the project on 4,5% to 5% inflation when it was first announced, but that the recent jump in inflation to between 8% and 8,5% had added to government's bill for the project.

Government's portion of the original R25,1-billion bill was R21,9-billion, with Bombela, the concessionaire building the project, responsible for the rest.

However, inflationary costs accrued to government, and not Bombela.

Van der Merwe also noted that a decision would have to be made on whether phase one of the project, linking Sandton and the OR Tambo International Airport (ORTIA) needed a cash injection to be finished in time for the 2010 FIFA World Cup.

Bombela had in the past stated that it would be nearly impossible to finish by May 2010 - with the system then ready for the June kick-off - adding that it had never been contractually obliged to do so.

Van der Merwe said the two-phased rail project, set to link Tshwane, Johannesburg and ORTIA by 2011, had, indeed, never been a 2010 project. The project was announced in 2000, with the FIFA World Cup awarded only in 2004.

However, he added that there was a "need and desire" from government to finish phase one of the project in time for the global sports event.

"We are talking to the concessionaire to accelerate the project," said Van der Merwe.

"Depending on negotiations and cost implications – we'll have to see if we'll pay to have it ready."

He said that he had been hopeful to make an announcement on the possible fast-track of the project this month, but that he was now targeting August or, at the very least, the next three months.

The Gautrain project was around 65% completed, with an estimated R17,5-billion already spent.

Edited by: Creamer Media Reporter
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