Although regarded as a slightly older project, the Gautrain Rapid Rail Link in South Africa was extremely impressive and had made a major impact on the lives of both citizens and tourists in South Africa. In June 2012 the project was completed with the final section of track being finished ahead of the World Cup, enabling a safe, cost-effective and environmentally-friendly transport solution.

IPFA identified at least three PPP/concession forms – with increasing level of financing provided by the private sector – under which the Gauntrain Rapil Rail Link could be implemented. i.e. no private investment but privately managed operations, partial private investment (superstructure and equipment) and privately managed operations, full private investment (infrastructure, superstructure and equipment) and privately managed operations. Additionally, IPFA analyzed each of the PPP/concession options and recommend the best applicable model based on South Africa’s legal and regulatory arrangements, potential attractiveness to the private sector and bankability.

Financing was complicated by the necessary financial involvement of Gauteng Province as the grantor, providing generous subsidies during construction and into the operating period to ensure the economic viability of the project. The local banks that underwrote the project were financing the first rail PPP in Africa, which at the same time has the largest debt funding requirement of a South African PPP to date. The 80 kilometer route includes a 15 kilometer section under the center and northern suburbs of Johannesburg—a major civil engineering undertaking. The tunnel had to be constructed using different methods, including the use of a custom-built 160-meter tunnel boring machine imported from Germany, in order to cope with the changing ground conditions.

Today, Gauntrain Rapid Rail Link supports economic growth for the region and has facilitated Black Economic Empowerment, a program launched by the South African government to redress inequalities of Apartheid, through skills transfer between international law firm Pinsent Masons and local law firm Ledwaba Mazwai.

The all-new system was a game-changing concept in public transport in a country where under-funding and political indifference had reduced the existing transport networks to a level where they were unsafe and decrepit.