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Gautrain cost overruns remain unresolved

Johannesburg - The Gauteng Management Agency confirmed on Thursday that it had not reached a resolution with contractors on extra costs incurred while building the Gautrain, less than three months before the project ends.

The agency is overseeing construction of the Gautrain on behalf of the Gauteng provincial government.

Murray & Roberts and other partners of the Bombela Concession Company forked out additional money on the project, due to delays from land handovers, high input costs and tough geological conditions.

Bombela also includes RATP Development and Strategic Partners Group (SPG).

In its full-year financial results to June 2010, Murray & Roberts reported that it recognised a charge of R619m following a review of the estimated cost to completion of the infrastructure works for the Gautrain.

This included the additional cost of delivering the first phase in time for the Soccer World Cup.

The construction group has vowed to try to recover the extra costs.

Barbara Jensen, spokesperson for the agency said on Thursday that no resolution on the matter had been reached.

Jensen said the project was still within its original budget, noting that R25.2bn would have been spent on completion of the Gautrain.

She said the Gautrain would be operational in less than three months.

"We are working hard to have the full system operational by the beginning of July," Jensen said.

Bombela said it was working on completing the project at the end of June.

The remaining sections of Sandton station required for the Phase Two operations were completed during March, the company said.

The Phase Two works were well advanced, with those between Rosebank Station and Pretoria Station, including all testing and commissioning activities, being substantially completed during March, it said.

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