The opposition of the South African Institute of Black Property Practitioners (Saibpp) to the backing by President Cyril Ramaphosa and national government of the multi-billion-rand Mooikloof Mega City housing development in Pretoria has nothing to do with entitlement, according to the president of the organisation Tholo Makhaola.
“Some are saying that our outcry is about a sense of entitlement, claiming that we just want a piece of the pie – a piece of this mega project … This is simply not the case. The fact is that there is a serious lack of transformation in the property sector,” he tells Moneyweb.
“We don’t want black people to continue to be relegated to just being consumers of such projects or construction workers; but we want black businesses to benefit from the value chain too. As Saibpp, we have an issue with the Presidency and national government supporting such a project, which doesn’t seem to have measurable BEE [Black Economic Empowerment] transformation targets linked to it,” he adds.
JSE-listed Balwin Properties is behind the Mooikloof Mega City development, which will see some 50 000 inclusionary housing units being built on privately-owned land east of Pretoria over the next 10 to 15 years. The project was officially launched by Ramaphosa and other senior government officials, together with Balwin CEO Steve Brookes, on Sunday.
Empowerment components lacking
Makhaola says while he understands that the project is driven by private sector corporate Balwin Properties, the fact that the group is JSE-listed and government is supporting the development with R1.4 billion in bulk infrastructure should have meant there were more stringent empowerment components.
With Mooikloof Mega City included as part of government’s Sustainable Infrastructure Development System (Sids) targeted list of projects, he reiterated calls by Saibpp that all companies participating in the Sids programme must be able to produce at least a Level 2 Broad-based BEE (B-BBEE) certificate.
“We want to see meaningful transformation. If companies participating in the Sids programme don’t have a Level 2 rating, such companies need to demonstrate how they intend to partner with or undertake a joint venture [with an empowered group] to ensure meaningful economic and skills transfer during and after the project,” he says.
Other empowerment features Saibpp wants included in the Sids programme include:
- Participating companies committing to procuring 40% of all materials and professional services from South African black- and women-owned companies; and
- That granting of approvals and development rights by local authorities must be contingent on the above conditions being met as well as on participating companies demonstrating a fully transformed professional service provider base and company structure.
Balwin Properties, South Africa’s largest sectional-title residential developer, is currently a “non-compliant contributor to B-BBEE” in terms of its latest BEE certificate.
However, its black ownership is reflected as being 13.14%, of which 6.15% is owned by black women.
“If one looks at property companies like Balwin, most are white-owned and managed, with most of their professional team and value chain also being white,” says Makhaola.
Transformation ‘frustratingly slow’
“We agree with the Property Sector Charter Council [PSCC] that transformation in the sector is frustratingly slow. Property companies are not sticking to their own BEE targets and there are currently no punitive measures against these companies,” he notes.
PSCC CEO Portia Tau-Sekati says she supports Saibpp’s call for mega projects endorsed by government, such as Mooikloof Mega City, to have BEE transformation targets.
“Transformation is not happening fast enough in the property industry … Major investments, job creation and housing are very important, but I believe we still can find a balance by also making sure such projects include a transformation plan,” she adds.
“This is not just about Balwin Properties, however, as far as I know, the group is not compliant in terms of the Property Sector Charter … The residential property sector, including estate agencies, is performing worse than the commercial and listed property sectors when it comes to transformation,” says Tau-Sekati.
Listen to Nompu Siziba’s interview with Tholo Makhaola: