- The plans for an 149km expansion of the Gautrain are still awaiting approval from Treasury.
- It said this week that “alternative funding options” are being considered.
- The Gautrain Management Agency has proposed that vehicle licence fees and airport taxes as well as VAT be used for the project.
- For more stories, go to www.BusinessInsider.co.za
The plans for an 149km expansion of the Gautrain, which will see it reach Soweto, Lanseria and Mamelodi eventually, are still awaiting approval from Treasury – which this week said “alternative funding options” are being considered.
The coronavirus crisis has wreaked havoc on government’s finances. Government is expecting to this year earn R300 billion less in tax than it had expected, while it has promised to spend R500 billion to help the economy and citizens amid the pandemic. Money is extremely tight, but the Gauteng Management Agent said this week it is still confident the project will continue.
According to the Gautrain Management Agency’s proposed plans, released last year, government would have to contribute around 30% of the multi-billion rand budget needed for the expansion. With the original Gautrain, the government provided almost 90%.
It is hoped that the private sector will contribute 33% with the next planned expansion.
The rest may have to come from national levies such as vehicle licence fees and airport taxes as well as VAT – paid by people across South Africa, whether they use the high-end train system or not, the GMA proposes.
READ | The Gautrain wants to use levies paid by people across South Africa – such as vehicle registration fees – to fund much of its huge planned expansion
But government is already planning tax hikes of R40 billion in the next four years just to help prop up its finances following the coronavirus crisis. The first round of tax hikes will be announced in February.
The first phase of the expansion – which is supposed to start in 2024 - will see the network expand by 32km from Marlboro to Little Falls in Roodepoort. It will also consist of three new stations and an additional maintenance depot.
Phase 2 will see it expand into Soweto. When the expansion is completed, the network will stretch into Boksburg, Lanseria, Irene and Mamelodi.
The GMA says the expansion project is expected to create over 170 000 direct jobs, with Phase 1 being anticipated to secure over 30 000 jobs.
“Phase 1 has been submitted to National Treasury for Treasury Approval 1 (TA1) that will enable the commencement of the procurement phase of the project. The GMA is awaiting feedback on the TA1 application from National Treasury.”
For its part, Treasury this week said that “alternative funding options are being considered by the Gauteng Province working together with all stakeholders.”
Although the GMA anticipates that the project will commence “beyond the COVID-19 event”, the agency still has not named any contractors.
“The announcements regarding preferred and successful bidders and associated costs will be made after the conclusion of the procurement phase which will follow the required approvals from National Treasury.
“TA1 approval will however enable the commencement of project preparatory work required to enable the said procurement. Any specialist advisory services that the GMA may require for the undertaking of this procurement will be sourced through the public procurement process,” said the GMA.
New fares from the expansion are part of national treasury consideration and will be confirmed after approval.