Com­ple­tion on the cards for Cape Town’s roads to nowhere The City of Cape Town wants to part­ner with the pri­vate sec­tor to find a so­lu­tion for the three aban­doned high­ways lead­ing into the in­ner city, which have been an eye­sore for close to five decades.

Finweek English Edition - - THE WEEK - Ed­i­to­rial@fin­week.co.za

prospec­tive in­vestors, or a con­sor­tium of com­pa­nies, will soon have the op­por­tu­nity to bid to be part of a new de­vel­op­ment that will help re­solve the traf­fic con­ges­tion and pro­vide af­ford­able hous­ing in close prox­im­ity to the Cape Town city cen­tre. Cape Town mayor Pa­tri­cia de Lille an­nounced on Tues­day, 21 June that the City would make avail­able 6ha of its own land to a suc­cess­ful bid­der in the pri­vate sec­tor in ex­change for the com­ple­tion or re­design of the un­fin­ished high­ways as well as a hous­ing scheme. The area for hous­ing stretches from the Cape Town In­ter­na­tional Con­ven­tion Cen­tre to the un­fin­ished bridges.

Con­struc­tion of the high­ways on the western, cen­tral and east­ern side of Cape Town’s fore­shore started in the 1970s, but the project was aban­doned af­ter a while, mainly due to a lack of funds and be­cause traf­fic con­ges­tion at the time was not nearly as se­vere, which didn’t war­rant fur­ther in­vest­ment.

Fast-for­ward 46 years and the sit­u­a­tion is com­pletely dif­fer­ent – Cape Town has sur­passed Jo­han­nes­burg as the most con­gested city in South Africa and it ranked 47th in the world as far as traf­fic is con­cerned.

“When I be­came mayor I pledged to do some­thing about the un­fin­ished high­ways,” De Lille said. “Not only are they use­less, other than for film shoots, they are also pre­vent­ing the de­vel­op­ment of prime City-owned land that is locked in un­der and be­tween the ex­ist­ing high­ways and the har­bour.”

The City imag­ines the new de­vel­op­ment would lever­age the City-owned land be­neath the un­fin­ished bridges and part of the con­di­tions will be that it in­cludes the funds to com­plete the un­fin­ished bridges, al­le­vi­ate con­ges­tion and pro­vide af­ford­able hous­ing.

A num­ber of ur­ban plan­ners are sug­gest­ing that hous­ing projects should in­volve the de­vel­op­ment of un­used ur­ban spa­ces and mixed-in­come res­i­den­tial schemes rather than large de­vel­op­ments on the city’s fringes.

Cape Town, like other met­ros in SA, is char­ac­terised by ur­ban sprawl – new de­vel­op­ments are of­ten lo­cated on the out­skirts of the city, which has a neg­a­tive im­pact on the mo­bil­ity of es­pe­cially poorer peo­ple, who are de­pen­dent on public trans­port.

Sta­tis­tics show that 95% of public trans­port users are in the low-medium in­come groups, and that av­er­age di­rect trans­port costs for low-in­come public trans­port users make up 45% of their monthly house­hold in­come.

On 8 July, the City will of­fi­cially is­sue a prospec­tus out­lin­ing all the nec­es­sary in­for­ma­tion for the prospec­tive de­vel­op­ment. The public and in­ter­ested par­ties will have ac­cess to the doc­u­ment and get to know the City’s ex­pec­ta­tions for the mixed de­vel­op­ment, called the Fore­shore Free­way Precinct. Prospec­tive bid­ders will have to present scale mod­els of their de­signs, which would be on dis­play in the City’s head­quar­ters at the Civic Cen­tre where the public would be able to view the de­signs. The bid­ding process will ex­tend un­til at least De­cem­ber 2016. Brett Her­ron, may­oral com­mit­tee mem­ber for trans­port, said a thor­ough public par­tic­i­pa­tion process would take place be­fore the con­tract will be awarded to the suc­cess­ful bid­der and an­other round of public par­tic­i­pa­tion will en­sue be­fore build­ing starts. The ques­tion, though, is whether the City of Cape Town’s am­bi­tious project would gar­ner enough in­ter­est from prospec­tive de­vel­op­ers and con­struc­tion firms, es­pe­cially in light of low eco­nomic growth, high in­fla­tion and ris­ing in­ter­est rates that make the pri­vate sec­tor cau­tious about spend­ing on new in­vest­ments. But Christie Viljoen, econ­o­mist at KPMG, is of the view that Cape Town wouldn’t strug­gle to get in­vest­ment from the pri­vate sec­tor. “Con­struc­tion in the Cape Town city cen­tre and the Western Cape as a whole is alive and well, and there would def­i­nitely be in­ter­ested par­ties.” A con­sor­tium of com­pa­nies with dif­fer­ent skill sets would most prob­a­bly un­der­take the de­vel­op­ment, says Viljoen, as op­posed to one sin­gle de­vel­oper. “In the end it would be a fi­nan­cial de­ci­sion – would the yield from the hous­ing project jus­tify the spend­ing on road in­fras­truc­ture?” The project will need a de­vel­oper and a fi­nancier to fund it, en­gi­neer­ing and con­struc­tion group Mur­ray & Roberts told fin­week by email. “Typ­i­cally, a de­vel­oper would un­der­take a fea­si­bil­ity study to as­sess whether the project makes fi­nan­cial sense to the ex­tent that it would at­tract the nec­es­sary pri­vate in­vest­ment.” It wouldn’t hap­pen in the fore­see­able fu­ture, ei­ther. “Public-pri­vate part­ner­ship projects typ­i­cally take any­thing from 12 to 18 months be­fore any con­struc­tion can start and they are ex­pen­sive to bid, as a lot of po­ten­tially abortive costs are in­curred in up­front in­ves­ti­ga­tions and de­signs, which would not be re­cov­er­able if the project does not go ahead or is found not to be fea­si­ble,” Mur­ray & Roberts said. “How­ever, the project is a novel idea and the City should be praised for think­ing out­side the box.”

Con­struc­tion on the high­ways in Cape Town’s city cen­tre started al­most five decades ago, but the project was aban­doned due to a lack of funds.

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