Govt pays R830m in Gautrain subsidies

18th June 2013 By: Irma Venter - Creamer Media Senior Deputy Editor

Government had paid a monthly ridership guarantee to Gautrain operator, the Bombela consortium, since June 7, last year, amounting to R831.4-million by the end of March, Transport Minister Ben Martins on Tuesday noted in a written response to a question posed in Parliament.

Gautrain Management Agency (GMA) CEO Jack van der Merwe said in May that the monthly patronage guarantee had been steadily dropping since last year, as the result of an increasing ridership on the public transport system.

Average weekday passenger trips on the train increased from 26 000 at the beginning of April 2012 to 42 000 at the end of March.

According to the agreement between government and Bombela, signed at the start of the R26-billion project, a patronage guarantee was payable to the operator to ensure it covered all its costs, while still making a reasonable profit.

It had been expected that the guarantee payable would decrease as fare box income increases, with a 50:50 profit-sharing system between government and Bombela applicable once the fare box income reached a level where all Bombela’s costs were covered.

These costs included operational costs, maintenance and replacement costs and the servicing of loans. Income included fare box revenue, value-add income (such as advertising revenue).

The patronage guarantee served to make up the shortfall.

Van der Merwe said public transport was subsidised worldwide, and that the Gautrain was no different. Metrorail is also heavily subsidised, at roughly two-thirds of ticket costs.

He expected to reach the profit-sharing phase of the concession “in a few years’ time”.

Martins also noted in his Parliamentary response that there were no plans to increase the number of stations in the Gautrain system in the short term. However, provision had been made for possible stations at Modderfontein, on the east–west service, and Samrand, on the north–south service.

He said a property developer would provide the capital for the Modderfontein station.

He also noted that Bombela was investigating the technical feasibility and associated costs to introduce an earlier train and a later train between Sandton and OR Tambo International Airport, without impacting on the contractual engineering/maintenance hours.

“The concessionaire indicated its willingness to consider paying for this, but reserved the option to request a possible contribution from the GMA. Discussions and investigations are continuing to further extend the operating hours, but there is no definite plan yet.”