Abstract:
This Case study report focuses on the Gautrain Project, a developmental rapid rail network covering the three metropolitan cities of Johannesburg, Ekurhuleni and Tshwane in Gauteng Province, South Africa. The project was one of the 11 strategic projects identified by the provincial government to promote the province’s economic competitive advantage. These were referred to as the Blue IQ projects and managed under the Department of Economic Affairs and Finance and the Blue IQ Agency. The aim of the Gautrain Project was to provide a world class rapid rail system, that is integrated into the wider provincial transport network.
To implement the Gautrain Project, the province started engaging in international interactions with other sub-state entities including the State of Bavaria in Germany and the Ile-de-France Region in France. This type of engagement is referred to as para-diplomacy in the field of international relations. This resulted in the creation of specific structures to manage provincial international engagements, including the provincial International Relations Forum and the Directorate: Stakeholder Management.
Bringing the Gautrain Project to fruition, the province needed R25 billion. Of the R25 billion needed for the project, R21.5 billion would come from the province and R3.5 billion from the private sector. To raise the R21.5 billion, the province had to enter into negotiations with the National Treasury. This resulted in the National Treasury granting R11.75 billion to the Gautrain project. The province had to raise an extra R9.75 billion. This it did through an inter-departmental loan of R4.2 billion and R9.8 million from the ABSA. The remaining amount is funded through the provincial Medium Term Expenditure Framework (MTEF) allocation.
The province then entered into a special public-private-partnership (PPP) arrangement for the Gautrain project. It signed a concession agreement with the Bombela Consortium (a group of private companies) to construct and run the Gautrain for twenty years. It also created a Gautrain Management Agency to oversee the concession agreement. The construction of the rail link started in 2007 and the rail became operational in 2010. The successful operation of the Gautrain has led to proposals to extend the rail link to other areas.
The implementation of the Gautrain project has provided a learning curve for the province not only in terms of international engagement with other non-state actors, but also in terms of raising international investments and managing negotiations with national departments (in this case the National Treasury) and ensuring public support for its economic projects.
