Opinionista Ian Ollis 22 October 2013

Metrorail vs. Gautrain: head to head in the rush for big money

Prasa’s Lucky Montana is hoping to get lucky. No, not like that! He has raised about R40 billion for the first half of his rolling stock order of R123 billion (Yes I know the maths looks wrong, just stick with me). The order is for R51 billion to get started, and therein lies the problem.

Treasury wished him luck and told him to find it on capital markets, borrowings from foreign banks, investment corporations and so on. Basically debt finance. And then Prasa looked at the interest payments. And that’s when everyone got indigestion.

These new trains are for Metrorail, which currently requires about a 50% subsidy to survive. So apart from getting half the operational money from the taxpayer, Lucky and his team realised he was going to have to get all that interest money from somewhere too. And putting the price up at the fare box is difficult. 50% increases will result in more burning trains. So he’s between a rock and a hard place.

So where do we find a loose R11 billion lying around, interest free? Simple, of course: Treasury (that’s your and my money). So back to Pravin we go. Please, Mr Minister, sir, need a bit of a handout! No, not a hand up, we can’t give it back. Lunch money….#eish. In a week or so, Lucky is hoping that in the Medium Term Budget Review he’s going to get lucky and find, between its sweaty pages, a crumpled little cheque with some big numbers on it that no-one will really want to talk about.

Of course Jack van der Merwe (the “brains behind the Gautrain”) knows that and he needs a big one too. He has a little problem of his own. Gautrain is a success. There, I said it, call the papers! It’s a success because it does one thing that every government since about 1960 has been battling to do – move Pretoria residents to their place of work in Johannesburg fast, cheaply and in #@*ing big numbers.

Remember the Metroblitz? Damn good idea. As fast as Gautrain, worked on existing narrow rail lines, could tilt around corners, serve coffee and deliver you to downtown Jo’burg when that was still something middle-class people thought was sophisticated.

It ran into trouble because it pushed all other traffic (slow coaches) off the main line as it whooshed by, didn’t attract big enough numbers and was promptly shut down. But boy, did we invent new technology in those days? I wonder where the old thing is. Museum some place?

Enter Gautrain. This mother fixed the problem. Built new rails, no shunting slow traffic off the line, and with the congestion starting to cause virtual gun battles on the freeway, people switched (and by international standards, a ticket to Jo’burg or Rosebank from Tshwane is cheap). Only you just can’t read your paper. Or get a coffee. Or chew gum. Or look improperly at the security guard. You get the idea. It proves the adage wrong that throwing money at something can’t fix a problem. It did. Lots and lots of money, though.

Back to Jack’s problem… His traffic is one-directional and is destination traffic. No one gets off at Midrand or Marlboro (nicer name for Alexandra Township). They all want to go to one place: Sandton. So it’s Pretoria to Sandton in the morning and Sandton to Pretoria in the afternoon. And that’s it. It does that very effectively.

But it’s not as financially viable as people getting on and off at Midrand, Marlboro, Rosebank and the one they forgot to build – Killarney. And of course the VERY big elephant in the room is that no one is going the other way. Almost no-one lives in Johannesburg and works in Pretoria and needs a Gautrain to get there. Apparently. So it’s one-way traffic and you have to move the trains back the other way half empty and probably making a loss.

And now you know why Bombela just isn’t that keen on making more rolling stock available to move more people from Pretoria to Johannesburg. Because they first need customers going the other way and using those in-between stations. Hence those off-peak discounts coming in. Jack van der Merwe is well aware that if he creates new interconnecting routes, then Gautrain can diversify and create new traffic on the current system coming in at other stations than Pretoria. If he doesn’t, it may always just be a one-way train line from Pretoria to Jo’burg and back.

So back to Lucky. Jack has just tabled his proposed new Gautrain routes at the same time as Lucky is lobbying for that R11 billion. The message is clear. Both Gautrain and Metrorail need money and will need money for a long time to come. These two entities are now going to go head to head for cash. Jack will lose. The key Metrorail deals are already signed.

They have three companies upgrading the signalling on the three big provincial metro systems; Durban, Cape Town and Gauteng, and the deal with Alstom/Gibela is also signed – a week ago. For that to be signed without a plan for cash, would be dangerous, and with eTolls ringing in their ears, I am quite sure that we will see a big dirty R11 billion cheque or guarantee of some sort in that little red box carried by Pravin in a couple of days. Gautrain, for now, is going to be stuck in a rut. DM

Ian Ollis is a DA MP and can be followed on Twitter @ianollis