The “financial trainwreck” that is the Gautrain….

The Automobile Association (AA) has slammed the Gauteng provincial government for wanting to spend R120 billion on extending the Gautrain service. In this interview with BizNews, the AA’s Layton Beard points out that billions of Rands of Gauteng taxpayer’s money has already been paid to the operating company Bombela since 2012 through the Patronage Guarantee “due to the actual revenue and ridership being significantly below the minimum required total revenue projections”. The expansion plan was announced by Premier Panyaza Lesufi despite the MEC for Finance and Economic Development, Lebogang Maile’s recent warning that the province is on the brink of potential bankruptcy because of its commitments, among other things, to e-toll debt.

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Extended transcript of the interview   ___STEADY_PAYWALL___

Chris Steyn (00:02.562)

There is outrage that the financially embattled Gauteng province government plans to invest 120 billion on expanding the Gautrain service. One of those opposing the move is the Automobile Association of South Africa, and we speak to Layton Beard of the AA. Welcome, Layton.

Layton (00:21.774)

Morning, Chris, good to be with you. Thank you.

Chris Steyn (00:25.964)

What are your reasons for objecting to this extension?

Layton (00:30.766)

We have quite a number of objections. I think the first objection we have is that in our view, the system is geared very much to an elite demographic. And what we mean by that is that it’s geared towards people who are already mobile. People who use the train invariably would drive their vehicles to a train station, park their vehicles there and then use the car train service, which is why you find that some of the biggest parking lots in the province actually belong to the car train. And you see that at the infrastructure. I mean, the car train station in Centurion is a good example. The car train station in Pretoria is another example. And they actually have areas that are cordoned off in some of these parking places for vehicles that are at high risk of being stolen. So you will find in some of these parking areas, these kind of cordoned-off areas for very high value vehicles, which means that the people who use this already have expensive mobility. They have big SUVs, they have expensive vehicles. And so they are able to get onto the system and the system isn’t cheap. It’s expensive to ride the car train. And at the same time, you find that people wake up at four o’clock in the morning to get to a job at eight o’clock because of their lack of mobility. 

So right in the beginning, when the Gautrain was being discussed and, you know, when the proposals were on the table, the AA was amongst those who objected already, saying why are we investing so heavily into the system when we have this huge need for mobility amongst the vast majority of citizens in the country? 

Now, I want to dispel something, Chris, because since we began criticising the Gautrain and labeling it a white elephant and an elitist, some people have actually taken issue and said, well…

Layton (02:50.75)

obviously, the AA wants more cars on the road to keep its own business going. Well, that’s not the case at all. Whether the Gautrain operates or not, or whether you use the Gautrain or not, people still have cars. And our membership is not affected by that. So that’s not a reason for us to to criticize the Gautrain and to be against the expansion processes of the Gautrain. It’s primarily based on the fact that it’s geared to one specific segment of our population.

Now, I’ll give you a breakdown of the figure. Since 2012, the Gautrain projected that they would have 47 and a half million rides annually on their system. And that translates to around 130,000 people using that service on a daily basis. And at the peak of its usage, the Gautrain only had 42,000 rides a day. Projected at 130,000 and actual of 42,000. Let’s call it 43,000. So that’s less than a third of people using the, or just about a third of people using the service that was predicted to use the service. And that is a huge issue. 

And at the same time, you have millions of people around the province who simply don’t have any mobility option at all. They struggle to get a taxi for whatever reason. Maybe they can’t afford it. They have to walk to wherever they need to be. There isn’t proper bus services available in the area that they need. And for us, improving the bus infrastructure and increasing the number of buses, specifically to areas that require it the most, and making sure, and this is a very critical point, that that public transport is reliable, safe, sustainable and affordable is for us the key to investing in public transport in this province. 

One last point or two more points. When the Gautrain calls itself a mass transit system, we have to speak up against that because it clearly isn’t a mass transit system. It’s carrying at its peak 42,000 riders a day.

Layton (05:14.338)

That’s not mass transit. That’s catering for a very specific group of people. And I think the added problem with all of this is that in its current form, in its current shape, written into the contracts of the train concession agreements is that if the train does not achieve those projected numbers that I’ve just spoken about.

So if it doesn’t achieve 130,000 riders a day, it gets compensated by the Gautrain provincial government for whatever the shortfall is. So if it predicted 130,000 riders a day and it only gets 42,000 riders a day on a month basis or on an annual basis, that’s obviously calculated. So where it says we’re going to get, you know, 47 million people to use our system a year, and in this year we’ve only had 13 million people using our service, they get compensated for that shortfall. And that is known as the Patronage Guarantee. And that’s not our wording, that’s wording that is used in the Gautrain contracts. And if you read any of the Gautrain management agency annual reports dating back to 2012, they use that terminology and they say we need to increase our ridership to avoid having to pay this Patronage Guarantee.

And the Patronage Guarantee is incredibly onerous on the provincial government and therefore on Gauteng taxpayers. In the 2023-24 financial report, it’s indicated that the Gauteng Department of Roads and Transport from their budget paid the Gautrain Management Agency almost three billion rand for the Patronage Guarantee. In the previous 10 years, it was close to around 22 billion Rand. That gets taken from the Gauteng Department of Roads and Transport’s budget and gets given to the Gautrain Management Agency, who then pays the private concessionaire, Bombela, that money as an insurance for low ridership levels. And so obviously we take issue with that because it’s taking money from the Gauteng provincial government that in our view could be used, must be used, should be used for the improvement of other roads infrastructure in the province and given to a private company because they didn’t manage to get the number of writers that they projected they would get.

Chris Steyn (07:46.104)

Now Leighton, with what you know, of what we know of Gauteng province’s finances, can they even afford this? How could they?

Layton (07:57.454)

Look, I think that’s a very good question. And I think there’ll obviously be a measure of involvement from the private sector and there’ll be a measure of involvement from national treasury. We are not opposed to public-private partnerships in terms of providing public transport. It’s something that happens throughout the world. And again, it’s something that people have criticized the AA for saying you’re against PPPs and, you know, it’s something that happens throughout the world. And we agree that it is something that happens throughout the world. 

However, in other countries where there are PPPs, the public transport that’s offered is a lot cheaper than the Gautrain. It’s run on a more sustainable, affordable basis than what the Gautrain is run. And it’s there for every member of their society, for every member of their community. And every member of their community can access that service. And that’s not the case with the Gautrain train. And that’s exactly why we take issue with it. 

So yes, I think funding will be made available somehow and from what we’ve heard from the Premier and the people who are very supportive of the Gautrain, I think every effort will be made by them to actually secure this funding. We don’t know the details of that just yet but certainly I think that they would look to get that funding somehow.

Chris Steyn (09:15.736)

And where do they want to extend it to now?

Layton (09:19.138)

Well, when you look at the graphs that they’ve got, they pretty much want to extend it to other areas within Pretoria, places like Tshwane East, Hazeldene, Mamelodi. They want to take it past the East Rand Mall going into Boksburg. There’s places like Roodepoort and Little Falls that they want to take it to their Jabulani.

So there are many areas that they want to extend it to, Olievenhoudtsbosch, Sunning Hill, Fourways, that area around Lanseria that they want to take it to. So, I mean, if you look at the map of where they want to take it to, it certainly makes sense. And you get an idea that, yes, I mean, this could be, you know, it could certainly be beneficial to those people in those areas. 

But you’ve got to ask these questions. A, can we afford it as you’ve done? Is it something that we can spend 120 billion Rand on? Are we going to get that investment back somehow? Now, when you look at the projected figures for phase one and the shortfall in the ridership levels, are there any projections that could be credible in that environment? And in our view, no, there can’t be because they’ve already proven that the projections aren’t credible. And so you’ve got to question that side of things.

What is the cost of this going to be? And what is the network around these stations and around this rail network going to look like? Is it going to be accessible for people in those areas? For argument’s sake, if you live in Mamelodi and the train station is in ex position, how do you access that train station? Do you need to take a taxi to get there? Is there going to be a bus that is going to take you to that area? And how is that going to work? How is that secondary network going to assist you to get there? 

So I think there are a lot of questions, Chris, around exactly how this is all going to play out. On paper, I think everything looks fantastic, but it’s actually in the implementation where there are lots of problems that we identified. And we’ve noted these in our submission that we made in August 2021. Sadly, nothing came of that submission. We made it to the people who…

Layton (11:44.056)

were going to decide on the expansion. We never got called back. We never got interviewed around our position. And we feel it was a very thorough document that we put together expressing our view on exactly what the problems were around that Gautrain.

Chris Steyn (11:57.296)

Now I haven’t been on the Gautrain for a long time. What’s the difference between the price between a ticket on the train from Pretoria to Johannesburg and a taxi on the same route, do you know?

Layton (12:11.95)

Look, I mean, you know, from what we’ve heard, and I think it’s a very difficult question to answer because different taxi rides are going to give you different pricing, obviously, and, you know, depending on where you go to and, you know, where you get off. I mean, the Gautrain is pretty expensive. I think one of the shortest trips that we’ve identified is Pretoria to Hatfield, which is a 30 rand trip. And I think for the cost of 15 rand, you can do that in a taxi. So it’s pretty much half the price.

But that, you know, it could be different in different areas around the province. The bottom line, though, is that, you know, if you’re paying for a ticket on Gautrain as it stands at the moment, you’re being heavily subsidised through the Gautrain, through the Patronage Guarantee in any case, which indicates that it could probably be more expensive had that not been in place.

Chris Steyn (13:07.877)

So with your submissions having been ignored, there’s obviously no way that you can take this forward now. You can just watch from the station, literally.

Layton (13:17.346)

Yeah, I mean, we are advocating and part of what the AA does and part of what we have to do is advocacy work around various issues. Now, we are very active in campaigning for better road safety in South Africa. We are very active in campaigning for mobility solutions for the majority of people who don’t have them and ensuring that those mobility solutions are safe and affordable and sustainable.

We’re involved in a project, just as an example, in Mamelodi. We’re trying to improve the road infrastructure around 10 schools in that area so that the children who access those schools have a safer environment in which to walk and get to school and prevent crashes and injuries and deaths. And that’s part of what we do. 

And part of what we also do is advocate, because of that advocacy work, have to advocate against things that we believe don’t actually fulfill that role.

And in our view, the Gautrain is one of those. We think a better system would be heavy investment in a better bus network in the province that actually services the needs of people that have no mobility solutions whatsoever, as opposed to providing more solutions to people who already have vehicles, as I explained earlier.

Chris Steyn (14:34.966)

Right. Now, what feedback have you had from your members on this issue or your stand on this issue?

Layton (14:41.326)

So there have been, and I want to preface this by saying that, before I get accused of having a bias in this, we have received many comments from people who say that we are narrow-minded, basically accusing us of having a parochial approach to public-private partnerships, not understanding the public-private partnerships, wanting to keep more cars on the road for our own benefit. Those are some of the comments we’ve received from our members. 

But we have received more comments from members who are supportive of our view and who agree that it’s wasteful expenditure, who don’t believe that the Gautrain is the right option. and who believe that this is money not well spent and it’s going to be wasteful.

Some people may argue that I’m fudging the numbers and that more people have criticised us than have supported us. I can categorically state, and I’m happy to present this evidence, that more people are supportive of our view than are critical of our view. 

On social media, it’s the same kind of trend. We have seen people who are critical and some people who are supportive of us. The emails and the comments that we’ve received directly to the

to the AA, the majority are supportive of us and they understand the position that we have. We’re not being anti for the sake of being anti and we’re not being anti just to keep ourselves relevant. We’re relevant without this. 

For us, the point is that we need to back for the consumer and we are not only on the side of people who lack mobility issues. I think this is a very key point, Chris.

Layton (16:39.042)

We’re not only there to say, you know what, millions of people don’t have solutions and that’s why we’re doing this. It’s also because it’s taxpayer money in Gauteng that is going towards paying for a system that simply doesn’t work for the majority. Now, you know, for us, it’s very key that if you’re going to spend money, it needs to be spent properly and in the right places. And this is an example of where it is not being done. And that’s why we’re speaking out against it.

Chris Steyn (17:07.042)

Thank you. That was Leyton Beard of the AA speaking to BizNews about the Gauteng province’s plans to invest 120 billion on expanding the Gautrain service. Thank you, Leyton and I am Chris Steyn

Layton (17:21.816)

Thanks Chris, good to be with you.

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