Economic Update

Published 22 Jul 2010

The controversial plan to build a high-speed train link between Johannesburg and Pretoria was finally approved by the cabinet last week, after months of wrangling and bitter acrimony. However, serious doubts about the project remain.

The rail link was originally priced at R7bn ($1.11bn), but costs have spiralled to R20bn ($3.16bn) before the first section of track has even been laid.

Last month, the National Assembly transport portfolio committee found the project was too costly when compared to other solutions for reducing congestion and that it would leave South Africa dependent on foreign imports of spare parts for the trains.

Known as the Guatrain, the project was conceived to provide a high-speed service between the province of Guateng’s two principle cities, Johannesburg and Pretoria. It is hoped Guatrain will relieve congestion on the Ben Schoeman Highway, which connects the two cities, which are so close that they are virtually connected by the ever-growing suburban sprawl. Travel between Johannesburg to Pretoria should roughly take between 30 and 40 minutes, but during rush hour the journey can take anything up to three hours.

The train project was also a centrepiece in South Africa’s bid to host the FIFA World Cup in 2010. If built in time, the train will ferry spectators between Pretoria and Johannesburg.

Guatrain is also an important part of the government’s strategy to increase public spending and boost growth. The project has been heavily scrutinised by the media, with commentators highly critical of the government’s ability to manage large-scale infrastructure projects. South Africa’s meagre budget deficit of 1% of GDP has left the government with plenty of cash to spend, but little ability to spend it. Years of frugal management and confidence-building austerity measures led to many civil engineers, skilled workers and project managers seeking work abroad.

Other major projects on the table include new power stations, more rail infrastructure and new port facilities at Richards Bay. Guatrain will therefore be seen as a litmus test. The government is currently on the hunt for engineers in India and among the South African diaspora, which is thought to number around 3m. The later is the preferred target group because of the oddities of the South African labour regulations, which make it particularly difficult for South African companies to hire foreign workers. There are significant political sensitivities surrounding labour market reform in South Africa, just as there is in any democracy.

The general sentiment among ordinary South Africans is cynical when it comes to any large-scale projects. Recent high-profile corruption trials over backhanders and bribes deriving from defence contracts with European defence firms have added fuel to the flames. The standard line from many people is that the last time the government spent significant amounts of the public money the deputy president was impeached. The political fallout from the trial of Jacob Zuma is far from over.

The project is also very unpopular with many Johannesburg residents because the construction work will close a large section of Oxford Road, one of the city’s major traffic arteries, for three years. This would be a bit like closing the Cromwell Road, or the West Way in London.

There is an understanding among the government, the public and commentators alike that there is a desperate need for investment in public transport, which is virtually non-existent in South Africa. There is, however, a fierce debate over priorities. The Guatrain is designed to take drivers off the road and is therefore often criticised as a train for the rich white and new moneyed black elite. Many commentators argue that the project does nothing to alleviate the plight of the working classes who still struggle with the legacy of apartheid, which deliberately placed townships out of sight and therefore far from the work place. Hours of commuting in minibus taxis is the norm for most of these people.

The government announcement that it planned to go ahead with the project highlighted benefits such as “an inclusive feeder network comprising of buses, taxis and rail and, where possible, integration of Guatrain with [the existing] Metrorail”

Metrorail has attracted an unfortunate reputation, hitting the headlines recently when frustrated passengers set fire to a carriage.

Despite all the flak Guatrain is drawing, it is an ambitious project and the cabinet’s approval will lead to Africa’s first high-speed train. This will undoubtedly make a strong statement to the rest of the world about which direction a post-apartheid, democratic South Africa is headed. Nevertheless, as the chairperson of the transport portfolio committee, Jeremy Cronin, put it last week, South Africa may look back with nostalgia on the projected R20bn price tag if patterns from similar international projects play themselves out here.