Bayete Capital: Mega projects drive sustainable development

PLANNING FOR A PROSPEROUS FUTURE

Bayete Capital CEO Dr George Smith discusses the importance of spatial planning in transforming South Africa’s socio-economic landscape into one that is both equitable and geared for growth.

At the heart of spatial planning lies the belief that the places we make ultimately shape the way in which we live and how well we live. It is therefore critical that this discipline be guided by the key principles by which we seek to build our society, such as justice, equality and freedom,” states Smith.

Spatial planning is about more than simply identifying the mechanics of land use management – rather, it provides the framework that guides land-use management decisions. As a discipline, it considers the urban system as a whole, which is made up of a variety of interconnected complex parts competing with each other (for example, conservation versus development or pedestrian versus vehicular traffic). Key principles underpinning current spatial planning approaches in South Africa’s cities include connectivity, inclusion, sustainability, and the promotion of public and non-motorised transport.

Benefits of spatial planning

Spatial planning provides cities with a well-considered guideline for their growth and development. “It is always forward-looking and mediates between competing interests for land use and resources. It is further underpinned by public participation processes, which seek to gain consensus among all role players for a common vision. For this reason, spatial planning provides municipalities with a reliable framework to plan and allocate their resources,” Smith explains.

One of the key objectives of current spatial planning in South African cities is to redress the imbalances created by the apartheid city, notes Smith. This entailed either the exclusion of certain communities from the urban system or the housing of previously disadvantaged populations in ‘dormitory’ communities lacking in social and economic infrastructure. “To redress these imbalances, spatial planning policies actively promote the restructuring of the city to provide affordable residential accommodation in well-located nodes, and also promote the development of social and economic infrastructure in former township areas.” Spatial frameworks are also instrumental in guiding investment in infrastructure in these areas, Smith adds.

Decline and renewal

He describes the development of cities as a “history of invasion and succession”, explaining that, over time, certain areas naturally decline due to the expansion of cities in other areas. “These areas of decline then offer opportunities for lower-income earners to establish a foothold in the urban system before they are subjected to the forces of gentrification. This sees higher-income earners moving back into an area, accompanied by significant investment in upgrading.

“The process of decline and renewal is thus a key part of the urban system and, therefore, an important focus for spatial planning. Much of this focus in South African cities now concerns itself with the redevelopment of existing built forms, which is evident in the conversion of large areas of CBDs into residential accommodation or office space in suburban nodes into residential accommodation,” he explains.

The informal settlements challenge

South Africa also faces an ongoing challenge to spatial planning and service delivery in the form of mushrooming informal settlements, which are haphazardly laid out and poorly serviced with basic amenities.

This situation plays out across all of South

MUNICIPAL REVENUE ENHANCEMENT

Africa’s urban areas and the upgrading of informal settlements is a key municipal priority, which starts with the provision of basic services, such as communal toilet and water amenities. “Many informal settlements are also located on land that is not suitable for residential settlements due to factors such as flooding, existing services or geotechnical conditions,” Smith notes.

In such cases, municipalities provide alternative housing in nearby locations with the intention of relocating the entire settlement into these new housing areas. “In practice, these new developments usually fail to achieve total relocation due to a number of factors and these settlements grow again after time.”

In recent years, municipalities have shifted their focus, where possible, to the formalisation of informal settlements, focused on providing in situ upgrades. “This involves the recognition of the existing spatial patterns set up in formal settlements by formalising the inhabitants’ land rights to these areas as a first step and thereafter upgrading services with minimal relocations,” explains Smith.

He adds, “The continued existence of informal settlements is, however, ultimately a reflection of the housing shortage in South Africa and, as such, government is exploring a variety of mechanisms to increase the supply of accommodation at appropriate prices, including backyard dwelling policies and social housing incentives.”

This clearly illustrates the importance of ensuring appropriate spatial planning and land-use management going forward. As

Beyond its proven property investment and development expertise, Bayete’s professional services skill set extends into the area of municipal revenue enhancement.

“Our passion for municipal revenue and balance sheet enhancement has developed over time, from observing the dire need for increased funding to achieve service delivery – more specifically in the historically disadvantaged and marginalised areas born out of the apartheid era,” explains CEO Dr George Smith.

During the current period of economic decline, municipalities are faced with myriad challenges, not least of all being the growing demands placed on service delivery due to urbanisation and population growth. Of course, meeting these needs requires ever-increasing budgets and resources. In this regard, revenue collection can only go so far, particularly in light of South Africa’s unemployment rate and the economic challenges exacerbated by the ongoing Covid-19 pandemic.

“The economic downturn has impacted on revenues. It is not an easy task to meet a budget requirement in an economic environment where revenues being generated are not what they used to be,” Smith notes.

Therefore, revenue loss reduction is of utmost importance in these times, and the need for innovation in terms of stimulating the local economy is more evident than ever.

Revenue enhancement is key to improving this situation and requires collaboration between all stakeholders concerned, insists Smith. “There is always a means to improve, but we need to acknowledge that we all have a role to play and contribute to a solution.”

Speaking of solutions, Smith says, “One thing that we believe is important to remember when embarking on a revenue enhancement process is that it cannot take a ‘business as usual’ approach. This is the starting point and is imperative to the success of the initiative.”

As municipalities are highly regulated in terms of the MFMA and other legislation, viable solutions must comply with the respective regulations. In this context, Bayete has devised a municipal revenue enhancement solution that combines innovation with exclusive rights to patents and systems developed and registered in South Africa.

“Revenue enhancement in both the public and private sector – leveraging innovation and intellectual property – is something that should be a priority. Not only does innovation and intellectual property promote entrepreneurship and significantly impact on job creation and achieving social and economic transformation but additional revenues earned stimulate the economy, create jobs and contribute towards the well-being and advancement of all,” Smith explains.

“With all the initiatives that have, and are being, embarked upon to achieve the required revenue enhancement results, what is missing to enhance the revenue even further? What innovation and intellectual property can be drawn upon to achieve the required additional revenues for the municipalities that are otherwise being ‘lost’ or ‘untapped’? asks Smith.

These are questions Bayete Capital’s proprietary solution can help to answer.

the genesis of an informal settlement is usually the result of people seeking living space near economic opportunities, it is vital to develop human settlements that cater to the needs of low-income earners and the unemployed.

Bayete’s involvement

While spatial planning is not the core of Bayete’s business, the company has planned a significant number of largescale projects across South Africa. “All of these projects incorporate developments featuring the full spectrum of development categories, such as social and affordable housing, market-related housing, and mixed-use developments. The latter comprise retail, commercial, hospitality, social facilities, transportation and the like,” Smith concludes.