VZCZCXRO7383
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSA #0737/01 1001149
ZNR UUUUU ZZH
R 091149Z APR 08
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 4080
INFO RUCPDC/DEPT OF COMMERCE WASHDC
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

UNCLAS SECTION 01 OF 02 PRETORIA 000737 
 
SIPDIS 
 
SENSITIVE BUT UNCLASSIFIED 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD ELTN EIND EINV SF
SUBJECT: GAUTRAIN CEO PROVIDES UPDATE ON ITS RAPID RAIL PROJECT 
LINKING JOHANNESBURG AND PRETORIA 
 
 
¶1. (U) Summary. Gautrain CEO Jack van der Merwe outlined strategic 
objectives and current project developments for the Gauteng 
Province's new rapid rail project at the National Press Club on 
April 1, 2008.  Van der Merwe expected the first-phase of the 
project to be completed in time for the 2010 FIFA World Cup, despite 
delays due to electricity shortages.  He described the project's 
impact on sustainable growth and addressed the issue of improving 
the image of public transport.  Van der Merwe conceded that its 
target market segment is limited and further investments will have 
to be made to improve public transport infrastructure and safety to 
assure commuters that this is a preferred means of transport.  End 
Summary. 
 
---------------- 
Project Overview 
---------------- 
 
¶2. (U) Gautrain CEO Jack van der Merwe provided a briefing on the 
Gauteng Province's new rapid rail project at the National Press Club 
on April 1, 2008.  Van der Merwe outlined the project's strategic 
objectives and provided an update on the status of project 
developments.  The Gautrain will link Pretoria and Johannesburg with 
ten stations.  The 80-kilometer route will have three anchor 
stations: one at OR Tambo International Airport and one each in 
central Johannesburg and Pretoria.  The airport link will provide 
non-stop service between OR Tambo and Sandton Station.  Eight other 
stations at Rosebank and Marlboro in Johannesburg, at Rhodesfield in 
Kempton Park, at Midrand, at Centurion, and at Pretoria Station and 
Hatfield in Pretoria will transport commuters between Pretoria and 
Johannesburg. 
 
¶3. (U) Strategic objectives include the promotion of economic growth 
through the decongestion of Gauteng traffic, business tourism, and 
Black Economic Empowerment (BEE).  To date, the project has created 
28,000 jobs and 2,000 apprenticeships.  He expected job creation to 
total 93,000 and to contribute R6 billion ($780 million) to business 
sales by the time the Gautrain project is completed.  Van der Merwe 
stated that the project would be contributing between 0.7-1.0 
percent to gross domestic product (GDP) growth during a five-year 
period.  Signs of increased economic development are already visible 
near the Midrand and Marlboro stations.  He noted that the Gautrain 
Project is the second largest Public-Private Partnership (PPP) in 
the world and the largest transport PPP. 
 
-------------------------- 
Gautrain on Track for 2010 
-------------------------- 
 
¶4. (U) Van der Merwe expected the OR Tambo airport link to be 
completed in time for the 2010 FIFA World Cup, despite delays due to 
load shedding activities by Eskom.  The project timeline had some 
built-in delays and he stated that construction had not come to a 
complete standstill.  Gautrain's 43 construction sites have 
generators on-site and are not completely reliant on Eskom. However, 
an area of special concern is Rosebank, where the Gautrain's tunnel 
boring machine runs completely on electricity. Eskom has provided 
Guatrain with a predictable four-hour window for power disruptions 
at this site.  The project has scheduled maintenance for the machine 
to coincide with this window to minimize disruptions.  He conceded 
that certain portions of the construction were behind schedule.  He 
hoped to make up for lost time since other sections were running 
ahead of schedule. Van der Merwe also noted that the Guatrain Rapid 
Rail system will need steady a power supply once it is operational. 
 
¶5. (U) The trains for the Gautrain link are being constructed in 
Q5. (U) The trains for the Gautrain link are being constructed in 
Darby, England and the first train is expected to arrive in October 
¶2008.  Van der Merwe stated that construction has begun on all ten 
Gautrain stations.  Spending on the Gautrain Project in the 2006/07 
financial year was R5.6 billion ($727 million).  The forecasted 
spending for financial year 2007/08 is R7.7 billion ($1.1 billion). 
The total budget for the project is R25 billion ($3.2 billion). 
 
----------------------------------------- 
Promoting Sustainable Growth and Changing 
Public Perceptions 
----------------------------------------- 
 
¶6. (U) Van der Merwe described the Gautrain link as the "flagship 
public transport project of national importance" since it would 
stimulate growth and reduce traffic congestion in a booming 
province.  He explained that Gauteng Province represented 1.46 
percent of South Africa's land mass, but accounted for 33 percent of 
South African and 10 percent of all African GDP.  According to Van 
der Merwe, the traffic congestion in Gauteng Province is growing by 
seven percent per year.  Therefore, Van der Merwe advocated for 
improving and linking the existing public transport infrastructure. 
He explained that the Gautrain Project would be linked to other 
existing public transportation networks in South Africa.  Van der 
Merwe also noted that the Cabinet had recently approved a rapid 
 
PRETORIA 00000737  002 OF 002 
 
 
transport link for the Cape Town International Airport. 
 
¶7.  (U) Van der Merwe spoke about the need to improve the image of 
public transportation.  He explained that currently there is a 
captive public transport audience.  He noted that "spatial 
development has occurred in a way that poor South Africans are 
housed far from city centers and have to pay a lot for transport to 
and from work."  Van der Merwe envisioned moving toward a public 
transport system similar to European models.  He emphasized that 
South African public transport should be based on a "choice model, 
not a captive audience model".  The "market segment that Gautrain is 
targeting is the one that currently drives between Pretoria and 
Johannesburg.  The cost of a one-way ticket between the cities will 
be about R19 ($2.50).  The one-way ticket between OR Tambo Airport 
and Sandton Station will be about R80 ($10.50). 
 
¶8. (U) Van der Merwe also noted that public transportation had to be 
predictable for effective utilization.  He said that the problem 
with the current South African Metrorail system was its 
unpredictable service.  The Gautrain trip between Pretoria and 
Johannesburg would take approximately 40 minutes and would run on a 
predictable schedule.  The Gautrain system will include 
park-and-ride facilities and 150 buses to provide local transport in 
a ten-kilometer radius around each station.  Consumers will be able 
to utilize the same train tickets to access these buses. 
 
¶9. (U) In response to media questions, Van der Merwe agreed that 
safety concerns had to be addressed to improve public perception and 
utilization.  The Gautrain will incorporate safety features similar 
to the Jubilee line in London.  Four hundred closed-circuit TVs and 
300-500 security personal will be monitoring the stations and 
trains.  He also commented that the SAG is considering reinstating 
its Railway Police to improve public transport safety. 
 
¶10. (SBU) Comment.  The Gautrain Rapid Rail Project aims to provide 
improved public transport in the Gauteng Provence in time for the 
2010 FIFA World Cup and to support long-term economic development. 
However, challenges such as access to adequate power supplies will 
affect its ability to deliver the project on time and operate on a 
predictable basis.  Gautrain management also concedes that its 
target market segment is limited, that further expansions to the 
rail system need to be made, and that improvements to existing 
public transport systems will have to be made.  A final challenge 
for this project is the poor state of public security in Gauteng 
Province.  Very few members of the targeted segment are willing to 
use the existing Metrorail system due to concerns for their personal 
safety.  A few highly publicized muggings of business executives on 
their way to work are all that would be needed to turn this showcase 
public transport project into an embarrassing white elephant in the 
Gauteng government's front yard.  End Comment. 
 
 
END TEXT 
 
BOST