Report: Taxpayers subsidise Gautrain

2011-06-21 08:52
Johannesburg - About R360m a year of taxpayers' money was promised as a subsidy - termed as a "patronage guarantee"- for the Gautrain if there are not enough commuters, The Star reported on Tuesday.

The Gauteng Department of Roads and Transport's budget for 2011/12 includes R259m in "patronage guarantee costs" for the Gautrain project.

This is what the province promised to pay Gautrain concessionaire Bombela consortium if there were not enough passengers.

Next year's guarantee was expected to be R360m, as this year's payment takes into account that the Gautrain would only be fully operational only next month.

On Monday, Deputy Minister of Transport Jeremy Cronin said such a guarantee had been on the cards but said he had not been aware of the size of it.

"We were never told at what level they were guaranteeing... We certainly asked that question a great deal.

"Let's hope it's 'in case', or at worst transitional," he said.

Cronin said a huge guarantee would "absolutely not" be considered for other projects.

The provincial department referred queries to the Gautrain Management Agency (GMA).

The GMA on Monday confirmed to the daily newspaper that the R259m quoted was for part of the year but would not say how much the full annual guarantee was.
Read more on:    gautrain  |  jeremy cronin  |  johannesburg  |  service delivery

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