The Second Cape Photographic Catalog (CPC2) contains 276,131 stars covering the entire Southern Hemisphere in a 4-fold overlap pattern. Its mean epoch is 1968, which makes it a key catalog for proper motions. A new reduction of the 5687 plates using on average 40 Hipparcos stars per plate has resulted in a vastly improved catalog with a positional accuracy of about 40 mas (median value) per coordinate, which comes very close to the measuring precision. In particular, for the first time systematic errors depending on magnitude and color can be solved unambiguously and have been removed from the catalog. In combination with the Tycho Catalogue (mean epoch 1991.25) and the upcoming U.S. Naval Observatory CCD Astrograph Catalog (UCAC) project proper motions better than 2 mas/yr can be obtained. This will lead to a vastly improved reference star catalog in the Southern Hemisphere for the final Astrographic Catalogue (AC) reductions, which will then provide propermotions for millions of stars when combined with new epoch data. These datathen will allow an uncompromised reduction of the southern Schmidt surveys on the International Celestial Reference System (ICRS).