Welcome to the UDZ TAX INCENTIVE CONFERENCE Day 1 – 18 Aug 05

1. Welcome to the UDZ TAX INCENTIVE CONFERENCE Day 1 – 18 Aug 05

2. Gautrain Rapid Rail LinkPresentation at the Conference on Tax Incentives in the Johannesburg UDZ Jack van der Merwe (Pr. Eng) Project Leader: Gautrain Chief Executive: Public Private Partnerships Gauteng Provincial Government

3. Overview of Gautrain & its Impact on the Johannesburg CBD • Strategic economic infrastructure initiatives • Objectives • Description of the project • Benefits of the project to Johannesburg • During construction • During operation • Developments around the station • Accessibility of the CBD and UDZ

4. Strategic economic infrastructure initiatives

5. Strategic Economic Infrastructure Initiatives • Various initiatives of the Department of Finance and Economic Affairs such as Blue IQ, Gautrain and the GPG Precinct, GEDA • Development of the Gautrain Provincial Government to promote a smart province • Projects in the Johannesburg UDZ: • Gautrain Rapid Rail Link and GPG Precinct (DFEA PPP Unit) • Constitutional Hill (Blue IQ and JDA) • Newtown (Blue IQ and JDA) • City Deep Transport Logistics Hub

6. Proposed Provincial EconomicDevelopment Strategy • Existing economic strengths : • Mining • Heavy Industry • Financial & Banking sector • Proposed strategy: • Smart industries- Gauteng the “smart” Province • Move toward high value-added manufacturing • Enhancing the business services (Finance & Banking) sector and business tourism

7. Objectives of the Gautrain Project

8. Development Goals • Economic growth, development and job creation • Must meet other goals of Government (SME promotion, Business tourism, BEE, etc.) • To promote business tourism by means of the link between JIA and Sandton

9. Transportation Goals • Alleviate severe traffic congestion (traffic volumes in corridor growing at 7% p.a. for more than a decade) • Show Government’s commitment to the promotion of public transport (National Land Transport Transitional Act, Act 22 of 2000) • Improve the image of public transport with this project and attract more car users to public transport • To link to the Tshwane Ring Rail Project, linking Mamelodi, Atteridgeville and Soshanguve / Mabopane • Part of holistic transport plan and network for Gauteng

10. 2000 Northbound and Southbound Vehicle Volumes

11. 2005 Northbound and Southbound Vehicle Volumes

12. Spatial Development and Urban Planning Goals • To contribute towards urban restructuring, shortening travel distances and improving city sustainability • Stimulate the renovation and upliftment of the Johannesburg and Tshwane CBDs • Link the main economic nodes in Gauteng with JIA

13. Integration between railway and urban environment

14. Overview of the Proposed System

15. Hatfield Pretoria Centurion Midrand Sandton Marlboro Rhodesfield JIA Rosebank Park Station Hatfield Pretoria Centurion Midrand Marlboro Sandton Preferred Route Rhodesfield Anchor Stations JIA Rosebank Stations Airport Park Station

16. High quality of modern rail systems

17. Major construction works associated with rail systems

18. Rail Services Specified

19. PPP Projects • Gautrain is a PPP Project where public sector resources are expanded by Private Sector finance for the building of infrastructure for: • Service delivery • Job creation • Fighting poverty • Multiplier effect in economy

20. PPP Components • Technical content • Financial proposal • Legal mark-up • Socio-economic Development

21. Johannesburg Park Station

22. Johannesburg Park Station

23. Johannesburg Park Station Location

24. Station Definitions (1) • Rail Functional Area • Railway functional elements, such as fare collection and ticket sales for exclusive use of passengers • Station Precinct • Development of stations to serve the Gautrain system, such as station building, parking and modal transfer facilities • Impact Area • Area where land use is expected to change to capitalize on opportunities created by the Gautrain, e.g. hotels to serve JIA air passengers

25. Station Definitions (2) • Influence Area • Area where majority of patrons are located and where land development may be diverted to increase patronage, e.g. residential densification • Catchment Area • Area from where patrons are attracted and served by feeder and distribution services • Impact Area and Influence Area create opportunities for private sector to capitalize on benefits of the Gautrain

26. Functional Area of Johannesburg Park Station • CBD (immediately south of station) • Transport related uses and services at the station • SARCC, minibus taxi, buses, long distance passenger rail, tour coaches • Newtown south-west of station • Mixed-use offices and residential uses in Braamfontein, including Johannesburg Civic Centre • Social and cultural uses surrounding the station

27. Transport Linkages at Johannesburg Park Station • Municipal roads that serve pedestrians, cyclists, private vehicles and road-based public transport • Minibus taxi services • Bus services • Tour coach operations • Commuter service provided by metro rail (SARCC) • Long distance rail passenger services

28. Feeder and Distribution Services • 6 Routes • Auckland Park • Parktown / Bellevue • Wemmer Pan • Booysens • CBD Distribution west • CBD Distribution east • 2000 Passengers Year 5 • Urban Development Zone well-served by feeder and distribution services

29. Train Service Capacity Requirement: Johannesburg Park Station • Year 5 : 3 200 peak hour passenger movements • Year 30: 5 600 peak hour passenger movements

30. Modelled Journey Time And Fares

31. Parking Requirements at Johannesburg

32. What will the Economic Impact be?

33. Vision for Johannesburg Park Station • Functional area • Improve marketability of Johannesburg CBD as cultural and commercial hub from African and International perspective • Regeneration of CBD as place of work through high quality public transport access • Promote tourism within CBD

34. Station Functional Area Guidelines • Developed in consultation with Municipality as part of the Gautrain Rapid Rail Link planning process • Catalyst to create compact city, limit urban sprawl and utilize urban land and infrastructure more effectively and efficiently • Stations are key points of intervention • Establish new urban form that embraces the Gautrain system • Opportunities • Establish mixed land-use – generate trips throughout the day • Increase density

35. Current Land Uses in Impact Area (1 km X 1km = 100 ha)

36. Densification and Land Use Model * Reduction in office space projected

37. Economic Impact in Johannesburg CBD CAPEX CATALYST TO ESTABLISH NEW REAL PRIVATE SECTOR INVESTMENT Real estate development opportunities for new & renovated office residential and business space: * Transport * Retail Trade * Accommodation * Financial Services * Business Serices Increased business sales estimated at R 1.1 billion

38. Economic Impact in Johannesburg Greater CBD Influence Area NEW METROPOLITAN-WIDE TRANSPORT FACILITY INCLUDING COMPREHENSIVE EXISTING FACILITIES WILL CREATE A DEMAND FOR NEW ECONOMIC ACTIVITY Private and public sector response to new demand through: * Increased intensity in the flow of people * Demand or accommodation close to stations * Fast and reliable access directly to the CBD * Increased Disposable Income * Increased demand for retail trade, business & personal services Translate into new and revitalized CBD office and retail space and demand for accommodation

39. CBD Access to railway

40. Economic Impact in Johannesburg CBD SUPPORT ECONOMIC ACTIVITY AND SOCIAL SERVICES BASED ON IMPROVED TRAVEL ACCESSIBILITY * Focal point for development within walking distance from station * Increase in property values close to stations * Access to cultural, social and recreational facilities * Fast and reliable access to JIA airport * More socially inclusive * Land use and transport integration * Reduced need for CBD parking

41. Some International Examples/Experiences

42. International Experience • Toronto: Property values around stations are double the values in areas without station access • Washington: Stations became focal points of commercial redevelopment and promoted substantial new development in surrounding areas • Chicago: Rail projected to generate $8-10 billion. Pulls together regional economy and promotes intra-regional business growth • Hong Kong: Extended rail system resulted in strong inner-city development and affordable housing

43. Development around Hong Kong Stations

44. Socio-Economic Development

45. Socio-Economic Development (1) • BBBEE • Equity • Ownership • Directorship • Training & development • Sub contracting • Procurement • Job creation

46. Socio-Economic Development (2) • Promotion of SMME’s • Focus on women, youth and people with disabilities • Local content • Local labour • Investment / focus on marginalised areas

47. Procurement Process

48. Bombela Consortium Bombardier Transportation Bouygues Travaux Publics Murray & Roberts RATP International Loliwe Rail Contractors Loliwe Rail Express Standard Bank RMB ABSA Gauliwe Consortium CAF Dragados Grinaker – LTA Metro de Madrid CANAC Ufudo Tirisano Nedbank Investec RFQ : 2 Pre-Qualified Bidders (May 2002)

49. Procurement Process (3) • Announcement by Premier Shilowa of Bombela as the preferred bidder on 2 July 2005

50. Financial Closure • Negotiations with preferred bidder commenced after the announcement on 2 July 2005 • This process will take 6 months • The essence of this process is to finalise the concession agreement • The tender phase will only come to a conclusion at the signing of the concession agreement • Negotiations with lenders will also take place inthis phase