Gautrain's R100 million tax ticket

Gauteng provincial taxpayers are paying R100 million a month to subsidise the running of the Gautrain as the number of passengers has dropped over the past two years. The provincial grant, called a patronage guarantee, means the province subsides the difference between the income from passenger fees and what is actually spent running the train.

This will help cover operating and maintenance expenses and the private sector portion of the capital costs until the number of passengers is sufficient for fares to meet the operating costs. To reach this balance, the number of passengers riding the Gautrain needs to increase. The guaranteed amount has been raised from R821 million in 2013 to R1.099 billion in 2015 to now almost R1.6 billion for the 2017/18 financial year.

In the 2017/18 annual report, Gautrain Management Agency (GMA) chief executive Jack van der Merwe said: “The external environment remained volatile and the low rates of economic growth in the metropolitan areas served by the Gautrain impacted negatively on growth in passenger trips. “This slow rate of growth and other factors turned steady historical growth in Gautrain passenger trips from June 2010 into a net decline for both train and passenger trips in the 2017/18 financial year. Compared with the previous financial year, train passenger trips declined by 3.8% and bus passenger trips declined by 6.3%.

“This was despite the fact that targets of availability and punctuality were met at an average availability of 99.5% and an average punctuality of 98.6% for all trips scheduled for the financial year,” he reported." Ironically, one reason for the decline in passenger numbers is the congestion at peak hours on the trains, which often left people standing cheek by jowl. The threat of violence between e-hailing taxi services (such as Uber and Taxify) and metered taxi drivers outside or near Gautrain stations had deterred potential passengers from transferring between train and taxi modes.

However, in a Catch-22 situation, the GMA put out tenders last year for an additional 48 coaches, but all three shortlisted bidders failed. This was announced in December so the process has to start all over again and could take many months, which means that the new rolling stock intended to ease congestion could take years to materialise. GMA spokesperson Tlago Ramalepa conceded that the growth in passenger trips on the Gautrain had slowed considerably after several years of ­higher-than-expected growth. She reiterated that one of the reasons was the lack of capacity on trains in the peak morning and afternoon periods, when most commuters travel to and from work.

“Prior to commencing with the procurement of the Gautrain Project, the Gauteng provincial government prepared a comprehensive feasibility study and financial model. At that time, it was clear that, like the vast majority of passenger rail projects around the world, the Gautrain would require government financial support,” she said. This support was defined in two parts - the capital contribution that the province would have to make in the development period, and the patronage guarantee that the province would have to make during the operating period.

GMA’s response to managing the patronage guarantee, said Ramalepa, was to issue a variation notice to the concessionaire, Bombela, to procure more rolling stock and thereby increase train capacity. The process of procuring additional rolling stock, which was started in 2016, resulted in no bid being awarded towards the end of 2018. In terms of confidentiality undertakings in the bidding process, the GMA could not disclose the reasons for the assessment of non-compliance for bidders. Bidding will start again in the next few weeks, she added.

Since the start of operations in 2010, growth in train use increased to a peak of 1400190 passengers per month in May 2017. Growth in bus use increased to 458974 passengers per month during the same month.