SAVANNA CITY Gauteng’s largest
privately initiated
development
Background
information to the
Premier
1.Background
• The project was initiated in 2007 and the Farm Doornkuil was
purchased.
• The Housing Impact Fund of South Africa (HIFSA), managed by
Old Mutual, was looking for housing opportunities to meet its
Financial Charter obligations
• HIFSA is a R9BN fund created by Old Mutual, DBSA and GEPF
• Basil Read after the successful implementation of Cosmo City was
looking for new opportunities.
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1. Background cont.
• The property is approx.1400 ha, located in Midvaal Local Municipality, next to
Orange Farm and Lakeside
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2. Scope of the development
• 18 399 housing opportunities:
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5517 Fully subsidised units
5518 FLISP
4729 Bonded
2635 Residential 3
16 Schools
400 ha conservation area
Public open spaces
Clinics, Churches and other social facilities
Commercial & retail opportunities
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3. Project Concept
• All services and facilities easily accessible (walking &
public transport)
• North-south spine linking all economic & social facilities
has been provided
• Direct link to Lakeside, Orange Farm and surrounding
agricultural areas
• Open spaces located close to place of residence
• Various income levels mixed
• Economic nodes provided at various strategic locations
• Project to uplift surrounding low incomes areas,
provide higher income development
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4. Spatial relevance
• The project is indicated as a
neighbourhood node in the
MLM SDF
• Provide goods & services
conveniently close to where
communities currently
reside
• To create a focus for more
residential areas within the
urban development
boundary
• SC is one of the core areas
in MLM
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5. Contribution to the Region
Savanna City will :
• Provide 14 new Schools: Need in the region by 2014: approx. 200 new
classrooms
• Contribute to population growth in District
• MLM economy not generating enough employment opportunities, SC
will assist reducing employment
• Provide improved services
• Increased revenue
• Benefit surrounding areas
• Prevent informal settlement development
• Stimulate increased demand for goods & services
• Create work experiences & develop skills which
will lead to higher level of human capital
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6. National relevance (NDP – 2030)
Housing
Transport
Sanitation,
water,
electricity
Education &
skills
Clean & safe
environment
Employment
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7. Project Constraints
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Limited bulk services available & funding
Urban Management challenges
Cross-boundary services issues (CoJ, Emfuleni, MLM)
Project delays and impact on cost and escalation (2007 initiated and
Aug 2013 signed service agreements – 6 yrs later)
Community expectations
Additional funding requirements from investors (HIFSA)
Limited control by Developer on the provisioning of the sanitation
transportation & treatment (Emfuleni & Randwater)
Delivery of an affordable housing project
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8. Project Opportunity
• Project impact to reach far beyond the current MLM (Orange Farm
in CoJ and Emfuleni (sewer line)
• Project will open development opportunity towards Orange Farm and
the R82
• Bulk services for the development (sewer line) to open other areas
for development and deal with existing services challenges
• Private sector to provide over 5000 fully subsidised housing
opportunities (free land) & over 5000 FLISP housing opportunities
• Project to provide over 54 000 employment opportunities during
construction and 12 000 post construction
• Skills & SMME Development
• Building capacity at municipal level
• Opportunity to flagship & pilot new approach
between government & private sector
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9. Financial Rationale
• Fully subsidised & FLISP housing to attract government support in terms of
bulk funding
• 70% of the development within the affordable housing bracket – grant funding
to cover 70% of the bulk service cost within the development
• 100% DoE bulk funding
• DoE funding for electrical connections (fully subsidised units) only avalaible
once development 80% complete - Problematic
• DWAF: Funding for the sewer line & upgrading of the Sebokeng Works
• Gauteng Department of Human Settlements to provide fully subsidised housing
funding and FLISP subsidies (agreement already signed)
• Developer to provide “free” land for subsidised housing
• FLISP policy problematic – current R300 000 incl. VAT package
• Developer to contribute up to R35M to MLM for Urban Management
• Developer to pay bulk service contribution towards
new sewer line
• Developer to carry 30% of bulk service costs
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10. Current status
• All agreements are in place
• Await final confirmation of the total bulk services grant funding from
Province and National.
• Site Establishment started in Sept 13
• Nursury on site with over 23 000 trees for the development
• Submissions made to DoE and Gauteng Fund for the first 3 schools,
await confirmation for schools to be opened 2015
• Development dependant on the upgrading of the Sebokeng Sewer
Works (once the development reach beyond 4000 units) and the
construction of the sewer line by Emfuleni.
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11. Critical success factors going forward
• 70% grant funding for the bulk services – Project investors require
firm commitments for entire project (year 1 to 9):
 Letter from Province – before construction start (Investment
committee meet Nov 2013)
 Funding from Province to Developer
 Signed agreements for bulk funding
 Gazetting of bulk funding
• Funding to construct the sewer line – to start 2014 – Discuss with
Emfuleni Local Municipality – to meet SC timelines
• The Upgraded Sebokeng Sewer works – to also meet SC timelines
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11. Way-forward & programming
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Site establishment: Sept 2013
Construction start: Oct 2013 - servicing
Launch of project: Nov 2013
Top structure construction: Mar 2014
Bulk funding – Provincial Commitment: 1 Oct 2013
Bulk funding – Overall Commitment: Feb 2014 Gazetting
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Contact details
Davina Piek
071 605 7249 / 071 854 2346
dpiek@basilread.brsm.co.za
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