THE cost of the Gautrain Rapid Rail Link has shot up by R300m because of a spike in the country’s inflation in the past couple of years, says the Gauteng Management Agency, which is tasked with implementing the multibillion-rand rail project.

Jack van der Merwe, CEO for the agency, said yesterday the Gautrain project was exposed to escalation costs, which were linked to the consumer price index.

In terms of the escalation commitment, he said the provincial government had to pitch in to cover the shortfall. Van der Merwe said the increase in inflation had resulted in the costs going up by R300m over 30 months.

He said the agency was “worried” about the escalation as the provincial government has to cough up to cover it.

On the currency risk, Van der Merwe said the government had put in place protection against foreign exchange volatility. He said the Gautrain

Qedani Mahlangu, Gauteng local government MEC and member of the Gautrain political committee, said yesterday the project had created 11700 direct jobs and 63200 indirect and induced jobs.