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Infrastructure a key part of economic recovery plan – Ramaphosa

President launches multi-billion-rand Mooikloof Mega City inclusionary housing development in Pretoria.
Balwin Properties CEO Steve Brookes gave Ramaphosa as well as Human Settlements Minister Lindiwe Sisulu and Minister of Public Works and Infrastructure Patricia De Lille a tour of the site. Image: Siyabulela Duda, GCIS

South Africa’s much-anticipated Covid-19 economic recovery plan will be unveiled soon, and infrastructure will play a “key role” in unlocking investment and getting the economy out of the hole it finds itself in.

That’s the word from President Cyril Ramaphosa, who was speaking on Sunday at the launch of JSE-listed Balwin Properties’ multi-billion-rand Mooikloof Mega City development, east of Pretoria. The president did not however give any details on the plan.

“We need to unlock energy in the economy,” he said, citing the new inclusionary housing development as an example of mega infrastructure projects that can help kickstart the country’s economic growth.

A nod to the developer

Light-heartedly dubbing the development “Steve Brookes City” – after the CEO of Balwin Properties – Ramaphosa called for infrastructure to be seriously built up in the country in a more “synchronised manner” together with the private sector.

Read: State’s infrastructure programme criticised for lacking details

“Infrastructure [investment] is a key part of the economic recovery plan of the country post Covid-19. It’s no longer about talk … to make our dreams come true, we must move ahead with implementation.

“As I’ve said before, we must ‘Khawuleza’ or hurry up in meeting our people’s needs,” said Ramaphosa.

He added that he is excited to see the Mooikloof Mega City development now moving ahead with some 50 000 sectional title units planned, making it one of the largest developments of residential inclusionary housing in the country.

“Once completed, the Mooikloof Mega City may end up becoming the world’s largest sectional [title] property development, with land also earmarked for schools, shops and offices,” he added.

The president said that the overall Mooikloof Integrated Development has a total project value of over R84 billion and is one of the 62 Strategic Integrated Projects (SIPs) that were gazetted at the end of July.

Balwin’s residential side of the development is touted to be valued at between R30 billion and R44 billion, and will be developed in phases over several years.

The government, through its proposed more than R350 billion infrastructure fund [latest exact figure to be revealed in its economic recovery plan], is investing some R1.4 billion in bulk infrastructure to unlock the Mooikloof development. This includes the expansion of the Garsfontein provincial road, which runs adjacent to the site.

Read: SA plans R357bn infrastructure fund, ANC says

Ramaphosa noted that the Mooikloof development will make a big contribution to inclusionary housing in South Africa, helping to address spatial integration.

Housing for the ‘missing middle’

“This housing development addresses what may be referred to as the ‘missing middle’ – people who earn too much to qualify for fully subsidised housing but who don’t earn enough to afford debt-financed housing in areas of their choice … But by far the most important aspect of this catalytic project is its contribution to inclusionary housing development,” he said.

“We continue to feel the effects of apartheid spatial design in what may be termed the 40/40/40 principle,” said Ramaphosa.

“This means that most people are housed 40 kilometres from employment opportunities, as a result, they spend over 40 minutes travelling to and from work, and spend over 40% of their incomes on transport expenses. In many cases those affected are the poor who live in 40m2 houses,” he added.

Ramaphosa said that the Department of Human Settlements, through the Housing Development Agency, will assist in making it possible for more low-income households to benefit from the Mooikloof development.

Homeowner assistance

“Potential homeowners will also be able to apply for assistance from government’s Finance Linked Individual Subsidy Programme,” he noted.

Ramaphosa hailed the fact that the project is expected to create around 41 000 jobs.

“The success of any future mega housing development rests with public-private sector collaboration. Private sector resources and expertise will aid government’s efforts to meet the housing demand. The public sector can incentivise further investment by providing the necessary bulk infrastructure to enable development,” he said.

“The reality is that the fiscus cannot on its own support the rising housing demand in the country.

“Covid-19 has only worsened an already dire situation. We will be looking at how best to leverage private sector resources and skills to help government deliver its mandate to provide decent housing to our people. Mooikloof is an excellent example [of] how public-private sector interests can be aligned and work for mutual benefit,” he added.

Listen/Podcast: Balwin’s Crystal Lagoons coup

Speaking at Sunday’s launch, Brookes said Balwin has had “incredible support” from government, in particular from Dr Kgosientso Ramokgopa, who heads up the investment and infrastructure office in the presidency. Ramokgopa is a former mayor of the City of Tshwane.

“We will initially develop, construct and deliver 16 000 green model residential apartments as part of the Mooikloof development, which will be valued at around R10 billion,” he told Moneyweb.

“The first portion will consist of approximately 2 500 apartments with prices ranging from R499 000 to R799 000, which is directly targeted at the gap housing market,” Brookes said.

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I have my doubts about this development. Too many buzz words and stuff like that.

Fully agree Chris — Major squatter camp coming in the area as well — observe in 3 years — methinks Balwin will be bald by then

The existing property owners in the area must be thrilled to bits.

Another Cyril Wakanda delusion moment. Watch this space for the 2 year anniversary reunion of blaming excuses and corruption.

Sounds like the business model is to rely on ovt grant monies to make housing work.

Anything that the ANC touches becomes highly political and you end up with a massive wastage, corruption and destruction of growth, so you have to get the private sector to do it.

If there is the efficient and effective allocation of capital, tendering based on quality and price, and correct implementation of projects then PPP’s could work. But the moment this is messed with, through corruption, BEE or both, you get the opposite.

The best structural reform SA could undertake right now is move away from BEE or ring fence strategic infrastructure projects from the ravages of BEE and corruption.

Great idea and much needed.

I just don’t have a warm feeling. The 2 top brass sold or transferred their shareholding worth about half of the market cap into PRIVATE holding companies. What are they trying to hide?

This is the ANC government and chances are there is a corrupt relationship here.

I would have thought ‘get the basics right first’ would be top of the agenda. Grandiose plans wont fix the rot and collapse of SOE’s, Gov. and municipal infrastructure and services.
When I look around me, all I see is decaying infrastructure and overstaffed goverment offices with few actually working.

The problem here is that levies in sectional title is very high. The person that can only afford a 500 to 900 thousand rand property is not the type of person that can afford a R1500.00 and more levy. Forming a working Body Corporate will also be a problem.

True but I think that is more a problem of affordability. NCA says banks must grant me (as a worker) a bond where I pay 30% of my gross at most per month. As the buyer, I need to be smart enough to actually go for something that will leave me at (30% of gross)-R1500(or what ever levies are).

The late Sectional Title guru Tertius Maree often ranted against the latest version of the STSMA regulations, which makes it a cumbersome and virtually impossible task to act against levy defaulters. Which causes the paying owners to have to pick up the default.Would not touch a complex with a barge pole where buyers already need government assistance just to buy low cost housing.

Sounds good.

If this is the future (private/public) partnerships, it’s a step in the right direction. Balwin gets things done (De Velde, Richwood amongst other good projects ) and ensure quality is guaranteed.

No brothers involved.

President is pressing the right buttons. The brothers have squandered their opportunity with PeePeeU, R1bn Free State housing project and many others.

Who is going to do the work?

In the old days, you could hire a convict. Imagine hiring Ace to push a wheelbarrow. Sigh …

great plan for looting

Please Mr President,
Can we have more of these projects?
And while we at it, please launch a finance scheme to ensure our people are ready to buy these dwellings. I assume no transfer duties will be payable and that banks will look kindly to provide finance for our people.

The President is killing it!!
– Arresting the gangsters within ANC
– This housing project
– Management of COVID-19
– Land Restitution iniatives.

You know that you are in deep trouble as a citizen when people ask the president for stuff. When citizens turn to the president to alleviate poverty, create jobs, to build houses, to redistribute land, to arrest gangsters and protect them from a disease, then you know for certain that you are not governed by the rule of law, but rather by the rule of man. This situation proves that SA is a one-party state where a demagogue controls the entire economy through the tyranny of the masses.

When the president has the power to determine economic policy, who gets contracts and who gets to partner with the government, then the free market principles have been discarded to benefit socialist looting of the common resource. This is the engineering of society by a Central Planning body, and the public-private partnership is merely the lipstick on the pig. The partnership puts the veneer of capitalism on the rotting underlying structure of socialism. It may appear all shiny and new to the untrained eye and the gullible onlooker, but the underlying rot will surface in no time.

Mega Project DO NOT WORK in South Africa
Example: Kusile; Medupi; Gautrain et cetera…

A study by Bent Flyvbjerg from the Said Business School at Oxford University found that nine out of ten megaprojects (budgeted at $1 billion or more) go over budget and take longer to complete especially those which are tendered for 24 month duration or more

I wish all projects great success, as I work in the industry all over the world, I been recruited to contracts and construction businesses which have failed or are about to. Most of the time from my professional view is that there tends to be a lot of Government Hype, followed by Opportunistic Unstable Contractors, then as the contract starts kicks off reality sinks in and multiple failures occur all at once.

Unfortunately with anti-business labour laws added to corruption and a skills depleted Construction Industry in SA, anything project above R100 million will have delays and cost over runs starting at 25% and increase at the expense of the tax payer.

The solutions:
Specialist Consultant Companies to be employed who will asses each Provinces Requirements, Smaller Projects Less than R100 mil (50 000 projects, 10 000 per year), Short Duration 12 Month or less, Community Focused (70%:30%) Labour, Adult Education 2% Project Value for local skills development, Merit Based Employment, Very Flexible Labour Law, Block Chained Costing Records, Local Supply Chain (70%:30%), Open Public Tendering.

There is a R10 Trillion Investment Employment Gap, having only a few projects start off will not only be a drop in the ocean but will also be swamped with labour chaos and corruption.

All megaprojects. Its not South Africa problem.

NO!! A key part of economic recovery is LESS GOVERNMENT INTERFERENCE into the private sector! (whom is hamstrung by govt red tape)

We need LESS of the communist inspired ‘central command’ style regime. (…how about creating a more business friendly environment to operate in??)

That’s the basics…

So, this project is aimed at civil servants (not that others can’t get in). But aiming a 50 000 apt housing project at govt workers…me thinks that the govt wage bill is used as an unique selling point (the rentals will be paid) but me thinks the govt wage bill wont be slashed.

Once completed, the apartments would sell between R500,000 and R800,000, focusing on state employees (https://ewn.co.za/2020/10/04/new-city-ramaphosa-launches-r30bn-mooikloof-mega-residential-city-project)

Pres CR wants to build a smart city but the ANC cannot even run a small municipality, of which there about a hundred examples.

Pres CR wants public / private partnerships but refuse Covid relief to white business? How does that work?

The economists and actuaries predicted the demise of the economy in March already, yet the recovery plan is only now being drawn up?

Noooo ….. uprooting your corrupt colleagues is. There has always been plenty of money but it all vanished somewhere.

Can we also get the Cape Town Foreshore flyovers finished now, please?

Ah good old mass housing, a solution that was tried many times before and failed when the happy new owners/residents find every reason not too pay.

Good luck Balwin. History tends to repeat itself.

End of comments.

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