South Africa

South Africa is a constitutional republic, with power split between the legislative, judiciary, and executive branches. The legislature is a bicameral parliament, comprised of Members of Parliament in the National Assembly (350-400 members) and National Council of Provinces (90 delegates). The president of South Africa is elected by the National Assembly and is typically the leader of the largest party. The cabinet has committees for different departments and ministries, headed by an executive. Cabinet members are appointed by the President and are typically National Assembly members. Since a democratic government was established in 1994, governance of transportation has been split between national, provincial, and local levels, with each having particular legislated responsibilities. The national Department of Transport is headed by a minister and deputy minister of transport. South Africa has a hybrid common law, drawing from a mixture of Roman-Dutch legal systems and English common law.

After the 1994 democratic restructuring, regional and intercity rail became a “national competence,” meaning it is generally planned, funded, and managed on the national level. The national government manages the Passenger Rail Agency of South Africa (PRASA), the national passenger rail system and a state-owned enterprise under the jurisdiction of the National Department of Transport. PRASA manages and operates a regional passenger network called Metrorail, which has systems in four metropolitan areas. The national government also manages the national freight rail network under Transnet. Both services operate on existing tracks, mostly built during British colonial times with the narrower Cape gauge, leading to lower maximum speeds and no compatibility with a standard gauge system like Gautrain.  

The national government has not significantly expanded or constructed new passenger rail infrastructure in the past several decades. Metrorail was not operating for nearly six months of 2020, due in part to the COVID-19 pandemic and associated lockdowns instituted by the government. During this period, the Metrorail system suffered due to lapsed security contracts combined with looting and vandalism as people stole rails, stripped out copper wire, and destroyed stations.  

In November 2019, the President’s Office created a new agency called the Investment and Infrastructure Office (IIO) to analyze the problems with project implementation in South Africa, and to bring together relevant stakeholders to identify best practices for infrastructure projects and develop a model for procurement, organization, and regulations. IIO will work with the National Treasury to ensure projects are adequately planned, managed, and financed, but it is unclear how much oversight IIO will have after a capital project is completed, and hence how much it can help troubled entities like PRASA.

Each of the nine provincial governments has a unicameral legislature that elects one of its members as the premier. The premier’s cabinet, made up of provincial legislators, is known as the Members of Executive Council (MEC). The MEC of Public Transport and Road Infrastructure in Gauteng (other provinces have similar transport departments) is tasked with improving inter-urban mobility and developing infrastructure. 

Gautrain is a unique project, as rail in South Africa had never before been built and run on the provincial level. Provincial leaders pitched the train system as an economic development initiative for the province, making it eligible for national formula funding for socio-economic development. Gauteng province developed the Gautrain as a P3 design-build-finance-operate-maintain project, funding it with provincial funding, federal formula funds, loans from the national government, and private sector equity and borrowing based on projected future passenger revenues. The Gautrain project was managed by the Gautrain Management Agency (GMA), a special purpose delivery vehicle (SPDV) created by the Gauteng provincial government. GMA does long-term strategic planning for Gautrain, manages the concessionaire contract, pays financial obligations to the concessionaire, and holds all assets. 

Cities and localities have a limited role in regional rail projects. The cities of Johannesburg and Pretoria did not contribute to funding or planning for Gautrain, but they were involved in granting permits and requesting scope additions to the project. Under the National Land Transport Act, municipalities are solely responsible for developing and implementing Integrated Transport Plans (ITPs) in their areas. ITPs cover all modes and facets of transport and are approved by the relevant municipal councils as part of their Integrated Development Plans.  

Several cities have been actively involved in implementing local bus rapid transit (BRT) networks. Several BRT projects were deployed in the early-to-mid 2010s, with systems opening in Johannesburg in 2009, Cape Town in 2010, Tshwane in 2014, and George in 2015. Initial planning and funding for these BRT systems came from the municipal level, with the national government covering most of the capital costs.  

Bombela Concession Company is the P3 consortium that designed, built, partially financed, operates, and maintains Gautrain in a contractually pre-determined condition. It will give operation authority back to the GMA upon completion of the concession period. Bombela is a private entity that signed a concession agreement with the Gauteng provincial government, and operates in coordination with GMA. In the original agreement, Bombela was comprised of 50 percent foreign shareholding through French construction firm Bouygues Travaux Publics (25 percent of the consortium) and Canadian rolling stock company Bombardier (25 percent), along with equity from the South African construction groups Murray & Roberts (25 percent) and Strategic Partners Group (25 percent). Bombela Concession Company signed a 19-and-a-half-year contract with GMA to provide services until 2026. After the contract ends, GMA will decide whether to take over the service itself or tender to another concessionaire. Interviewees remarked that Gauteng is likely to put the service to tender again and it is unlikely that other provinces will replicate the Gautrain because they do not have the available funding. As part of the original concession agreement, Bombela is now made up entirely of South African shareholders.

Transit projects in South Africa are typically planned by municipalities in their ITPs, which they publish every four or five years, with projects prioritized based on need. In terms of rail, planning for Metrorail projects is usually a cooperative process between PRASA and the relevant municipality. 

Gautrain is an anomaly in this aspect, as planning was done entirely on the provincial level, helped by strong public support from politicians and behind-the-scenes backing from project sponsors and proponents. Former Gauteng Premier Mbhazima Shilowa was such a proponent that the system was originally referred to as the “Shilowa Express.” Jack van der Merwe was also highly influential in the project, serving as the project manager (1997 to 2005) and long-time Gautrain CEO (2005 to 2020). Interviewees said the project relied on van der Merwe’s technical knowledge and training as a civil engineer, his ability to lead the planning and selling of the project, his structuring of the financial arrangement to attract P3 bidders, and his legal clarity and detailed contracting agreements. 

Property acquisition for building Gautrain tracks was contentious, particularly considering the apartheid-era history of the government forcefully taking housing and the negative impact the project had in lower-income neighborhoods. GMA, in accordance with the Gauteng Transport Infrastructure Act, hired three independent evaluators to assess the fair market value of all properties that needed to be acquired and offered owners the best of the three rates. Though most residents were willing to move for a fair price, some resisted and sued for greater compensation or to stop the project. Ultimately, they were unsuccessful, and the project moved forward.  

Preliminary public involvement is a statutory requirement when a project is added to a municipal ITP. Once a project reaches the environmental impact assessment (EIA) stage, the project sponsor will conduct an in-depth study that includes public involvement. An EIA must be completed by an independent practitioner unrelated to the planning authority and contractor. During the public participation process, the project sponsor is mandated to address every comment received. 

Gautrain had an extensive EIA process. First, GMA developed a website to explain and provide background on the project and included a section to ask questions and submit comments. In 2002, GMA held a series of public meetings, sending invitations to all interested and affected individuals registered in its online database. From these meetings, the agency issued a draft Issues Report, posting it online and in public places like libraries for a 30-day comment period, then updated the draft based on feedback. A second series of public meetings in summer 2002 focused on possible route alignments that had been proposed after public participation meetings. The Gauteng Department of Agriculture, Conservation, Environment and Land Affairs then issued a record of decision (ROD) and stakeholders had the option to appeal the ROD for 30 days before the EIA was finalized. Gautrain had a total of 147 environmental assessments investigations and meetings, and responded to both strong public interest and backlash from residents on the proposed route.

South Africa regulates the environmental process at both the provincial and national levels. Each has a separate environmental department and its own regulations. Projects must have an EIA, followed by a more detailed report. The final report gives the environmental authority’s ROD. The timeframe to get environmental permits is generally not long. According to interviewees, a transit project can take six months to a year to get the requisite permits, as projects are not environmentally controversial and mostly offer environmental benefits. 

Since Gautrain was a project within the bounds of the province, only the provincial environmental process — which has the same stringent requirements as the national process — was necessary. In addition, the political pressure to complete the project for the 2010 World Cup enabled faster environmental permitting for the Gautrain and other transportation projects, such as the Rea Vaya bus rapid transit line. 

Localities largely decide on regulations. Gautrain runs between three metro areas, and each one can have different safety standards to link up with the emergency services network. Permission to operate the Gautrain service was obtained from the Railway Safety Regulator, under the National Railway Safety Regulator Act 16 of 2002. This permission is reviewed every three years. 

The national government has typically directly funded Metrorail projects in South Africa. However, the only major capital project in the past two decades is the Gautrain. Gauteng chose to deliver Gautrain on the provincial level using a design-build-finance-operate-maintain P3 model because the province itself did not have the internal expertise to build and run the service. By contracting with the private sector, the consortium would have financial incentives for effective management and high-quality services.

A P3 must be registered with South Africa’s National Treasury and obtain three authorizations, including a feasibility study (which covers affordability, value for money, and risk transfer), contract documents that reflect the feasibility study, and a concession agreement, including a financial model of quarterly cash-flow projections for the project for the duration of the concession period.

The final capital cost for Gautrain was $12 billion (R25.5 billion). There are four reasons why the cost was higher than anticipated: cost increases were higher than the consumer price index forecast, a weakened rand compared to higher-valued foreign currency (which is a portion of the contract), various alignment changes, and claims from the contractor.

The $12 billion Gautrain project was funded by a mixture of federal formula funding, provincial general fund revenue, provincial borrowing, and private debt and equity. South Africa had a budget surplus at the time, so the government contributed financially to the P3 to reduce the private sector share. Bouygues and Bombardier, the two foreign companies within the consortium, funded a 50 percent share of Bombela’s investment. Bombela invested $1.7 billion (R3.5 billion) in capital costs, including $472 million (R1 billion) in equity, while the national government contributed $4.8 billion (R11 billion) and the Gauteng province contributed $2.9 billion (R6.1 billion). Another $2.3 billion (R4.9 billion) came from short-term loans from the national government to the province. 

GMA signed a patronage guarantee as part of the P3 agreement under which, if ridership projections went unmet, Gauteng would agree to pay a minimum revenue. The guaranteed amount Bombela would receive rose from $387 million in 2013 to $519 million in 2015 to almost $755 million for the 2017-18 financial year. For 2019-20, the patronage agreement was $931 million. Ridership projections were far higher than actual ridership, so the Gauteng province has paid more than expected in this guarantee.  

Initially, Gautrain was conceived prior to the World Cup announcement and proposed as an economic development project. After eight years of operations, a Gauteng provincial agency study concluded that Gautrain added 0.55 percent to annual GDP through job creation, construction of commercial property next to stations, and jobs within new commercial properties. For every 1 rand spent on Gautrain, South Africa got a 2.6 rand return on investment. 

It took 73 months to build the Gautrain project, though the O.R. Tambo Airport-to-Johannesburg segment was prioritized and completed in 45 months, in time for the World Cup. The entire network was originally planned to open in 2010, but delays increased the project timeline and the system opened in 2012.     

The Gautrain route has varied geography for which crews used a variety of construction methods. The line is 62 percent at grade, 19 percent tunneled, and 19 percent elevated. Most tunneling was in the central parts of Johannesburg and Pretoria, and the majority was done with the drill-and-blast method, which is quick and relatively inexpensive. However, builders used a tunnel-boring machine between Johannesburg and Rosebank, a 1.9-mile segment that took 14 months to complete while working 24 hours a day, seven days a week.

Crews also worked with difficult terrain made of dolomite rock in a 9.9-mile segment near Pretoria. Dolomitic ground has varying levels of density, causing large underground cavities that often lead to sinkholes. To secure the ground under Gautrain tracks, crews compacted soils, pumped in cement and grout, and constructed ground-level, reinforced concrete bridges larger than any potential sinkholes. Construction crews originally estimated they would inject 1.8 million cubic feet of grout into the ground, but ultimately injected roughly three times as much (5.3 million cubic feet) to mitigate the danger of the unstable soil. In addition, they built 6.2 miles of viaducts to elevate the track above the dolomitic ground.

Construction methods are approved in the EIA process. While there are no city-level “construction permits” per se, cities must sign off on the approval of construction plans. As part of construction authorization, cities often put conditions on building and request betterments, including higher-capacity bulk services like additional water mains near work sites, increased capacity of street intersections near train stations, and additional station elements. Betterment requests were anticipated and built into the initial Gautrain capital budget.  

South Africa used a P3 model to bring in expertise for construction, provide for long-term operations, and complete the funding package. Because Gauteng province had no previous experience in transit capital projects or operations, it opted for a DBFOM model to ensure quality of infrastructure and services. While the concession agreement with Bombela ends in 2026, stakeholders remarked that the Gauteng provincial government will likely put the service out to tender again due to high service quality of the private-sector consortium.   

For Gautrain, municipalities were given a new train and stations and were granted betterments, but they did not contribute funding to the project. While it can be difficult to coordinate funding between many levels of government, stakeholders remarked that they wished they had utilized local funding sources. Stakeholders recommended that future projects garner local contributions, even if it is a small amount, because ultimately the transit project benefits the residents of cities and the funding contribution will ensure they have a greater say in project outcomes.  

Gautrain was a personality-driven project that leveraged public support to help drive it through government and different administrations. Interviewees cited two individuals, van der Merwe and Shilowa, who provided consistent political and technical leadership for the project. After Shilowa left politics, the project had sufficient momentum and wide base of popular support. Additionally, a shared sense of pride in having the first higher-speed rail system in the African continent contributed to widespread public support, even as some questioned the project’s high cost and intended beneficiaries.