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We are pleased to announce that the Gauteng Provincial Government, represented by the Gautrain Management Agency (GMA), and the Bombela Concession Company (Pty) Ltd (Bombela) have agreed to a comprehensive settlement of all disputes relating to the construction of the Gautrain Rapid Rail Link system (Gautrain).

The mutually agreed settlement brings to an end protracted, costly and multiple legal and arbitration processes between the GMA and Bombela.  The settlement agreement includes the following significant disputes:

• Sandton Station cavern;
• John Vorster and Jean Avenues cantilever bridges in Centurion;
• Water ingress in the tunnel between Park and Rosebank Stations; and
• The Delay and Disruption claim.

In terms of the agreement, the Gauteng Provincial Government will pay Bombela an amount of R980 million and a payment over two years of a capped amount of R294 million. This is in full and final settlement of all construction-related disputes between the GMA and BCC.

Gauteng MEC for Roads and Transport, Dr Ismail Vadi, said “due to the time and extent of the costs involved in legal proceedings, as well as the uncertain outcomes of these protracted processes, the parties have agreed to this comprehensive settlement of the disputes. This is akin to an amicable, all-inclusive out of court settlement of lengthy contractual disputes.”

Bombela Chairman, Henry Laas, welcomed the agreement saying “that he believes the settlement is in the best interest of all stakeholders.  It is expected that all legal and financial processes be finalised by mid December 2016.”

Gautrain is a world-class public transport rail system that has since its inception in June 2010 increased passenger ridership by 26 percent year-on-year. Presently, 1.4 million passengers use the train on a monthly basis.

GMA CEO, Jack van der Merwe, said that the increased ridership on Gautrain indicates that commuters are making a conscious shift from private car use to public transport.

He added that Gautrain has achieved significant economic, social and environmental benefits for the province over time, which includes the following:

• R47 billion estimated total value added to the Gauteng economy
• 34 800 directly created jobs during construction
• 87 000 indirectly created and induced jobs during construction
• 245 000 jobs created by property developments induced by the Gautrain
• 52 percent reduction in the carbon footprint of Gautrain users who used to commute by car
• 24 200 fewer car journeys a day in 2014 due to the Gautrain
• 12 working days saved a year by the typical Gautrain commuter
• Commuter time saving as Gautrain is eight times faster than road travel in peak hour traffic.

Vadi also confirmed that Gautrain services will be improved over the next two years with the acquisition of 12 new trains sets and related signaling and maintenance asset enhancements. “The legal settlement allows the GMA to focus on planning future improvements to the public transport system in Gauteng and paves the way for future investors in the system” said Vadi.

The GMA has concluded the feasibility study on an expanded rapid rail network in the province, which will released shortly.

Issued by Gauteng Roads and Transport