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While Johannesburg’s Midrand area has undergone significant development over the last decade, there is a true game-changer on the horizon – the Gauteng Central mega city. Namhle Sambudla, of master developer Bayete Capital, unpacks the social and economic implications of mega projects like this.

MEGA PROJECTS DRIVE

SUSTAINABLE DEVELOPMENT

What are mega city projects and why are they important in the South African context?

In South Africa, the Gauteng Partnership Fund uses the term ‘mega projects’ for human settlements developments that consist of more than 10 000 residential units.

Gauteng Premier David Makhura has succinctly described their importance, saying, “The goal of mega projects is to achieve diversity in human settlements by emphasising mixed-income, high-density human settlements, which place an emphasis on social and economic inclusion, as well as promoting social justice.” In the case of mega city projects, as much as it may start off as a development with 10 000 residential units, this extends to the inclusion of all the amenities these settlements’ residents may need, making for a legitimate mixed-use development. Integration is at the heart of the concept in South Africa – not just integrating land uses but, more importantly, socially integrating

Namhle Sambudla, Director: Development Management, Bayete Capital

people with different income levels and from different backgrounds to provide equitable opportunities.

Who benefits from the establishment of such large-scale developments, and how?

A huge number of people benefit through the economic and social impacts of developments on this scale. On the one hand, a need for integrated human settlements is being met, which brings with it the development of roads, as well as electrical, water and related infrastructure. Coupled to this are the top structures in terms of housing, commercial, retail, industrial, hospitality and other developments. These investments cultivate economic benefits for all concerned – before, during and after construction, over the short, medium and long term. It’s not the case that only the private and public sectors benefit – indeed, the social impact is significant. Imagine the financial and social implications for someone who has previously lived on the outskirts, far from services and amenities. Now, they would be living in a development that – within its bounds – offers everything from housing, schools, shopping and transportation to clinics, police stations and more. All this in a dignified environment.

Considering low-income earners in South Africa spend, on average, around 40% of their income on transport, this would help to free up disposable income – it’s truly life-changing on many levels. Further, the employment opportunities available during the entire life cycle of the development are extensive and desperately needed in the context of our country’s high unemployment rate.

How do other investors and private sector players get involved in projects like these?

This is a question we get asked regularly! Timing is critical and it is important to understand the role that various private sector investors and developers wish to play in a development, as well as the terms and conditions of their participation. Managing expectations is important and the alignment of all parties is critical – everyone taking part needs to feel that they are participating equitably towards the end goal. Once the master developer – i.e. Bayete Capital, as the owner of the development land in the case of the Gauteng Central mega city project – has packaged the development and obtained all municipal and public sector approvals, along with initial funding availability, then we become open to approaches from external parties.

Where do the challenges lie in getting such large-scale projects off the ground?

We’re fortunate that there is a real willingness from government and local authorities to assist, so that eliminates one of the potential stumbling blocks. On the other hand, there is a general shortage of industry skills relating to the development of mega cities; however, Bayete Capital is blessed to have a team of highly experienced professionals within its structure. That said, there is no getting around the reality of developments of this nature being highly complex and requiring broad knowledge sets – especially from development management, funding and stakeholder engagement perspectives.

What role is Bayete Capital playing in the Gauteng Central mega city project?

Bayete Capital is the master developer, which means our development management team will be seeing the project through every step of the way – from conception to completion, and the post-construction phases. We have vast experience as development managers, urban designers, architects, project managers, quantity surveyors, town planners, multidisciplinary engineers, green development specialists and more.

How long is the Gauteng Central development expected to take?

We envisage a development horizon of 15 to 20 years, which will naturally entail a phased approach. The first phase, in terms of top structure delivery, will focus on the site’s 10 000 housing opportunities. As with many projects done at scale, there are numerous variables beyond our control that may impact on timing, such as the availability of services, rising interest rates, the effects of a declining economy, market demand, and more. Despite these variables, we are incredibly optimistic that we will unlock the project’s inherent potential to deliver positive change to people’s lives and the economy of the region.

Are international mega city models applicable to South Africa, or is there a local context that needs to be accounted for?

South Africa can obviously draw from that which is being undertaken abroad, as these models have been tried and tested. That said, our country has a unique history and it is within this context that integrated human settlements – in prime locations – need to be adapted to ensure the socio-economic inclusion of previously disadvantaged populations.

Any final thoughts?

Our Gauteng Central mega city project is a great starting point but one mega city is certainly not enough to change the fortunes of all of Johannesburg’s residents. We do hope, though, that it may serve as an example of the great things that can be done to move South Africa towards an equitable future. We live in a country that, like others, has its own dynamics and challenges. Government and the local authorities are doing good work in providing an enabling environment that needs to be utilised to achieve much-needed social and economic transformation and sustainable prosperity for all. Despite the slowdown in the economy, Bayete Capital remains optimistic, as the demand for integrated human settlements will continue to escalate. In the end, developments like this also significantly benefit the municipalities that enable them by creating additional revenue in terms of rates and taxes, as well as increases in property values.