Gautrain's cash dries up

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Pretoria - The Bombela Consortium has probably overplayed its hand in its Gautrain negotiations.

Gauteng Premier Nomvula Mokonyane says the province will not pay the extra R1.3bn to have the first phase of the Gautrain ready before the World Cup soccer tournament next year. Contractually the section between the OR Tambo airport and Sandton is supposed to be finished by June 27, but the tournament begins on June 11.

Speaking on SABC2, Mokonyane said that the Gauteng government had not approached Treasury for the additional funds because the province was already asking Treasury for money for roads, housing and social development.

Deputy Minister of Transport Jeremy Cronin says national government supports the Gauteng decision. "It would be unwise to pay so much to gain a couple of weeks while government's coffers are under pressure."

According to information in his possession, Bombela would have been able to meet the earlier date within the current budget, but "had negotiated very aggressively".

"It's a pity that they [Bombela] will not use the World Cup soccer tournament to show off the project; money means more to them than such considerations."

The fact that an outside company - French construction group Bouygues - is one of the main shareholders in Bombela may have something to do with their attitude, declares Cronin.

Bouygues has a 17% stake in the Bombela Concession Company, which has to deliver and operate the rail system for 20 years.

South African construction group Murray & Roberts has a 25% stake. Both have a 45% interest in Bombela Civils Joint Venture, which is building the infrastructure for the R26bn project.

Jerome Govender, the chief executive of the Bombela Concession Company, says making the service available before the World Cup soccer tournament is a complex issue and money is not the only consideration. He confirmed that the current completion date for the first phase is no longer June 27, but October. Penalties generally apply if a contractor completes a project late.

Govender places the blame for the delay mainly on the Gauteng provincial government which, according to him, was late in handing over the construction sites to Bombela.

Sake24 reported earlier that Bouygues and Murray & Roberts had already indicated that profits from the Gautrain project were uncertain. There are claims outstanding which Sake24 understands relate largely to the late handover of the construction site.

Sake24's information is that, in a highly complex proposal, Bombela linked these claims to early completion of the first phase.

If the Gauteng government had accepted this proposal in order to have the train service ready before the tournament, it would have committed itself to meeting these demands, which would apparently have been very unfavourable for government.
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http://www.fin24.com/articles/default/display_article.aspx?ArticleId=1518-1786_2560574

Another wasted opportunity
 
The fact that an outside company - French construction group Bouygues - is one of the main shareholders in Bombela may have something to do with their attitude, declares Cronin.

Bouygues has a 17% stake in the Bombela Concession Company, which has to deliver and operate the rail system for 20 years.

South African construction group Murray & Roberts has a 25% stake. Both have a 45% interest in Bombela Civils Joint Venture, which is building the infrastructure for the R26bn project.
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only these dudes and some govermunt officials will see any money from this
 
I'm not really seeing the fail here. Is the article just not saying that the province will not pay the additional 1.3 billion rand to push the project completion date ahead to June 11?
 
wasted opportunity as in had they planned it better they could of recouped money during the wc2010 instead we must now cough up the extra funds ( tax payers) I bet you

plus it seems that govermunt allowed a foreign company to decide on how it will work,so bad negotiating on their part
 
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I'm actually quite surprised the extra ammo wasn't just approved considering...
  1. How much emphasis guavamunt has put on WC (to the detriment of far more crucial areas of concern in SA )
  2. Gauteng recently approved just over a billion for some motorsport nonsense in the province without batting an eyelid
  3. Gautrain original budget at approval (2005) = 7 billion; current cost estimate to completion 25-odd billion
 
Original budget will never be the end cost in my opinion, i am amazed as well they will not pump in the extra cash.

I mean FFS we waste so much cash just pump the extra billion odd into the project already :D.
 
Just on a side note and correct me if I'm wrong, I don't think the Gautrain was ever actually scheduled to be running in time for the WC? Most of the reports on the web only state that "it would be a bonus" if it was complete then.

It seems like the goverment was trying to push for the earlier date:

A source close to the project said the construction sector strike in July had put great pressure on individual contractors on Gautrain’s 53 sites. They are battling to keep to the original schedule, never mind accelerating the project for completion by March 27. The government requested the date so that the Gautrain would be ready by the tournament’s kickoff on June 11.
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http://www.businessday.co.za/articles/Content.aspx?id=80297

It is said that construction will finish in 2011. Won't ongoing construction be an inconvenience to the 2010 Soccer World Cup? Why weren't plans made to coincide the completion of Gautrain with the world cup?

The link between the airport and Sandton is scheduled to be completed and tested by 2010 - so it will actually convenience the transport of tourists in from the airport.

Gautrain was initiated in 1999 - long before the SWC. It is thus not a world cup project but a system that should service commuters and air passenges for then next 100 years or so.
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http://www.news24.com/Content/South...93eb24a180d3bc5e/07-04-2008-04-32/Gautrain_QA
 
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Arzy said:
Just on a side note and correct me if I'm wrong, I don't think the Gautrain was ever actually scheduled to be running in time for the WC? Most of the reports on the web only state that "it would be a bonus" if it was complete then.

It seems like the goverment was trying to push for the earlier date:


http://www.businessday.co.za/articles/Content.aspx?id=80297


http://www.news24.com/Content/South...93eb24a180d3bc5e/07-04-2008-04-32/Gautrain_QA
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The Sandton - OR Tambo section was hoped to be operational by the SWC.
 
sox63 said:
The Sandton - OR Tambo section was hoped to be operational by the SWC.
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Actually not, if you look at the original article that section was supposed to be done on the 27th of June, half way through the soccer world cup.

Contractually the section between the OR Tambo airport and Sandton is supposed to be finished by June 27, but the tournament begins on June 11.
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That is being delayed now, yes. Nobody from the Gautrain ever made a commitment that it would be running in time for the SWC, that was all our wonderful local goverment.
 
Another one

http://www.tradeinvestsa.co.za/news/740748.htm

The Gauteng government wants to speed up the construction of the Gautrain in order to ensure that the first phase of the project is completed in enough time before the start of the 2010 Soccer World Cup.

Currently the first phase is due to complete on June 8, 2010, the day before the start of the World Cup, but the provincial government wants this changed to May 27, as it says a one-day difference is too tight.
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And:

South Africa: Gautrain Agency Wants to Meet 2010 Deadline - THE Gautrain Management Agency, which oversees the building of the rapid rail project, said yesterday it sought to have the first phase ready a month before the original scheduled date so it would be in time for the Soccer World Cup next year. [AA Urbanisation]
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http://architectafrica.com/node/2413
 
Although it might be technically feasible to complete the first phase of the Gautrain in time for 2010WC, commercially the cost associated with variations and claims could be a lot. Even though the contracts cater for most of these, there are disputes and claims that could go into arbitration which further delays the project and increases the associated costs.
 
saw two trains running on different tracks today in midrand, so i don't see why they wont be ready?
 
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