Mr Gee is correct it has a chain. The 'tensioner issue that some refer to is that the tensioner is both spring and hydraulic in its design, but it has no ratcheting system so it can go back as well as forwards. A replacement comes as part of the kit. I have just changed the chain on my 1.4 Comfortline 118ts CAVD (look up ''notorious CAVD'' post).
A chain is more reliable than a belt for obvious reasons and on this particular series of engines VW do not consider it to be a normal part of the servicing schedule. i.e. they are not supposed to be replaced at all. That said, the one i replaced was about 8mm longer than then new one and the tensioner was in far better condition. If you are pulling the engine apart anyway, it's be rude to not splash the $250 for the kit, but in the normal run of things you shouldn't need to replace it.
I had a bit of a mare trying to source the kit as everyone I spoke to (including a muppet at VW) kept telling me it was a belt and not a chain. There is also often confusion with the supercharger belt as well.
Good luck.
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