South Africa’s richest province facing financial trainwreck WRITTEN BY Shaun Jacobss

[Nat Quinn]

South Africa’s richest province facing financial trainwreck WRITTEN BY Shaun Jacobs

The Gautrain’s R120 billion expansion project is under threat from declining passenger numbers and a provincial government that has suffered from a decade of financial mismanagement.

Instead, the provincial government should invest R120 billion into fixing Gauteng’s existing infrastructure, upgrading taxis and busses, and developing affordable public transport, the Automobile Association (AA) said.

In his State of the Province Address at the end of February 2025, Gauteng Premier Panyaza Lesufi outlined plans to invest R120 billion in the Gautrain’s expansion.

“The Gautrain rail expansion will be a gateway to opportunity, creating more than 125,000 construction jobs while igniting growth in property, retail, and logistics along its path,” Lesufi said.

“Gauteng Government will invest R120 billion in the expansion of Gautrain to the following areas: Soweto via Fourways, Mamelodi, Atteridgeville, Lanseria, and Springs.”

This expansion will take the Gautrain’s rail network from its current 80 km to 230 km. The initial 80 km network cost R25 billion in 2010 and connected Pretoria, Centurion, Johannesburg, Kempton Park, and OR Tambo International Airport.

Lesufi’s expansion plan was confirmed by Gauteng Finance MEC Lebogang Maile in his presentation of the province’s Budget for 2025.

However, Maile said the Gautrain is coming under increasing scrutiny as its financial sustainability has been brought into question.

Maile revealed that the Gautrain has lost five million passengers over the past four years.

The AA said this is a wake-up call that cannot be ignored. This decline underscores that the Gautrain system is financially unsustainable and fails to serve the majority of commuters.

“Yet, despite this reality, authorities are pushing forward with an extravagant R120 billion expansion project, neglecting the pressing transport needs of the province,” the AA said.

“While the MEC claims this expansion will create 125,000 jobs, we must ask: at what cost?”

“Genuine, sustainable job creation should arise from investments that benefit the majority of South Africans – not from sinking billions into a faltering system that is losing its riders.”

The AA has previously wanted the Gautrain to be a financial trainwreck and that any expansion is a wasteful expenditure on a service that does not help the majority of Gauteng’s citizens.

Instead of spending R120 billion on expanding Gautrain’s network, it said the Gauteng government should focus on its existing infrastructure which should yield more benefits for citizens.

The AA said the first thing the government should do is to fix Gauteng’s deteriorating road network to ease congestion, enhance safety, and reduce the financial burden on motorists.

Money should also be allocated to upgrading Gauteng’s existing taxis and buses, with reliable and efficient transport being key for the daily lives of most people living in the province.

To this end, the Gauteng government should also expand accessible public transport. The AA said the Gautrain remains an elitist service that leaves the majority of consumers without viable alternatives.

“From the outset, we have cautioned that this expansion is misguided. With dwindling ridership and mounting operational costs, it is now abundantly clear: We warned you,” the AA said.

It’s time to refocus our investments on solutions that genuinely matter – transport initiatives that uplift all South Africans, not just a privileged few.

The AA called on authorities to reassess their transport priorities and champion practical, inclusive solutions that benefit the many rather than the elite minority.

It also said that taxpayers ultimately foot the bill for the system, saying that billions of rands have been paid to Bombela, the concessions company that operates the Gautrain.

The Gauteng Department of Roads and Transport paid Bombela R2.79 billion in the 2023/24 financial year, up from R2.37 billion the year before.

This payment was made because “the actual revenue and ridership were significantly below the minimum required total revenue projections”.

“Billions of Gauteng taxpayer’s rands have been paid to Bombela since 2012 through the Patronage Guarantee,” the AA said.

The AA questioned whether figures provided to justify further extensions can be trusted, given that the current revenue projections already fall way short of the mark.

“It is quite clear that Gautrain failed to deliver on its ridership projections from the outset, and now the burden of funding falls on taxpayers,” the AA said.

source:South Africa’s richest province facing financial trainwreck – Daily Investor

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