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.

  • biskit - 2011-06-21 08:55

    I say let people travel for free then on sundays and off peak times

      1gascan - 2011-06-21 09:17

      Agreed - the "annual subsidy" will cover the costs of running it on a Sunday anyway.

      SiphoNdlandla - 2011-06-21 09:51

      Ruining of a great land, By great leaders. All the way to the ground we will go.

      Francois - 2011-06-21 10:10

      Cronin, you knew about the guarantee, but not the size? How stupid can one communist be? Did you ask for the size and then got a quote for taxi money?

      Noir - 2011-06-21 10:15

      Now thats a good idea!

      za101 - 2011-06-21 10:20

      i think they should charge R25 a person. I travelled on the airport to Sandton route last week, and I was the only person on the carriage. Its a no brainer, bring down the price of tickets

      Wired - 2011-06-21 11:56

      Ok, ive done a few calculations.. Just because i was bored. The Gautrains (i counted both trains going back and forth from sandton to the airport) would have to do loads of 210 people per trip paying 100 rand each to and from the airport for 12 hours of the day. 6:00 to 18:00 every day, 365 days a year ever half hour, just to pay for the amount government wants to pay using tax payers money!!This is Besides the current amount $$ being generated from the amount of people being carried on a daily basis for the train to break even with costs which it isnt doing. We need to take into consideration that most users of the train dont go to the airport and only pay 21 rand a ticket.. So if i can do that in 15 minutes, why the F#ck cant our very cleva people in government do this before making the decision on whether or not this is going to be a total disaster!!! EISH! We are having the problem

      biskit - 2011-06-21 12:34

      @ 1gascan - haha ok maybe not off peak times then "Sundays and Public holidays" Afterall we are paying for something alot of us wont use - let some people benefit its the least that they could do

  • SiphoThabalala - 2011-06-21 09:03

    Yebo since the black man is in charge, everyone suffers under this tax. I liked the apartheid era more, I know it was wrong and was against it. But white man made SA what it is today, and teacher me everything I know today. I am a proud black man, but not very proud of what black people is doing currently in SA. Julius Malema is just leading his entire follower in the wrong direction. He is leading them to hate, kill and ruin everything that was built by white men along with me. It is wrong I do not know whom they are worshipping but it is not God, because then you would not hate, kill and promote racism. I just wish white men could rule again it was the best time of my life.

      1gascan - 2011-06-21 09:11

      So then why the ANC flag Sipho...? Most whites don't agree with their ideals... Do you honestly think a white person will ever be at the head of the ANC???? I don't think so. Your name does not match your reasoning... seems like something is fishy with your profile mate. Post from the person you actually are!

      MK007 - 2011-06-21 09:12

      something suspect about this post

      gabba_gabba - 2011-06-21 09:13

      dude i've read a few of your posts this morning on several articles, and it sounds to me that you are a white man posing as a black man... by the way, your "surname" is supposed to be spelt tshabalala. also, for someone who apparently speaks broken english, you spell very well. Piss off you troll!!!

      virtualv - 2011-06-21 09:20

      seriously? - 2011-06-21 09:23

      LMFAO, White man disguising as a blackman, you even got the spelling for the surname wrong dude, its Tshabalala not thabalala ididot.

      Hendrik - 2011-06-21 09:27

      Idiot. Did you really think you could convince anyone? And really, Sipho Thabalala? not only is the surname spelt wrongly, that name is the same as "Jan van der Merwe" 90% of the time it is made up. So please dude, we all know you are a white dude ( a sad one for that matter)piss off

      Fab - 2011-06-21 09:35

      at be man enough to show ur true identity!!! I doubt that Sipho Thabalala (BTW its Tshabalala) is your real name

      tdk25 - 2011-06-21 09:35

      bit&(* please

      BLACKFRUIT - 2011-06-21 09:45

      Stop playing yourself fool lol

      GenerationX - 2011-06-21 10:11

      As a white man I am very embarrassed about Sipho Thabalala- what an absolute raging idiot. He insists that white rule is the way forward but he has uploaded and ANC badge for his picture, and he actually suggests that apartheid was efficient. Please don’t pay attention to the small town backward thinking in-bread knobs as they are a minority stuck in the past. I apologies for this nut guys please dont give him any attention.

      Chris - 2011-06-21 10:12

      Idiot. Stop impersonating black people. It only makes YOU look stupid.

      Wayne - 2011-06-21 10:12

      SiphoNdlandla and SiphoThabalala is in fact the same person

      Zulu Whyte - 2011-06-21 10:23

      Who are you trying to fool?

      jowza - 2011-06-21 10:26 chris statement.applies to you also.dressing like a black man makes you look stupid

      senkgisha - 2011-06-21 12:11

      You are not black...go fool others you pink moron.there's no such surname but Tshabalala not te S####t you written!!!

      jevoixtout - 2011-06-21 12:29

      Gautrain is just another black hole created to pour tax payers money into.

      Currie_Mafia - 2011-06-21 12:38

      You're an idiot in any language or any race !!! Go grow a spine & come back...

  • ?????? - 2011-06-21 09:04

    EISH And what do the "masses" have to say about this? R360m could have been used to provide scholarships,housing,bursaries,food etc to needy people. Then they wanna toy-toy when they are told "theres no maaaaannie",yet they continue to vote for the ANC. EISH EISH EISH

      Pickle - 2011-06-21 09:37

      The masses don't pay tax remember.. they get everything for free. It's the hard working citizens black and white that pay those taxes....

      Martin Menge - 2011-06-21 09:39

      Just the saving that our economy makes from not importing the amount of petrol that the commuters would have been purchasing if they were using cars and buses validates the subsidy. Grow up and look at the bigger picture. What does it help to give a man fish everyday? You never teach him how to fish for himself?

      EDI2000 - 2011-06-21 10:11

      Sorry Pickle but you wronge everyone pays tax including the poor its called VAT and its attached to all goods

      Born To Fish - 2011-06-21 13:32

      EDI no it is not attached to all goods! Basic foods are exempted! So sorry ne!

  • Theoniel Bosman - 2011-06-21 09:04

    Stop making Fairs so high...PLEASE the Gautrain is going to be here FOREVA...SA needs to stop thinking about making "quick money" on every little thing, that is why we are where we are!

      Martin Menge - 2011-06-21 09:41

      I agree, I hope they built a fee reduction mechanism into the subsidy. i.e. if it looks like they will need the subsidy half-way through the year, the subsidy goes directly to cutting the cost per ticket.

      abrham - 2011-06-21 10:07

      kak en betaal is die wet van transvaal

  • Goose - 2011-06-21 09:14

    "Jeremy Cronin said such a guarantee had been on the cards but said he had not been aware of the size." So if the deputy minister of transport does not know what is going on, then by implication the ANC run a project but have no idea of the costs before they start! A lot of us said that the problem was always going to be to GET to the Gautrain, and then to get back to the station on the way home. Then you still have to drive to the station and pay for parking. Now the ANC asses want to put in a high speed train to Durban!!! Most dont even pay tax, so who the hell is going to pay for THIS fairy-tale?

  • Badger - 2011-06-21 09:15

    Why build it in the first place if the anticipated that there would not be enough commuters? Another white elephant perhaps?

      grant9 - 2011-06-21 10:26

      Definatly a white elephant. I knew it would be. I once posted on another forum that Jhb is too spread out for this type of railway to be viable.

  • Kevin King - 2011-06-21 09:16

    Ride the Gautrain AND go to soccer stadiums or else your IRP5 will look like this: Net PAYE owed: xxx plus patronage guarantee cost x plus NHI tax x Net taxes owed: xxx

  • dotty_01 - 2011-06-21 09:17

    yet another failure.... and yet another instant where the tax payers have to pick up the pieces. these douchebags must think carefully about sending all the skilled white people packing - who is going to pay for their mistakes when we have all gone ????? the affrimative action black diamonds? ja right...

  • AndV - 2011-06-21 09:18

    It actually makes sense now, no wonder Bombela has such a poor customer care attitude, they don't need the support of commuters, the gov will pay for the shortfall..... Is this why we pay the senseless "Green tax" on new vehicles introduced by our arrogant minister of finance? He avoids a debate about this because it is indefencible. Ask why SA don't save money, how can we with all these new taxes.

  • Ederik - 2011-06-21 09:20

    This sounds more like a nice (non) performance bonus for the Bombela Consortium who most likely consist of ANC buddies of the governmund. Why not use it on roads, housing, scools etc? And why must the whole country pay for the Gautrain?

  • IandI - 2011-06-21 09:20

    OMG! Another white elephant, thanks to the ANC govt.

  • Carlos - 2011-06-21 09:23

    Make the Gautrain Fares cheaper then more people will use it, which in turn will make the Tax Payer contribution less, or, is all this another "clever" way of filling some government officials pockets with Tax money with a "Legitimate" reason???

  • Tantrum - 2011-06-21 09:24

    I stay in the South of Joburg and thus can't use the the gautrain - why the f#ck must I pay for the people that can use it? The same go for everybody staying outside of Gauteng?

      Matt - 2011-06-21 10:21

      Good point - I'm in the East Rand and work in Sandton. So... DRIVE to Rhodesfield (on a busy highway with tollgates), park all day (do I trust the parking lot with my car for a full day), R21 to Sandton, R10 for a shuttle to work (or walk 1-2km), then the same price back - oops and my wife works in Orange Grove so then how does she get to work...

  • York Hunt - 2011-06-21 09:26

    You got to love this people! The whole Gautrain was a swindle. A mechanism to skim money off the coffers. Now that its a bit of a white elephant, the tax payer can pay even more. You cannot make this stuff up! When i was younger, we used to buy MAD magazine. It was a hoot! Now the news is even funnier!

  • david - 2011-06-21 09:29

    Can't we all just ignore the damned thing and watch in fascination as Bombela goes bankrupt?

      grant9 - 2011-06-21 10:59

      I would gladly just sit back and say "I told you so". Trouble is I will still have to pay for the mess.

  • bheki.dingiswayo - 2011-06-21 09:30

    Nationalise! Nationalise! Malema where will this come from (Guarantees) if the banks, mine and farmers does not pay taxes. Mugabe has nationalised most of the farms without compensation, most Zimbabweans( blacks) flee south in order to get job opportunities and food. What is happening with land in Mozambique- what are thet exporting in terms of food except fish that is harvested from the sea. Think again Malema, Please Think again- Nationalisation will not solve our problems

  • Martin Menge - 2011-06-21 09:34

    Subsidies like this is a must and very beneficial. 1st, the economy does not loose the money as it is money that would have been spent on importing petrol, 2nd it is a motivator for tax payers to actually use the infrastructure. Jeremy, please, where is your sense of socialism in a market economy? We need subsidies for infrastructure development, otherwise we only have the private sector and we know it does not deliver anything that lasts... Subsidise the Moloto link, subsidise more routes (East Rand West Rand link? Pretoria circle route?) Calculate the amount of money the economy looses to foreign fuel imports and the economics of the matter start making sense!

      Tinkie - 2011-06-21 13:41

      Ummm, Martin, not everyone lives in Jhb or even Gauteng for that matter. I have never even SEEN the Gautrain. Now why must my hard earned money subsidise something I more than likely will never make use of, nor will most people in the Western Cape, the Eastern Cape nor other provinces. I would have to spend a load of money on petrol just to get there to then pay a fortune for something that my tax money would be subsiding. Nothing against Americans but you remind me of them. In their minds, there is only America, no rest of the world. Maybe for you there is also just Jhb, no rest of South Africa!!!!

      Roban1 - 2011-08-02 11:18

      Martin your logic is flawed. You're saying the subsidy the govt is giving is far less than the cost of importing fuel that the commuters are saving by using the gautrain. Yet this subsidy is being paid BECAUSE and WHEN not enough people are using the Gautrain. So the fuel costs remained the same. So again this country is rewarding failure. Whether the gautrain makes money, or just consumes it via this subsidy (which rewards NON-USAGE), the taxpayer has to foot the bill. Facepalm.

  • Mike - 2011-06-21 09:40

    Guarantee R1m a day in case there are not enough paying passengers? Well with a fall back plan like that what incentive do they make it work? What sort of occupancy would you need not to rely on the guarantee vs. what the occupancy is now? An article with that sort of information would be worth reading.

  • Tj - 2011-06-21 10:10

    How the FK are the taxpayer paying.. And some one else takes the money..WTF??

      Matt - 2011-06-21 10:23

      What's new?

  • raxton - 2011-06-21 10:19

    Has any countries who have nationalized certain sectors citizens ever benefited from such a decision? I'm asking from physically getting money in their pockets? Do you guys who follow Julius really believe that once everything is nationalized you are going to get anything? Is eskom not nationalized? Who's benefiting from that. Is saa not government controlled? Who is benefiting from that? An elite who are known as board members?

      50something - 2011-06-21 10:50

      Your post is out of context

  • Currie_Mafia - 2011-06-21 10:20

    Deputy Minister of Transport,..."not told"..."unaware"... I just hope that his comments are not "taken out of context"...

  • Gillie - 2011-06-21 10:24

    and this is a surprise?

  • Matt - 2011-06-21 10:38

    CM plank 6; Centralisation of the means of communication and transport in the hands of the State. Watch this space... (Google the rest as N24 deletes any related posts if you enter the full name of CM).

  • Zion - 2011-06-21 10:47

    Been laughing my gat off since reading the article. This shortfall, on a permanent basis, was predicted. Now the taxpayer must bail the lot out. The only answer now, to save face, is to attract more commuters and to do that the ticket price must be lowered to a point where commuter/price balances. Alternatively, The whole system should be nationalized then the remnants sold to the highest bidder. Malema can show us how.

  • 50something - 2011-06-21 10:49

    Cronin does not know how much the guarantee is, why would he, it is not his money. I agree with other bloggers, reduce the fare - R105 from Sandton to OR one way is outrageous, get the volumes up by reducing the cost, then you'll make profit, the current price structure is rediculous. The train is just not attractive enough to let people switch from cars to train. That is why they want to toll fees to be so high, to force people to use alternative means of transport

  • Cecile - 2011-06-21 10:50

    @ Otiose - it's all very well your thinking that we've not bothered to read through the documentation, but the fact that 'the above only applies if gautrain is unprofitable - something which is highly unlikely based on the studies and financial predictions done over the past decade' is dubious in itself - I mean - we're not exactly good at financial predictions in this country - look at the World Cup spend vs income!! Any fool could have told SA that people aren't going to FLOCK to a crime-ridden country, no matter HOW many pretty empty stadia adorn our countryside!! So OBVIOUSLY it's not going to be profitable, based on the fact that it's cost ... what ... DOUBLE what it was meant to have cost? Don't be so condescending - the fact that we don't READ the docs available doesn't mean that we're not exposed to the truth of the matter at hand.

  • semaj - 2011-06-21 10:57

    What the hell, we have been subsidising useless transnet and prasa for non-existent services.

  • JohnBam - 2011-06-21 11:01

    Gautrain will only work if: 1) Travel & parking is safe (at this stage this seems to be the case) 2) Pricing structure is affordable and convenient (sucks at this stage, it is not possible to buy a "day-pass", valid between all stations, any number of trips between them, any feeder bus). Go try any European public transport system. 3) Buses and trains are frequent, and on time (the moment I miss a flight due to buses not arriving, the system WILL not see me again). 4) The secondary infrastructure up and running, e.g. municipal buses (REALLY sucks at this stage due to late/non-arrival). This part is the backbone of the system, whichever way one looks at it. Sydney public transport has realised that some routes would need subsidisation, which is fair, I think. But to subsidise the whole system over long periods of time, that's a lame duck. Work on points 1-4, and it will be a success.

  • peter.odendaal - 2011-06-21 11:48

    I had the priviledge to use this fantastic service and sublimentary connecting busses last year. South Africans are spoiled!. Look how many cars are on the road with one person inside!The service is cheap , efficient and saves a lot of fuel......and deserves support.

  • Wired - 2011-06-21 11:53

    Ok, ive done a few calculations.. Just because i was bored. The Gautrains (i counted both trains going back and forth from sandton to the airport) would have to do loads of 210 people per trip paying 100 rand each to and from the airport for 12 hours of the day. 6:00 to 18:00 every day, 365 days a year ever half hour, just to pay for the amount government wants to pay using tax payers money!!This is Besides the current amount $$ being generated from the amount of people being carried on a daily basis for the train to break even with costs which it isnt doing. We need to take into consideration that most users of the train dont go to the airport and only pay 21 rand a ticket.. So if i can do that in 15 minutes, why the F#ck cant our very cleva people in government do this before making the decision on whether or not this is going to be a total disaster!!! EISH! We are having the problem

  • George - 2011-06-21 12:21

    I was at Loftus on Saturday to watch rugby. We arrived at 11.30am and parked next to the Gautrain rail. We were socialising and noticed the Gautrain whizzing by with no passengers at all. The Gautrain was running on schedule and every 15 minutes odd it would whizz by...EMPTY not one soul on board. Four hours later and probably 40 passings of the Gautrain I made a note of monitoring passengers. To my amazement, not a single passenger was spotted during my four hour stay. The mind boggles as to how much this "White Elephant" is costing the taxpayer.

      JohnBam - 2011-06-21 16:19

      That line is not operational yet... they are busy with the mandatory testing of the line (under correction, but around 100 round-trips?). Expected opening date first week of July....

  • Cecile - 2011-06-21 12:30

    Of course they wouldn't say what the full annual guarantee was .... they don't want to have to pay for a couple of million heart attacks as well!

  • ZACKIE - 2011-06-21 13:07

    anc always coming up with new ways to screwover the taxpaying public

  • Born To Fish - 2011-06-21 13:30

    And we have to pay tolls? F YOU!!!!

  • Born To Fish - 2011-06-21 13:32

    And we have to pay tolls? F YOU!!!!

  • Borris - 2011-08-02 09:25

    1 Boer sounds like a politician....

  • nn.prv - 2011-08-02 10:15

    We knew it all along! So whats the news? Great project too .

  • Randall - 2011-08-02 12:52

    No matter how me moan and groan, having to pay other countries to develope this country has become and will stay the norm (at least for the near future. Remember that we have not got the skills that these people have. Look at how under-budgeted that Gautrain was (started at about R7 billion). Then there is the new Gauteng freewaays (built be Austria), the oil pipeline (also under-budgeted). Now they also want to build a high-speed train line from Durban to JHB (estimated at R550 billion - wonder what the eventual cost will be. There is of course also the arms deal that no one wants to speak about. Until South Africa gets up and becomes a manufacturing country of note, this is what it will be like - the tax payer will just be drained more and more. Look at your richest countries (Germany, China, Japan, etc), they are industrialised. Look also at our clothes that we wear - we look like stupid billboards advertising American Brands made in China - wonder where has the proudly South Africa gone. More like proudly IndioChina.

  • mmmmTim - 2011-08-02 15:11

    So if all the rates and taxpayers are subsidising the Gautrain (which is a great investment)- regardless of whether or not they use it, how is that different to the new toll roads (which are also a great investment). To pay BILLIONS to collect the tolls is absolute madness - far easier - the fuel levy!!! Ring fence the fuel levey and forget tolls, just maintain (all) the roads properly for a change.

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