First phase of Pretoria’s Salvokop precinct to be developed for R6.5bn

Project will be a catalyst to stimulate the beleagured construction industry.
Salvokop Precinct Development has the potential to create over 5 000 jobs during the construction of the first phase, Minister Patricia de Lille says. Image: Moneyweb

The construction industry is to receive a much-needed boost, with the first phase of the Salvokop Precinct Development in Pretoria to be developed as a public-private partnership (PPP), at an estimated cost of R6.5 billion.

Minister of Public Works and Infrastructure Patricia de Lille announced the initiative on Wednesday and indicated that the development has the potential to create more than 5 000 jobs during the construction of the first phase and the bulk infrastructure.

De Lille said the development will generate hope for the construction sector, which is currently in dire straits, and for communities.

“We look forward to the completion and delivery of this integrated development, that will contribute significantly to the economic stimulus and will be a catalyst to stimulate the construction sector in a very substantive way,” she said.

De Lille said consultation will continue next year with other cities, including the City of Cape Town, Buffalo City Municipality and the City of eThekwini, for similar precinct developments.

Webster Mfebe, CEO of the SA Forum of Civil Engineering Contractors (Safcec), said such investment in infrastructure will bring much-needed confidence to the already-depressed construction industry. The FNB/BER Building Confidence Index edged higher to 25 in 2019 Q4, after receding to a 20-year low of 22 in 2019 Q3.

Mfebe said it will also underscore the point Safcec has made in the past: that government has not sufficiently utilised the PPP model, which is the way to go because government does not have infinite resources due to the competing demands placed on the fiscus.

“This is a step in the right direction and I hope it will be handled well and in an open and transparent manner, as dictated to by Section 217 of the Constitution,” he said.

De Lille said the mixed-use development at Salvokop includes the head offices of an additional four government departments. These are the departments of correctional services, higher education and training, social development and its agencies (the SA Social Security Agency and National Development Agency), and home affairs.

The precinct is already home to Statistics SA’s 56 000m2 flagship head office, which was completed in 2016 at a cost of R1.4 billion.

De Lille said the total development opportunity in Salvokop involves a total of 524 000m2 at an estimated cost of R18 billion, which forms part of the broader City of Tshwane inner city regeneration programme.

“The precinct is one of five identified precincts located within the inner city, which will be a benchmarked precinct that will create a destination where citizens can live, work and play in a central location.  

“Through the precinct development plans, DPWI (Department of Public Works and Infrastructure) will achieve safe, accessible and environmentally-sustainable development. This development model will also reduce the lease costs for government office accommodation,” she said.

De Lille said the first phase is expected to lead to the contribution of an estimated R6.5 billion of blended financing between the government and private sector.

She said National Treasury is assisting the department with accessing government grants and her department will also be applying for funding from the President’s R100 billion Infrastructure Fund.

De Lille said the DPWI has already issued a tender for the provision of bulk and internal services and the contractor will be appointed by March next year, with construction in terms of this contract commencing in April and set to be completed in December 2022.

She said the provision of government office space will be distributed over about 360 000m2 on five erven, with the rest of the mixed-use precinct allowing for the development of 240 000m2 of commercial and residential bulk.

“With the support from National Treasury, the planned commercial and residential development component will attract private sector investment.

“All planning processes and preparation of work is aligned towards having the sites ready for construction by 2022. The offices will be ready for occupation by the government departments by 2025,” she said.

The second phase involves developing sites zoned for business and commercial activity.

De Lille said the design guidelines and development parameters were finalised in March this year and will be packaged to go out to the market for uptake by potential developers for use as hotels, retail stores and coffee shops.

Planning in collaboration with the National Department of Human Settlements and the City of Tshwane Housing Division for the third phase housing component has already commenced.

De Lille said the DPWI will work with the City of Tshwane and the Department of Human Settlements, which will be responsible for determining how many housing opportunities and the types of housing that can be delivered on the site for residential development.

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The role of Public Works is unclear today . Back in the 80’s, they were responsible for maintenance of Govt Buildings. Looking at the state of mortuaries and hospitals , it is clear that something has failed. Structure ? Management ?
There seems to be a huge confusion of who is responsible for what : Is it public works ? Is it provincial admin ? Is it municipalty ? The relevance of Public Works is questionable and having read this it is as clear as mud about what their role is going to be.
We are running out of time in SA and there is no better time than now to re-structure and clarify exactly what is required to fix this country . Please call the experts and not Mr Mantashe

I agree.
Dept of Public Works is the great mystery departmemt as to what rhey are actually reaponsible for. Or who they answer to.

Department of Public Perks…

That my friend is Transformation.

Here in Simon’s Town, the DPW owns all the Navy properties apparently and they are in a serious state of disrepair. Spend some money down here, please!

But hey! This looks like a “new government compound” with a few other tenants thrown in for luck. And “has the potential to create more than 5 000 jobs during the construction of the first phase and the bulk infrastructure” simply means temporary work really. The crux of the success will be if the floor space is profitably leased. The taxpayer is already funding the department rentals.

And hopefully … the “tender for the provision of bulk and internal services” will be closely monitored with severe penalty clauses so that this doesn’t end up like another Kuslie/Medupe bonus for ANC cadres.

Great for doing something at least.

I will watch with baited breath to see how the construction mafia gets involved.

It is worrying that government has never done anything to bring these crooks to book. Keep in mind work worth Billions have been stopped and abandoned due to this. Government think it is the contractors problem. Ask Sanral.

Will you invest in the construction sector with this unresolved?

So ja- R6.5 Billion ne !!

1. Bribes = R2 Billion
2. BEE puchases = R1.5 Billion
3. Construction Mafia surcharges = R1 Billion
4. Construction firm profit = R800 million

So the real money available to the project before anything is actually started will be R 1.2 Billion

Should be enough for about 500 shacks ne!!

This news is generally positive. The name SALVOKOP has a rich Afrikaner history dating since 1900’s.

Can I kindly request the developers to retain this proud Afrikaans name & use it as building-names for the upcoming office blocks, residential developments, please?

IF NOT….I will CURSE this development with huge cost overruns, and long delays!!

I hope they include their own electricity generation plant….

Amazing!! Does no one realise that a government does not earn money it only collects and spends. So our government has spent more than it earns hence the budget deficit. Nevertheless more money is to be spent on yet another project – who pays? Not the taxpayer because he is not sucked dry but rather the lenders to the government and at what price is the quid pro quo? Interest rates will soon go through the stratosphere as the risk increases. This is Socialism – it works fine until the money runs out!!

Hang on one second

Has anybody looked at what the scope is of government owned vacant premises before we build R6,500,000,000 new head offices????

First, sweat the assets you have!!!!!!

It would seem that fruitless expenditure is still the order of the day at the NPWD! Prior to committing any the funds and kicking off another series of State Capture Activities, viz. PPP’c etc., please inform the public as to the following, ie.:-
1. What happened to the planned and approved Government Corridor Development which stretched northwards from the Pretoria Railway Station down Paul Kruger Street through Church Square then left into Struben Street and proceded eastwards up to the Union Buildings – the planning was approved and funds have been expended, all to no avail!
2. Has Parliament given their blessings that item “1” above can now be thrown into the trashcan and who will be held responsible for the fruitless expenditure which has been incurred – Sean Phillips, et al?
3. Is there certainty as to the integrity of the proposed Salvokop site, viz. dolomite?
4. Was a social cost benefit analysis done regarding the feasibility of the propose Salvokop development?
5. Is the proposed site suitably accessible to the public and what impact will it have on traffic congestion, the poor, elderly and infirm.
6. Is there certainty as to Government policy going forward because national government has over the past 2 decades been instrumental in selling many of its buildings in Pretoria at prices far below market value to City Properties? It all seems to be totally uncoordinated just like Patricia’s working protocols of the past! Running around like a decapitated chicken would seem to represent the current modus operandi of the NPWD!

Instead of meaningful infrastructure projects, money is squandered on vanity projects like this!

End of comments.

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