Gautrain makes positive economic contribution to province, report shows

24th July 2015 By: Irma Venter - Creamer Media Senior Deputy Editor

The R27-billion Gautrain project has contributed around R20-billion to the provincial gross domestic product (GDP) over the six years it took to build the rapid-rail link, notes a KPMG Gautrain economic impact report.

Construction also sustained 121 800 jobs, and increased government revenue by an estimated R5-billion. Lower income households received around R2-billion during construction, mainly through wages and salaries, says the report.

It also notes that, for every R1 in new invest-ment into the economy by the Gautrain, an addi-tional 73c was added to the Gauteng economy and 16c to national government revenue.

Investment into the possible expansion of the Gautrain implies that an additional five jobs per R1-million spent will be sustained during construction.

Future expansion will also imply poverty alleviation in that 17% of additional household income generated will flow to low-income households.

When looking at current Gautrain operations, the system contributes R1.7-billion a year to provincial GDP, while sustaining about 6 000 jobs in Gauteng in 2013.

The system also increases government revenue by around R400-million a year, with around R200-million received by lower-income households, again mainly through wages and salaries.

For every R1 spent on operating the Gautrain, the provincial economy gains another 96c and the national economy 24c.

The Gautrain also improves the quality of life of the province’s residents, notes the report, reducing road congestion by cutting car trips per day by 21 300 trips.

Around 63 000 people use the Gautrain every weekday.

The KPMG report also notes that around R10-billion was invested in new developments and upgrades to retail centres in a 10 km radius around stations between 2009 and 2014. Around R1-billion was invested in office space.

Residential property saw an increase in property value of R12.9-billion.

Gauteng Roads and Transport MEC Ismail Vadi says that the results of the economic study are “extremely positive and better than we anticipated”.

“The study also shows that the Gautrain is not a system for the rich, as is often believed, as it benefits people from different income groups.”

Gautrain Management Agency CEO Jack van Merwe says the Gautrain operator currently receives around R900-million a year in subsidies from government.

He says seat churn on the Gautrain – the amount of times the same seat is ‘sold’ – is much less than originally envisaged, with commuters taking longer journeys than what was planned for the system.

This affects the fare box.

Van der Merwe emphasises, however, that all forms of public transport is subsidised.

“It is the same as to look at a 50-storey building and ask if the lift makes money. Without the lift that building would be ten storeys or less. And if it doesn’t work, the impact will surely be visible.”

He believes the KPMG study may assist in twisting the National Treasury’s arm to assist in funding an expansion to the Gauteng rail network, required in order to deal with the rapid urbanisation visible in the province.

The feasibility for the possible expansion programme is scheduled for completion by the middle of next year.