Welcome to the

1
Welcome to the UDZ TAX INCENTIVE
CONFERENCE Day 1 18 Aug 05
2
Gautrain Rapid Rail LinkPresentation at the
Conference on Tax Incentives in the
Johannesburg UDZ

• Jack van der Merwe (Pr. Eng)
• Project Leader Gautrain
• Chief Executive Public Private Partnerships
• Gauteng Provincial Government

3
Overview of Gautrain its Impact on the
Johannesburg CBD

• Strategic economic infrastructure initiatives
• Objectives
• Description of the project
• Benefits of the project to Johannesburg
• During construction
• During operation
• Developments around the station
• Accessibility of the CBD and UDZ

4
Strategic economic infrastructure initiatives
5
Strategic Economic Infrastructure Initiatives

• Various initiatives of the Department of Finance
  and Economic Affairs such as Blue IQ, Gautrain
  and the GPG Precinct, GEDA
• Development of the Gautrain Provincial Government
  to promote a smart province
• Projects in the Johannesburg UDZ
• Gautrain Rapid Rail Link and GPG Precinct (DFEA
  PPP Unit)
• Constitutional Hill (Blue IQ and JDA)
• Newtown (Blue IQ and JDA)
• City Deep Transport Logistics Hub

6
Proposed Provincial EconomicDevelopment Strategy

• Existing economic strengths
• Mining
• Heavy Industry
• Financial Banking sector
• Proposed strategy
• Smart industries - Gauteng the smart Province
• Move toward high value-added manufacturing
• Enhancing the business services (Finance
  Banking) sector and business tourism

7
Objectives of the Gautrain Project
8
Development Goals

• Economic growth, development and job creation
• Must meet other goals of Government (SME
  promotion, Business tourism, BEE, etc.)
• To promote business tourism by means of the link
  between JIA and Sandton

9
Transportation Goals

• Alleviate severe traffic congestion (traffic
  volumes in corridor growing at 7 p.a. for more
  than a decade)
• Show Governments commitment to the promotion of
  public transport (National Land Transport
  Transitional Act, Act 22 of 2000)
• Improve the image of public transport with this
  project and attract more car users to public
  transport
• To link to the Tshwane Ring Rail Project, linking
  Mamelodi, Atteridgeville and Soshanguve /
  Mabopane
• Part of holistic transport plan and network for
  Gauteng

10
2000 Northbound and Southbound Vehicle Volumes
11
2005 Northbound and Southbound Vehicle Volumes
12
Spatial Development and Urban Planning Goals

• To contribute towards urban restructuring,
  shortening travel distances and improving city
  sustainability
• Stimulate the renovation and upliftment of the
  Johannesburg and Tshwane CBDs
• Link the main economic nodes in Gauteng with JIA

13
Integration between railway and urban environment
14
Overview of the Proposed System
15
Hatfield
Pretoria
Centurion
Midrand
Marlboro
Sandton
Preferred Route
Rhodesfield
Anchor Stations
JIA
Rosebank
Stations
Airport
Park Station
16
High quality of modern rail systems
17
Major construction works associated with rail
systems
18
Rail Services Specified
19
PPP Projects

• Gautrain is a PPP Project where public sector
  resources are expanded by Private Sector finance
  for the building of infrastructure for
• Service delivery
• Job creation
• Fighting poverty
• Multiplier effect in economy

20
PPP Components

• Technical content
• Financial proposal
• Legal mark-up
• Socio-economic Development

21
The Seven Stages of a PPP Project

• Enthusiasm
• Promises programmes
• Disillusionment
• Panic
• Hunt for the guilty
• Punishment of the innocent
• Reward for those who had nothing to do with it

22
Johannesburg Park Station
23
Johannesburg Park Station
24
Johannesburg Park Station Location
25
Station Definitions (1)

• Rail Functional Area
• Railway functional elements, such as fare
  collection and ticket sales for exclusive use of
  passengers
• Station Precinct
• Development of stations to serve the Gautrain
  system, such as station building, parking and
  modal transfer facilities
• Impact Area
• Area where land use is expected to change to
  capitalize on opportunities created by the
  Gautrain, e.g. hotels to serve JIA air passengers

26
Station Definitions (2)

• Influence Area
• Area where majority of patrons are located and
  where land development may be diverted to
  increase patronage, e.g. residential
  densification
• Catchment Area
• Area from where patrons are attracted and served
  by feeder and distribution services
• Impact Area and Influence Area create
  opportunities for private sector to capitalize on
  benefits of the Gautrain

27
Functional Area of Johannesburg Park Station

• CBD (immediately south of station)
• Transport related uses and services at the
  station
• SARCC, minibus taxi, buses, long distance
  passenger rail, tour coaches
• Newtown south-west of station
• Mixed-use offices and residential uses in
  Braamfontein, including Johannesburg Civic Centre
• Social and cultural uses surrounding the station

28
Transport Linkages at Johannesburg Park Station

• Municipal roads that serve pedestrians, cyclists,
  private vehicles and road-based public transport
• Minibus taxi services
• Bus services
• Tour coach operations
• Commuter service provided by metro rail (SARCC)
• Long distance rail passenger services

29
Feeder and Distribution Services

• 6 Routes
• Auckland Park
• Parktown / Bellevue
• Wemmer Pan
• Booysens
• CBD Distribution west
• CBD Distribution east
• 2000 Passengers Year 5
• Urban Development Zone well-served by feeder and
  distribution services

30
Train Service Capacity Requirement Johannesburg
Park Station

• Year 5 3 200 peak hour passenger movements
• Year 30 5 600 peak hour passenger movements

31
Modelled Journey Time And Fares
32
Parking Requirements at Johannesburg
33
What will the Economic Impact be?
34
Vision for Johannesburg Park Station

• Functional area
• Improve marketability of Johannesburg CBD as
  cultural and commercial hub from African and
  International perspective
• Regeneration of CBD as place of work through high
  quality public transport access
• Promote tourism within CBD

35
Station Functional Area Guidelines

• Developed in consultation with Municipality as
  part of the Gautrain Rapid Rail Link planning
  process
• Catalyst to create compact city, limit urban
  sprawl and utilize urban land and infrastructure
  more effectively and efficiently
• Stations are key points of intervention
• Establish new urban form that embraces the
  Gautrain system
• Opportunities
• Establish mixed land-use generate trips
  throughout the day
• Increase density

36
Current Land Uses in Impact Area (1 km X 1km
100 ha)
37
Densification and Land Use Model
Reduction in office space projected
38
Economic Impact in Johannesburg CBD CAPEX
CATALYST TO ESTABLISH NEW REAL PRIVATE SECTOR
INVESTMENT
Real estate development opportunities for new
renovated office residential and business
space Transport Retail Trade
Accommodation Financial Services Business
Serices
Increased business sales estimated at R 1.1
billion
39
Economic Impact in Johannesburg Greater CBD
Influence Area
NEW METROPOLITAN-WIDE TRANSPORT FACILITY
INCLUDING COMPREHENSIVE EXISTING FACILITIES WILL
CREATE A DEMAND FOR NEW ECONOMIC ACTIVITY
Private and public sector response to new demand
through Increased intensity in the flow of
people Demand or accommodation close to
stations Fast and reliable access directly to
the CBD Increased Disposable Income
Increased demand for retail trade, business
personal services
Translate into new and revitalized CBD office and
retail space and demand for accommodation

40
CBD Access to railway
41
Economic Impact in Johannesburg CBD
SUPPORT ECONOMIC ACTIVITY AND SOCIAL SERVICES
BASED ON IMPROVED TRAVEL ACCESSIBILITY
Focal point for development within walking
distance from station Increase in property
values close to stations Access to cultural,
social and recreational facilities Fast and
reliable access to JIA airport More socially
inclusive Land use and transport integration
Reduced need for CBD parking
42
Some International Examples/Experiences
43
International Experience

• Toronto Property values around stations are
  double the values in areas without station access
• Washington Stations became focal points of
  commercial redevelopment and promoted substantial
  new development in surrounding areas
• Chicago Rail projected to generate 8-10
  billion. Pulls together regional economy and
  promotes intra-regional business growth
• Hong Kong Extended rail system resulted in
  strong inner-city development and affordable
  housing

44
Development around Hong Kong Stations
45
Socio-Economic Development
46
Socio-Economic Development (1)

• BBBEE
• Equity
• Ownership
• Directorship
• Training development
• Sub contracting
• Procurement
• Job creation

47
Socio-Economic Development (2)

• Promotion of SMMEs
• Focus on women, youth and people with
  disabilities
• Local content
• Local labour
• Investment / focus on marginalised areas

48
Procurement Process
49
RFQ 2 Pre-Qualified Bidders (May 2002)

• Bombela Consortium
• Bombardier Transportation
• Bouygues Travaux Publics
• Murray Roberts
• RATP International
• Loliwe Rail Contractors
• Loliwe Rail Express
• Standard Bank
• RMB
• ABSA

• Gauliwe Consortium
• CAF
• Dragados
• Grinaker LTA
• Metro de Madrid
• CANAC
• Ufudo
• Tirisano
• Nedbank
• Investec

50
Procurement Process (3)

• Announcement by Premier Shilowa of Bombela as the
  preferred bidder on 2 July 2005

51
Financial Closure

• Negotiations with preferred bidder commenced
  after the announcement on 2 July 2005
• This process will take 6 months
• The essence of this process is to finalise the
  concession agreement
• The tender phase will only come to a conclusion
  at the signing of the concession agreement
• Negotiations with lenders will also take place
  inthis phase

52
Schedule for Implementation
53
Timelines
54
2010 SoccerWorld Cup
55
Ready for 2010?

• Gautrain formed an integral part of South
  Africas bid document
• Gautrain was reported on extensively by FIFA in
  its evaluation and final recommendation
• Must form the backbone of the public transport
  system in Gauteng for the World Cup
• Both bidders indicated that they will complete
  the full system by Feb 2010 ( but it will be very
  tight)

56
Way Forward
57
WAY FORWARD

• Continued co-operation with Johannesburg
  regarding the development of station areas
• Implementation of project
• Operation
• Environmental Management Plan (EMP)
• Participation of Private sector to effect urban
  restructuring and economic development

58
Thank You
Our wealth did not create our transport
infrastructure it is our transport
infrastructure which created our wealth.
J F Kennedy

• www.gautrain.co.za