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Gauteng Rapid Rail Integrated Network – GRRIN Tshepo Kgobe 10 July 2018

OUR JOURNEY TO A BETTER GAUTENG. Gauteng Rapid Rail Integrated Network – GRRIN Tshepo Kgobe 10 July 2018. Contents. TMR & PPP Framework Lessons Learnt The challenge & Planning Modelling a Future Network The Routes and Phasing Socio-Economic Development Conclusions and Next steps.

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Gauteng Rapid Rail Integrated Network – GRRIN Tshepo Kgobe 10 July 2018

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  1. OUR JOURNEY TO A BETTER GAUTENG Gauteng Rapid Rail Integrated Network – GRRIN Tshepo Kgobe 10 July 2018

  2. Contents • TMR & PPP Framework • Lessons Learnt • The challenge & Planning • Modelling a Future Network • The Routes and Phasing • Socio-Economic Development • Conclusions and Next steps

  3. TMR & PPP Framework

  4. A new modern Gauteng is in the making • Gauteng Premier’s first State of the Province Address • (27 June 2014 in Thokoza, Ekurhuleni) • Radically modernise the way Gauteng residents live and work • Ten pillars of radical transformation • Gauteng has a 25 year Integrated Transport Master Plan (GITMP) with Rail as its Public Transport backbone • Public transport as an economic growth stimulant • The GRRIN project is a key part of the 8th pillar of the premier’s vision for the modernisation of public transport and other infrastructure thereby helping the economy of the province and the country

  5. Gauteng’s Future Transport planning • Car/ vehicle growth and Road Congestion • Travel speeds without GRRIN • Travel time savings if GRRIN implemented • Population Growth and land use • Connectivity Challenges in Jhb North Western Sector

  6. DreamingOfa World-classRailSystemToConnectOurPeople throughout Gauteng • Integrated public transport • At its core a rapid rail link system • Increased infrastructure investment • Spatial Development Initiatives to stimulate economic growth and job creation

  7. Lessons learnt

  8. Gautrain Key Success Factors • Political leadership and will • Build on Gautrain lessons learned – what worked and what didn’t • Stick with PPP but adapt the model • Partner with the best • Lead the economic development and public transport integration as a Province • Follow PFMA • Continue economic and socio economic development

  9. Gautrain Lessons learnt • Greenfields project risk vs Brownfields extension • Theoretical vs actual data • PPP Structure could do with some amendment • GMA has excellent data on ridership, operations, Capex and Opex from Gautrain 1 • Lower IRR’s should be applicable in future • The Demand Modelling should be improved. • Socio economic impacts are significant • Public transport as a catalyst for economic change

  10. Important drivers Project to be managed in such a manner that it is institutionally and commercially structured to attract interest, support and private sector participation

  11. PPP Requirements • Feasibility • Value for money • Public Sector Comparator (PSC)(What will it cost if Government does the work through normal procurement process; and including completion and integration risk and cost) • Affordability • Total cost of project, expressed in Net Present Value (NPV) • Yearly cost to the province (contingent liability) • Maintain a prescribed ratio in social vs.. rest split in budget • Risk transfer • Identify, cost and allocate risks to the role players best equipped to mitigate and manage them

  12. The PPP Feasibility study process

  13. Feasibility Study Governance

  14. The Challenge & Planning

  15. Transport Planning Major Interventions* or “do nothing”* Population Growth – (Number of workers) Predicted – Future State External Factors** Economic Growth – (type, location, labour requirements) Current – Status Quo 2037 Land-use Patterns – (Where will the People live) 2016 Enablers*** or “do nothing”

  16. 1. Car growth and Congestion in Gauteng • 3,9 million 2014 to 8,6 million 2037 • Cars/1000 population Gauteng • 300/ 1000 (2014) to 450/1000 (2037) • Significant car growth • Congested road network

  17. 2. Travel speeds without GRRIN 2025 • Existing road network is operating close to capacity • Current average network speed 41 km/h (peak and contra-peak directions) • Will reduce to 26 km/h in 2025 with an key road journey time 1- 3 hours.

  18. 2. Travel speeds without GRRIN 2037 • Peak Hour Road Traffic • Assume • 1 000 km additional freeway capacity • 1 500 km additional dual carriageway capacity • All road improvements currently planned are built • Average key road network speed reduces to 23 km/h (peak and contra-peak directions) spread over 3 hours • 10km/h in peak hour if no peak spreading

  19. 4. Population Growth • Gauteng’s population is estimated to increase by 48% by 2037 Source: GRRIN Transport demand model : Land use projections from Metro land use data

  20. Population(Potential Users 2025)

  21. Jobs(all 2025)

  22. Job Opportunities: 2037

  23. “The Cost of Doing Nothing”

  24. “The Cost of Doing Nothing” Source GITMP 25

  25. Conclusions :”The Cost of Doing Nothing” • Analysis of the transport situation in 25-years’ time, shows that the consequences of “doing nothing” will be severe, i.e. if current trends continue • Vehicle population predicted to grow from 3.9 mil. to 8.6mil. • Peak hour person trips to grow from 2.0mil. to 3.2mil. • Average peak hour road network speed will reduce from 41km/h to 26km/h in 2025 • Average peak hour road network speed will reduce from 41km/h to 23km/h in 2037 over a spread 3 hour peak • Congestion, with the transport network, the economy and the natural environment choking • Major interventions are required to avoid this scenario

  26. Modelling a Future Network

  27. Existing Rail in Gauteng & un-serviced areas Lanseria & Jhb NW Tshwane East Un-serviced rail areas East Rand Mall / Midfield Terminal

  28. Future Rail in Gauteng • Metrorail/PRASA • & Gautrain • Rail as the backbone of public transport • Integrated to BRT and Taxi

  29. Rapid Rail GRRIN interaction with other modes Travel Distance (km) 10 20 30 40 50 60 70 80 90 150 900 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 20 000 30 000 40 000 Bus Long Distance Monorail Minibus Commuter Metro Rail BRT Passenger per hour Tram HIGH SPEED/ INTERCITY/ LONG DISTANCE RAIL Rapid Rail Commuter Metro Rail

  30. DATA INPUT DATA INPUT MODEL PROCESS GRRIN Transport Demand Model GITMP25 Model Census 2011 Landuse (2014) Study Area & Zones GITMP25, RISFSA, Capacity, Speeds PT Routes, Timetables, Capacity, Fares Road & PT Network Routes, Fares, Timetables, Patronage (Taxi, Bus, BRT, Rail, Gautrain) Census 2011 UPDATED TO 2014 HTS 2013 Trip Generation HTS 2013 PT Routes Road Network Generalised Costs Trip Distribution Stated Preference Surveys Generalised Costs ACSA Data Mode Choice Road Network Speeds, Capacity, Costs PT Routes, Speeds, Capacity, Costs Assignment HTS 2013 Travel Time Surveys Traffic Counts PT Counts Calibration & Validation

  31. GRRIN Transport Demand Model • Model calibrated to international standards (UK) • Model meets criteria for: • Traffic Flows; • Traffic Screenlines & Cordons • Journey Times; • Trip Patterns; • Passenger Flows • Signed off by international reviewer • High level of confidence in Car Traffic & Gautrain • Other Public Transport adjusted and calibrated to counts and information available • Road network was expanded based on Gauteng’s Strategic Road Network plans for 2025 and 2037 • Gautrain bus headway to match train headways • Park & Ride facilities at all new stations

  32. Feasibility Progression Technical Summary Economic International Review  Demand GRRIN Transport Demand model Financial Model • Demand Model • Model Revenue • Phasing • Fare Box SED Phasing Technical • Project Structure • Funding Structure • Risk Phasing Routes, Stations, Capex, Opex & Costs Feasibility Study

  33. The Routes and Phase

  34. GRRIN full network Capex • Attached cost categories used • Over R 111 billion (Capex only) • Subject to funds availability • Phased over 25 years

  35. GRRIN Extensions PhasingPhase 1 MAMELODI LEGEND HAZELDEAN HATFIELD North – South Commuter TSHWANE EAST PRETORIA East – West Commuter IRENE Airport CENTURION Phase 1 SAMRAND Metrorail OLIEVENHOUTSBOSCH MIDRAND SUNNINGHILL RHODESFIELD LANSERIA O.R. TAMBO FOURWAYS MODDERFONTEIN COSMO SANDTON MARLBORO LITTLE FALLS RANDBURG EAST RAND MALL SANDTON 2 ROSEBANK ROODEPOORT PARK BOKSBURG JABULANI

  36. Phase 2: Soweto link North – South Commuter MAMELODI East – West Commuter HAZELDEAN HATFIELD TSHWANE EAST PRETORIA Airport Service IRENE Metrorail integration CENTURION SAMRAND Phase OLIEVENHOUTSBOSCH MIDRAND RHODESFIELD SUNNINGHILL LANSERIA O.R. TAMBO FOURWAYS MODDERFONTEIN COSMO CRADLE MARLBORO SANDTON MIDFIELD TERMINAL RANDBURG LITTLE FALLS EAST RAND MALL SANDTON 2 ROSEBANK ROODEPOORT JABULANI PARK BOKSBURG

  37. GRRIN Extensions: All Phases MAMELODI LEGEND HAZELDEAN HATFIELD North – South Commuter TSHWANE EAST PRETORIA East – West Commuter IRENE Airport CENTURION Phase 3- 5 SAMRAND Metrorail OLIEVENHOUTSBOSCH MIDRAND RHODESFIELD SUNNINGHILL LANSERIA O.R. TAMBO FOURWAYS MODDERFONTEIN COSMO CRADLE MARLBORO SANDTON MIDFIELD TERMINAL LITTLE FALLS RANDBURG EAST RAND MALL SANDTON 2 ROSEBANK ROODEPOORT BOKSBURG PARK JABULANI

  38. Why Phase 1? • Highest transport model demand • Unserved by any rapid public transport (BRT) • Un-serviced by rail public transport mode • Congestion (see current google plot*) • Key connectivity challenges • Key economic nodes are located within the N1/N3/N12 ring road • Links with CoJ development planning • Many high density residential nodes are located outside of the N1/N3/N12 ring road • Limited freeway and road crossings in NW quadrant (12) • *Source: Google Maps (AM Peak Hour Traffic) Freeway crossings Other road crossings

  39. Socio-Economic Impact

  40. Socio Economic Benefit potential of GRRIN National Revenue: For every R1 spent on operating the Gautrain, an additional 24 cents is added to the national government revenue Job creation: Total Jobs: Estimated over 200 000 jobs will be created. For every R1 million of operational expenditure, 4 jobs will be sustained per year Maintenance & Operations: For every R1 spent on operating the Gautrain, the provincialeconomy gains 96 cents Rolling Stock Industrialization through maintenance in SA

  41. Socio-economic Impacts Impacts from the Extensions not often fully appreciated • Decrease in road expansion and maintenance programs • Even if the introduction of the GRRIN has only the effect of postponing the roads programme, it means extra money in the pockets of tax payers. • Concentrated development around railway stations • The establishment of a railway station has the effect of drawing businesses to establish around the station. This agglomeration leads to additional productivity, which ultimately leads to additional growth and development. • Reduced risk of unforeseen delays on roads • Some road users will not use the train as a day-to-day form of commute, however it gives them an alternative opportunity to ensure that they reach a destination timeously. • Increased perception of safety as opposed to road transport • Especially for women and children, the train ensures a safer transport environment when needed.

  42. GRRINExpectedBenefitstoKeyStakeholders Gauteng Province • Less traffic congestion • Carbon emission saving • Reduced accidents/fatalities • Job creation Commuters • Safe, reliable mode of public transport • Time saving • Carbon emission saving • Dedicated right of way

  43. GRRINExpectedBenefitstoKeyStakeholders Local authorities (Surrounding GRRIN Station Nodes) • Less traffic congestion • Increased rates and taxes revenue, due to real increases in property prices • Increase in Local authorities “brand value” due to a the presence of a dependable public transport solution • Carbon emission saving • Transit Orientated Development (TOD), and economic growth Property Owners and Developers • Increase in property demand around GRRIN nodes • Increased value, densification and occupancy rates • Resultant capital and income gains from an increase in property demand Business Owners • Increased revenue from higher densities of customers close to GRRIN station nodes

  44. Commercial Structuring & Funding

  45. Gautrain I Contract Basis • Gautrain I - Single PPP contract • Train operations & maintenance • Rail infrastructure & maintenance • Rolling stock & maintenance. • Patronage guarantee to the Bombela Consortium based on a pre-agreed equity IRR return. • Patronage Guarantee based on the Greenfield nature of the project Government Funding: Patronage Guarantee Gautrain Management Agency Patronage guarantee Fully inclusive rail service Servicing of debt Equity providers Debt ≈ 10% Equity ≈ 2% Bombela Equity returns Debt providers Train Operations Infrastructure Rolling Stock Government Funding – Infrastructure ≈ 88%

  46. Gautrain Funding Structure • The three spheres of Government ≈ 88% • National DoRA: 48.5% • Provincial MTEF: 21.1% • Provincial Borrowings: 18.6% • Remainder of CAPEX/Infrastructure funded through equity and debt ≈ 12% • Long-term Debt: 10% • Equity: 2% • Shortfall of Patronage Guarantee covered by Provincial MTEF funding

  47. GRRIN Extensions Basis & Structure

  48. Funding Structure – Default Option • The outcome of the GRRIN PPP feasibility study derived an anticipated infrastructure funding split: • Government Capital contribution ≈ 67% • National DoRA: 40% • Provincial MTEF Funding: 27% • Private Sector funding of ≈ 33% • Debt • Mezzanine Funding • Pure Equity • This option does not consider additional ‘alternative’ funding sources that would further reduce the required government capital contribution • Proportion of the government capital contribution possibly funded via ‘alternative’ sources of revenue

  49. Gautrain /GRRIN comparison • The accompanying chart quantifies the change from Gautrain to GRRIN funding sources on the project funding/financing split

  50. Alternative Funding Analysis • Additional sources of Alternative funding were identified per the DBSA report (“Gauteng Rapid Rail Network Extension (GRRNE) Funding Options Analysis”) • The potential categories of “Alternative” revenue/funding are as follows: • Tax Increment Financing (TIR) (New & existing stations) • Special Rating Areas (SRA) (New & existing stations) • Vehicle License Fee • Airport Tax • Sales Tax - VAT • Property Asset and Management Agency (Property Development) • Station Auctioning

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