Gautrain partners take multi-million rand hit from drop in demand
The Gauteng Provincial Government and Bombela Concession Company (BBC) will both take multi-million rand ‘hits’ because of low commuter patronage on the Gautrain caused by the Covid-19 lockdown.
JSE-listed Murray & Roberts (M&R) has a 50% stake in the BCC, which holds the 15-year concession for operating and maintaining the Gautrain.
M&R group investor and media executive Ed Jardim confirmed on Tuesday the group will take a financial hit because of low patronage. He said the BCC carries the risk on actual revenue up to a certain level, and from this level up to the guaranteed level, the revenue gap is covered by the Gautrain Management Agency’s [GMA] ‘patronage guarantee’.
Jardim added that under the lockdown restrictions, ridership is down significantly from pre-lockdown levels “to the extent that actual revenue is below the level from which the patronage guarantee applies.”
“This shortfall between actual revenue and the level from which the patronage guarantee applies is carried by BCC,” he said. “Unfortunately, we are in a closed period and cannot provide any financial detail. Our results are out on August 26, where we will provide detail on this matter.”
However, GMA CEO William Dachs said the province “paid R92 million more than budgeted for the patronage guarantee in the first quarter of the 2020/21 financial year and “Bombela lost approximately R171 million in revenue.”
Read more article on Moneyweb News