Question
Please read the following article and answer the questions that follow; Article: Why the New Gautrain Route must be scrapped: AA The planned expansion route
Please read the following article and answer the questions that follow; Article: Why the New Gautrain Route must be scrapped: AA The planned expansion route for the Gautrain disregards factual evidence and underscores the poor financial decision to allocate funds to a failing system, says the Automobile Association (AA) of South Africa. The AA said the extension must be rejected and has urged the national government to halt any discussions regarding the funding of such expansions, in a statement on Thursday (2 June). Gautengs MEC for Public Transport and Roads Infrastructure Jacob Mamabolo announced the determination of the new route for phase 1 of the proposed Gauteng Rapid Rail Integrated Network (GRRIN) project at the end of May. The determination of the route starts the process of defining a rail reserve for a future railway in Gauteng and, as such, is the first step towards the expansion of the existing Gautrain network.In August last year, we made a detailed submission outlining our concerns about the expansion of Gautrain. We noted then, as we do again now, that any expansion of Gautrain perpetuates a system which caters for a minority of citizens, all the while costing Gauteng taxpayers billions of Rands to prop up through the so-called Patronage Guarantee which compensates the system for low ridership levels, the AA said. The Association said when considering the serious economic challenges in South Africa, the fact that taxpayer money is effectively being used to compensate a private entity for non- performance is outrageous and deeply disturbing.It also notes that it makes a mockery of the governments stated goal of ensuring fiscal responsibility, the group said. It argues that spending billions of rands on a system that caters for a minority, and which pays vast amounts of public money to a private entity, is neither responsible nor prudent. In 2021 the Gautrain Management Agency (GMA), through funding from the Gauteng Provincial Government, paid the Bombela Concession Company (a privately-owned entity) a patronage guarantee of R2 billion. In 2020, the patronage guarantee paid to Bombela was R1.9 billion. Since 2013, Gauteng taxpayers have funded the shortfall of riders on the Gautrain by close on R13 billion, the group said. And, because of the built-in insurance for poor performance through the patronage guarantee, less money is available in Gauteng for transport projects which can cater for the majority of citizens who do not have access to the Gautrain. The fact remains that the Gautrain serves people who already have transport options the large parking infrastructure at Gautrain stations attests to this. This, along with a raft of other issues, is detailed in the submission we made last year. Sadly, we have received no feedback on our concerns, and it appears the MEC has disregarded the input of civil society on a matter which has huge financial implications for all citizens of the province. The AA said it will write to the Treasury, the Department of Transport and parliament to seek clarity on the planned funding for the extensions.There is no justifiable reason why the Gautrain service should be extended, and we noted such in our submission. We have had no formal feedback to our concerns, and it is perhaps now time that national government and parliament hold the Gauteng Provincial Government, the MEC and the GMA accountable for spending billions of rands of taxpayer money on what it is, essentially, a vanity project of the province and not a sustainable public transport solution, Source:https://businesstech.co.za/news/government/592910/why-the-new- gautrain-route- must-be-scrapped-aa/ Accessed 15 June 2022. Question 1 1.1 Transportation can play a vital role in all spheres of the economy. Based on the article above, critically discuss on how did the Gautrain operation impact the economy in which it operates in? Further research is encouraged (25 marks).
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