Gautrain contract up for grabs as court ruling favours Bombela

The contract to run the higher-speed express commuter rail system, Gautrain, is being put up for grabs this year by the Gauteng Roads and Transport Department.

Details of the contract were revealed in a Gauteng High Court, Johannesburg, case involving Bombela Operating Company, its subsidiary Bombela Concession Company, and Nedbank over a guarantee from the bank.

In terms of the court action initiated by the Bombela Operating Company (BOC), Nedbank issued such a guarantee in favour of Bombela Concession Company (BCC), the concessionaire, in the amount of R205,934,250.39, to secure certain of its performance-related obligations in terms of the Gautrain operating contract.

The contract stated that Nedbank would be obliged to pay over the money to the concessionaire if the concessionaire is able to demonstrate that it qualifies for its entitlement.

There were two contracts that were in focus in the matter – the operator performance contract and the bond guarantee contract.

Bombela Operating Company issued a default notice in November last year after Bombela Concession Company placed its parent firm on notice to rectify the default.

According to court papers, Bombela Concession Company failed to do so in the time permitted; therefore, Bombela Operating Company called up payment of the guarantee.

Bombela Operating Company had been waiting for a handing over report as its operator contract will end in March this year, and the contract will again be put out to tender by the Gauteng Roads and Transport Department.

Last week, Judge Shaida Mahomed found that Bombela Operating Company’s argument and/or reasoning and linking of the two contracts, appeared to denude a “guarantee” of its very essence and value in commercial contracts.

“It is noteworthy that the applicant (Bombela Operating Company) is a ‘sole operator’ and the precondition of a guarantee to secure the concessionaire’s interest is logical, for as long as the guarantee is given its full force and effect in commercial transactions,” reads the ruling.

Judge Mahomed ordered that Nedbank pay Bombela Concession Company nearly R206m by Friday, January 9, 2026.

Nedbank issued such a guarantee in favour of Bombela Concession Company, the concessionaire, in the amount of R206m, to secure certain of Bombela Operating Company’s performance-related obligations in terms of the operating contract.

“Nedbank would be obliged to pay over those monies to the concessionaire (Bombela Concession Company) if the concessionaire is able to demonstrate that it qualifies for its entitlement,” Judge Mahomed explained.

Bombela Operating Company sought to interdict Nedbank from paying out the money, as it claims the bond was not a standard bond but a conditional bond.

The bank added that the preconditions to payment had not been met, and therefore it was not obliged to pay the money over.

Lastly, Nedbank claimed Bombela Concession Company acted fraudulently in that, on the facts, it could not have believed that all of the conditions for payment had been met, notwithstanding that it called up the bond.

The story will be updated when Gautrain spokesperson Albi Modise comments.

loyiso.sidimba@inl.co.za