Motorists set to pay for Gautrain expansion

Part of the multi-billion rand cost – because ‘people in cars don’t pay their fair share in terms of the taxes they pay’.
The ‘very ambitious’ five-phase expansion plan will take 20 to 30 years to complete. Image: Shutterstock

Motorists and taxpayers appear set to become the cash cow to enable the government to reduce its percentage of the funding of the multi-billion rand expansion of the Gautrain.

Gautrain Management Agency (GMA) CEO William Dachs said on Monday: “We firmly believe the people in cars don’t pay their fair share in terms of the taxes that they pay and the failure of the e-tolls system has perpetuated that problem.”

Dachs was commenting on the GMA’s engagement with National Treasury about the sources of funding for the Gautrain expansion project and the need to move people off the roads and away from carbon intensive modes of transport during a virtual panel discussion on the ‘Future of Rapid Rail in Gauteng and its Impact on Social and Economic Development’.

He said the GMA started its engagement with Treasury on the funding of the expansion with “a clean sheet of paper and [to] look at all the possible sources”.

“We looked at everything from general tax increases to fuel taxes to fuel levies to congestion charges, which haven’t happened in South Africa yet, all the way through to the more traditional funding sources,” said Dachs.

“We also looked at developer charges, bearing in mind that people who develop around existing Gautrain stations have seen massive increases in the values of their properties.

Most viable source

“We then did a quite detailed analysis of what each source could bring and which one of them would be the most viable,” he said.

Dachs did not comment on which of these sources was the most viable but said: “We would be looking at a blend of national government funding, provincial government funding, people who use the trains, private developers contribution as well as those who invest in the train itself.”

He confirmed that vehicle licence fees had been considered during the GMA’s engagement with Treasury but stressed that: “It’s not an infinite source.”

“Gauteng can’t become uncompetitive in terms of its vehicle licences compared to other provinces but there is a strong case to be made there,” he said.

Dachs said there is a strong willingness from private sector developers to invest in new stations provided they are transit orientated developments from which they can get a return.

He said they were obviously also looking at getting private sector investment in the infrastructure itself “because the people who use the trains will pay for them”.

‘Massive misconception’

Dachs stressed that there is a “massive misconception” that the people who use the current Gautrain are massively subsidised in terms of the operations cost, which is untrue.

He said there was a “close to 100% recovery” of the operating costs of the Gautrain from the money people pay to use it although “Covid-19 messed that up”.

Dachs said this high operating cost recovery rate goes a long way towards the long term financial sustainability of the Gautrain.

“The government subsidy to date has really been around the capital part of the Gautrain and we would look to continue that going forward,” he said.

Gauteng provincial borrowings and provincial budget allocations via national government accounted for 88% of the total cost of the first phase development of the Gautrain, with private sector debt only accounting for about 12% balance of the cost.

Reports have suggested the government wants to reduce its funding of the Gautrain expansion to 33% while former GMA CEO Jack van der Merwe said last year the plan was to increase private sector funding to 33%.

The GMA submitted plans about the Gautrain expansion programme to National Treasury in 2017.

Robust engagement

But Dachs stressed on Monday that Treasury did not cause a delay in the project and the GMA has had a real, good and robust engagement with Treasury about this huge and complex project.

He said two issues kept arising during these engagements: how to make it more accessible to more people without compromising its financial sustainability, and how it can be funded.

“It can’t just be 100% government funding. How do we build a private sector investment in here? How do we encourage people who benefit from a project like this to also contribute to it financially?

“We have answered those questions. It’s been a two-and-a-half year process in terms of engagement on it and, as we speak, we are just finishing the final study,” he said.

Development Bank of Southern Africa (DBSA) head of transport and logistics Cyprian Marowa said the DBSA is good at bringing together many institutions into the lending space.

Marowa said no individual bank can single-handedly develop infrastructure like the Gautrain and the DBSA is seen globally as a good partner for other institutions to come in and be part of the infrastructure projects in South Africa.

He admitted that Covid-19 has been “a spanner in the works” and money generally has become more expensive, with some projects delayed.

But Marowa said it is important “to keep your eye on the ball and take a long term view”.

‘Good project for any investor’

Marowa said that if the number of cash flows that could be generated from different aspects of the Gautrain expansion project are aggregated “you find that this would turn out to be a very good project for any investor”.

Transport analyst and economist Ofentse Hlulani Mokwena said there is a need for the government and other funders to be very conscious of the kind of risks they expose themselves to from a funding perspective because this will change the dynamics of their returns.

Mokwena said there will certainly be some controversial funding options and some options that are more attractive and more acceptable to the public.

He said this is something the government will have to balance, especially in order to negotiate a good allocation risk.

Mokwena added that the key issue is whether there are viable alternatives and whether this service will be attached to the existing system.

“That is going to be crucial because what you want is to be able … to ring-fence financing … and to justify that you have to have public buy-in.

“That is going to be crucial because with a project of this scale, the last thing you will want is risk on the infrastructure, on the programme, or even at a political level.

“So whatever the financing options that are decided on or pursued, the key here is to contain and manage the risk,” he said.

Deeper relationships?

Mokwena said there is also the risk of modal exclusion or parallelism and questioned why there was not a deeper relationship with, for example, bike sharing schemes, mini bus taxis and the existing bus services.

He said these modes of transport are essentially part of the discussion to justify digging into the public financing environment.

“It’s not just about the project but being able to manage the public perception, the allocation risk and making sure the project retains its social, economic and political viability. The numbers count but there is a lot more to it,” he said.

The current Gautrain network comprises 80km of rail along two route links: a link between Tshwane and Johannesburg and a link between OR Tambo International Airport and Sandton.

The expansion comprises another 150km of rail and a further 19 stations.

Dachs said the single conclusion the Gauteng provincial government came to in 2014 when it started working on its 25-year integrated transport master plan is that moving people to and from jobs in perpetuity on the roads is not going to work and rail has to be the backbone of a public transport system.

He said the five-phase Gautrain expansion plan was a very ambitious long term plan and this massive build programme will take 20 to 30 years to complete.

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I noticed that my firearm licences are up for renewal. Better get that done soonest.

Licenses? How many firearms do you own?

Time to hand in those guns and reduce crime in Saffa.

On Gautrain. These organisations must become self sufficient and must stop begging for handouts from govt and quasi govt.

I don’t do crime. Come get my guns.

You can never own enough.

Very clever idea…let’s get rid of all the legal arms. That way only criminals have guns. Peace and prosperity restored in Utopia.

Mr Watkins, there’s an American Western saying goes, which still applies to today:

“When guns are outlawed, only Outlaws will have guns”

A typical comment from a Government employee who works 7 hours a day, takes all his sick leave, doesn’t work week ends and probably takes two holidays a year, because there no one checks up on him..(their bosses do the same)

So lets see and analyze what we as tax payers contribute to nullify his stupid and ignorant comment:

1.Emissions Tax (By the way Vat is also levied on this tax..A tax on a tax..Once wrote to OUTA who ignored my letter)
2. Fuel Levy
3. Road accident fund levy
4. Income Tax
5. Toll fees (Essentially a Tax)
6. Vat on Toll fees
7. Vat on purchasing a vehicle
8. Vehicle Licences
9. Vat on Number Plates
10. Vat on the Gautrain ticket
11. Airport Taxes
12.Vat on Plane tickets

Thats to mention but a few.. For every R1 earned, Government takes 80c (And we live in a so called democracy?)

Reconsider your comment. If Government cuts the wage bill and the looting ends, there will be no need to run to the tax payer to fund projects

Unfortunately our State has failed and you dear sir are part of that system

Leave us alone, we’re battered, bruised and bankrupt, thanks to the wonderful ANC

You are one of the lucky ones to at least have one – or even more.

Excuse me, profess(or) of this and other non-senses: because ‘people in cars don’t pay their fair share in terms of the taxes they pay, the last time I checked, motorists pay all the taxes and levies that are imposed on the petrol and diesel that the government is due, they pay taxes on all items they use for their motoring needs, including toll and other fees needed. So, what these mysterious taxes that motorists are supposed to not be paying? Also, why are private motor car owners (citizens) funding an entity which makes profits for private individuals in the main? Why are these people making the payment/debt public and privitizing the profits for themselves only. If you want motorists to invest, send me a share certificate, but don’t give me this clap trap!!! Like all motorists, I pay all taxes and levies required of me by government, not a cent more, not a cent less. Period.

Let’s ignore the bald-faced lie about the tax burden on motorists and focus on the half-truth about Gautrain nearly recovering 100% of its operating costs. This conveniently glosses over the R2bn shortfall on mostly capital costs which is paid annually by the Gauteng Department of Transport. This clawback is a matter of fact set down in the operating agreement, so Dachs is either skirting the truth or unaware or it. Either would be lamentable, but facts are facts: without the taxpayer, Gautrain would be hopelessly insolvent. And now he wants more?

The railway’s problem is neither COVID-19, nor the lack of money. It’s that Gautrain was the wrong option, built in a fit of political vanity to avoid offending Mbhazima Shilowa by telling him the scheme was idiotic and it would be better to consider cost-effective mass transit options like low-speed rail and commuter coaches. To extend it to even less affluent areas than it currently serves would be to make the same mistake twice without taking a single step towards a genuine solution for Gauteng’s mass transit needs.

Regardless of Dachs’s opinions on taxation policy, Gautrain is fairly low on the list of state-subsidised economic sinkholes worthy of further fiscal largesse right now.

One should take this whence it comes; a public servant’s pie-in-the-sky wish list. It’s getting close to Christmas time. Who knows, this pure fantasy is his letter to Santa. Because there is absolutely zero chance that this fantasy will become reality in the next 20 years.

This Dach seems to be the new Nazir Alli, spewing the same lies and half truths, that were peddled in justifying the e-toll – not forgetting the all the accompanying bull. Mr Dach, please spend the night at my house, for free, and try and go anywhere the next morning with the help of anything other than a taxi (uber) or motor vehicle. Using a bicycle will be most unpleasant and dangerous at just about all times.

As Bertold Brecht waggishly commented on the East German regime:

“Some party hack decreed that the people
had lost the government’s confidence
and could only regain it with redoubled effort.
If that is the case, would it not be be simpler,
If the government simply dissolved the people
And elected another?”

Seems Dachs(hund) wants better taxpayers…

•Vat on the sale of the physical vehicle(all weight classes)
•General fuel levy
•RAF levy
•Sundry fuel levies
•Tyre levy
•Toll fees
•Vehicle license and other permit fees
•Indirect corporate tax (income derived from motorists) paid by car dealerships,vehicle insurance providers ,tyre insurance providers, innumerable automative and transport service company outlets(Midas/Tiger wheel n tyre/ etc…each charging motorists more vat on products/services sold) …
•Gautrain parking fees (vast majority paid by motorists)
•Gautrain trips (vast majority paid by motorists)
•Traffic fines (in tunes of billions every year)
•Already paid e-tolls
•Parking (disc) fees (mall/work/etc)

Only under taxes does the word ‘dead’ have a degree or two of comparison. Dead, more dead, most dead!
Even if i used a stallion to commute to work, i m very sure i d be charged fodder tax, water tax, horseshoe levy, saddle tax.
Pitiful!

You forgot about the carbon tax. As with all things in SA, the ANC regime takes away the ability of people to take care of their needs and offers nothing in return or very little. The excessive taxes on vehicles, in the absence of a reasonable public transport alternative is a disgrace.

So of this will reduce carbon emissions, which it will why aren’t some carbon funds assisting with the project?

One cannot fault their warped communist logic ne !!!

Guys all the money government has wasted? And now they want more of our money to squander, honestly the reason why orginal guatrain was successful was because there was minimal government interference, history and even the present has shown that the less government is involved the better I.e eskom & SAA. Now onto the money they want that they’ll probably mismanage, by now the original guatrain should’ve given a great ROR that they could have used to fund a percentage of this new deal along with other government investments but that’s not the case because our government has squandered majority of the money and that’s why the coffers are empty. This is why democracy doesn’t work in africa especially, it allows our government to run away from its responsibilities, seek assistance from private sector in order to do anything and then ask for international loans in order to bail itself out of the messes it creates, all at what cost in the end? The peoples!

This is Expropriation Without Compensation EWC.

The Americans call it ECW (Extreme Championship Wrestling), there are no rules other than Winning at all costs even if that results in the winner being crowned champion is his own bloodied disfigured body.
The Crowd Goes wild with every spectacular airial manoeuvre and drop of blood which is spilt.

With both wrestlers beaten to a pulp, they lay lifeless sometimes for weeks on end until they can battle again.

The same is true for the tax payers and socialist anc. L

At the end the day victory is short lived and only regression is achieved.

The following line is telling, “He said there was a “close to 100% recovery” of the operating costs of the Gautrain from the money people pay to use it although “Covid-19 messed that up”.” That makes it sound like GMA feels entitled to a hand-out instead of managing its own finances. Covid-19 was unprecedented, but GMA has been around long enough to sort out its financing.

Gautrain = Worldclass. Thinking around how to Manage and Fund it = 4th world. Maybe send a ‘study group’ on yet another multimonth ‘vacation’ to study more successful models abroad at the taxpayers’ expense?

Another plan is to wait until all the current (other) rail infrastructure has been looted clean before rebuilding that as well. Throw in another SAA bailout which is very much on the cards. Then all the corruption around procurement can happen at the same time.

The upside-down pyramid taxpayer funding can only last so long.

How about running the Gautrain as a business unit. In that way, you will streamline Income vs Expenses and balance your Assets vs your Liabilities.

You will be able to increase your turnover by allowing more feet on to the trains, by increasing the radius from particular Gautrain stations, from the current 5Km to say 7.5 or even 10 Km.

Then you ensure that bus arrivals and train departures and vice versa are synchronised.

The increase in turnover, will increase nett profit. Look at ways to save expenses, even if it means that management’s salaries needed to be adjusted downwards, which will also increase nett profits. This will make you less dependent on Government and make passengers as well as potential passengers happier and more likely to use the service.

Read this book for a far cheaper alternative to Gautrain: How Cycling Can Save The World by Peter Walker. You’ll kill at least four birds with one stone.

One has to assume that Peter Walker does not live in South Africa. Here cyclists are attacked and robbed, if not murdered, on a daily basis. Not to mention struck by cars and taxis. Wrong country, wrong solution.

…it’s plausible, especially those bicycles which works with battery/electric assist.

(I suppose one has to avoid the water puddles on an e-bike…like they say in the UK. But in Mzansi we refer to potholes…it’s like a puddle, but has 3rd world element to it in terms of depth)

@Michael you crack me up hahaha. It’s like a puddle but with more depth.

Interview with a Russian 1950s
Q: Rabinovich, what is a Fortune?
A: A fortune is to live in our Socialist Motherland.
Q: and what is Misfortune?
A: A misfortune is to have such a Fortune.

I’d like to invest in the gautrain buses that travel around all day 100% empty.

Just like Rea Vea ones that are also 100% empty but which hardly run at all, and screw up the roads with permanently half built stations.

And still on the subject of quasi govt transport investment, any new Gautrain expansion has to compete with the wonderful opportunity to get into the new SAA.

The next big opportunity will be to privatise e-tolls, or try to run prassa trains on zero tracks and stolen cables.

Seems partnering with govt on infrastructure is the fastest way in town to blow your wad.

This gautrain rubbish is another mismanaged vehicle of unbridled theft. Instead of serving us, the people of SA, it has turned into a moneymaking machine for the privileged golden circle of cANCer friends and family. Like this country, there were some great opportunities of making this work but no, it is cheaper to import oil, emit carbon monoxide and psychological damage people by exposing them to traffic (and a useless president and his incompetent cabinet) than to use this traveling heap of corrupted scrap metal. That will be the Dachs if you think for one moment that I support your childish logic that is caught up in the vortex of your own forgotten past.

Hey William Dachs, I smell tenders… yummy. No wonder Gautrain is so expensive. Is there a “bribe tax” that you’ve considered?

Gautrain is the Concord of suburban rail

Why did Gautrain need the extra cost (design, construction and operating) associated with a 160km/h rail project??

Is 100km/h not good or fancy enough? Speed only matters significantly over distance. On short little 10km runs it is a total waste after you figure in accelerate and decelerate.

How much longer would a ride from Sandton to ORT take (measured ticket swipe to ticket swipe) at 100km/h max? 30 seconds, a minute?

How much more does a system like Gautrain cost than a plain old 100km/h rail system?

No mention of the fact that Gautrain was tax subsidised by R1.6 billion in 17/18 financial year.

You can always trust an ANC cadre to find a way to justify theft.

MORE UN-ELECTED PEOPLE MAKING DECISIONS ABOUT TAKING MORE, MORE & MORE OF YOUR MONEY????????????????????????????????? When did they get this power????

Gautrain, and the French Metro network on which it is based, are awesome. If the majority of Gauteng could use it to get to work instead of paying minibus taxi drivers a fortune it would be great for all. Cheap safe transport is what is required to get Gauteng working.

To W Dachs & company: if you can not fund your own projects via income generated from your previous projects, do not start to sponge on the taxpayer to realize your own ideas – is the risk too big for financial institutions to fund your project??? – if the gautrain does not generate enough income to fund it or at least can serve as a guarantee for the next phase, it simply means it will not be a long term viable project in monetary terms – does not matter how advanced and good your current trains operate and look like.

So motorists do not pay their fair share of taxes….

15% VAT on the original purchase price of the vehicle
Annual licensing fees to keep the car on the road
Taxes built into the fuel levy every time you put in fuel
Toll fees
Parking fees in most towns and cities
and of course the extended contribution of creating jobs in the automotive industry including both new vehicles as well as automotive parts – each job in turn being taxed and paid over to the government coffers

And how do you think people will get to their places of work where the Gautrain does not operate, but you expect them to contribute to yet another stealth tax irrespective?

Methinks you have not thought your position through Dachs.

The Gautrain is not working at present and the more something does not work the more screaming there is from the staff who are tax-funded. PRASA is needed as it transports poor folk but there is nothing happening there either. Gautrain does about 1,5 million passenger journeys a month or assuming that they are weekday workers mainly then less than 40 000 people. Yes sounds like a plan tax the million in cars and taxis more and pay for the few.

What causes delays in projects is not having the money to implement and that has become worse with ANC corruption, Covid-19 loans and the running out of fiscal room for more National and Provincial debt.

Also, the other provinces also need their ‘Gautrains’ or versions of, Cape Town in particular, where the traffic commuter times have become worse than in Los Angeles.

I tried reading this article but realised I am reading nonsense and stopped.

They are trying to justify something some of us have nothing to do with. They are trying to justify theft. Cash-grab.

I am fine with paying taxes and levies towards the upkeep of roads because I use the road, not their trains.

Who will build this? The engineering capacity to do this has long since been dismantled in ZA. Will it be politically acceptable for Chinese or European firms and who would want to take on ANC/ZA risk?
The window for technically difficult projects like this has probably closed in South Africa.

What happened to governments lovely etoll motto ” User Pays” ?

What an idiot, carbon intensive modes of transport ahhhhh “Eskom” oh that’s right the black stuff they burn to power the tax funded Gautrain are angel wings and has no carbon foot print. That’s why its so expensive not the fact the the entire place is riddled by a legacy of corruption stealing the tax payers money.

When Government funds a project you dimwit it is taxpayers money or what’s left of it after the select few in Government have helped themselves and their family’s to it for self enrichment to the detriment of millions.

R631 Million Free State housing Project never Built, R1 Billion spending Spree F.State Government (Recover R60 Million what a F-Joke) Todays news and all you have to do is read the news and it corruption, corruption. Farm Murder, Corruption corruption.

You want money for expansion in SA get rid of the corrupt, but seeing as “special investigation units”, “NPA” etc all get get their legs taken out every time they get close these parasites are still walking around free.

Under what rock did they find this Dachs fellow?
Who on earth is he to say motorists dont pay enough tax so that this mismanaged unprofitable train service must be subsidized?

Pathetic specimen!

Liewe d-nner, nou’t ek alles gehoor.

SOLUTION
(1) Put wheels with tyres on Gautrain and travel by road
(2) Now Transport the motorists – if you hitch another 5 to 10 coaches you’ll be able to load much more “load” (hint – double dekker busses will do super)
(3) While travelling the conductor can collect R20 tax per passenger. Those who complain must cough up R50. On second thoughts, make it R100, that will include the conductor’s fee. Stop at the e-toll “gates”. Quickly pay the transport tax to the toll gate keeper (only a 5 minutes delay) and proceed with the trip. (4) Remember to build a steering wheel into the train, because the roads are not straight!
Problem solved!

PS anybody out there who can do a reliable job of fitting a steering wheel to a train – start preparing your tender documents

PPS – increase that R100 to R200. That way I’ll then be able to get a discount on my tax I pay.

Whatever happened to the USER PAY PRINCIPLE that the Government and the cANCer bleated so much and so loud about when trying to justify Etolls and how they should be funded? It seems that what is good for the goose is not good for the gander?

Funny title and article.

Maybe stop corruption first.
Then get people working … increasing employment so that they can pay tax.

babys steps.

LOL.

#VoetsekANC!!!!!!!!!!!!!!!!!!!!!!!!!!!

Better get cracking because a lot of those motorists are EMIGRATING boet.

It is the state’s job to provide transport infrastructure. Whether road, rail, bike, footpaths etc.

Certainly driver-only cars are the most inefficient, congesting and polluting form of commuting while mass transport the most efficient. Gautrain was badly conceived — a vanity project and one of the few achievements of the Corruptheid post 1994 era — but for better or worse we have it in its present form as a “sunk cost”. For those able to use it, there is no gainsaying its speed and comfort.

Whether Gautrain should be extended, probably cheaper than the original project, or frozen and other modes encouraged (including subsidising taxis) is a matter of simple economics, including taking into account the “externalities” like congestion, pollution saving foreign exchange (local electricity vs imported oil), ability of Eskom to power Gautrain, jobs, property prices, and so on.

Who else is gonna pay? Its easy for the government- just raise the petrol price,vat, income tax etc etc

Next will be a rise in your municipality bill.ons ga af-tjop.

The only way to deal with idiocy like this is to tackle it like it is; idiotic.

One cannot make a statement of fact without research. Mr. William Dachs, where are the facts and figures that go to prove your assertion / opinion? Until such time as you present them, we take your your opinion as garbage.

And Gautrain, like SAA, is not needed. It is one of the most unequal infrastructure projects in South Africa ever. It only benefits the wealthy who travel on that route.

Whoever dreamed it up should be executed.

Mr William Dachs please resign before you do anymore damage.

At 2pm today in Centurion , on the PTA JHB route there were no more than 10 passengers ??

The reported statements from this Mr Dachs brought a popular quote to mind. ‘It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt’ – Mark Twain.

Wet dream of a commie apparatchik….

By the bye! Last I checked, ‘almost’ 100% recovery of operating costs made through fare sales by those using the Gautrain. Is still considered a loss! And, as any business within the pvt sector would know to well, that’s a failure which only a public institution can withstand.

End of comments.

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