Land developers cry foul over commonage:
LAND developers are crying foul over a principle, known as commonage, which forces contractors to surrender 10 percent of serviced residential stands and all the commercial and institutional stands when developing State land saying it is making them incur losses incapacitating them to carry out other projects.
Developers bear the costs of servicing the land but surrender to Government at no charge putting the cost of housing development unbearable.
It costs as much as $100 000 to service one stand especially in prime low density areas.
The Infrastructure Development Bank of Zimbabwe showed that it may be forced to rethink residential stands development because of commonage, where most of the prime land in Masvingo’s Clipsham suburb was taken under commonage.
Some prime commercial stands with mountainous views could have cost an arm and a leg but are going for a song.
IDBZ chief executive officer Thomas Zondo Sakala highlighted the concern while addressing Government Ministers and beneficiaries of stands at the handover ceremony for Clipsham Housing Project in Masvingo Monday.
“Another Government department (Local Government Ministry) gets 10 percent of serviced residential stands free. It also gets all serviced commercial stands free. It’s not sustainable and we will not be able to do more of these projects when we looked at the financial impact it’s prejudicial to the developer,” said Mr Sakala.
“We have therefore started discussions with the Ministry, and the honourable Minister supports us fully and we will be preparing submissions jointly to Cabinet in order to revisit this issue. For the IDBZ it is financially unsustainable and hence might push us out of this sector completely,” said Mr Sakala.
About $7 million has so far been spent on the project and Mr Sakala said more resources were still required.
Clipsham was developed in partnership between IDBZ, Gorge Safaris and George Holdings with the support of the Government through Ministry of Local Government, Public Works and National Housing, and the City of Masvingo.
The project entails the development of 205.7 hectares of land into residential, commercial, industrial and institutional stands on Lot 2 of Clipsham, a site located some five kilometres outside Masvingo town along the Masvingo - Beitbridge highway.
The project is targeted at developing 704 low density residential stands, 26 service industrial stands, 24 institutional stands and 16 commercial stands.
Local Government, Public Works and National Housing Minister Savior Kasukuwere, his counterpart, Finance and Economic Development Minister Patrick Chinamasa, who was guest of honour Minister of State for Provincial Affairs Shuvai Mahofa, and other senior Government officials attended the event.
Minister Kasukuwere called for ICT products, data cables, among others, to be set up at housing projects such as Clipsham.
“Our city councils have stopped developing housing units and servicing land. Should you require raising funds, raising bonds please come and get back to that business.
“We cannot have councils using the money collected from rates to pay officials without enhancing service delivery,” said Minister Kasukuwere.
But Minister Chinamasa put a caveat for councils to access the funds.
“We are prepared to give local authorities borrowing certificates to put infrastructure but there’s a catch to it. Here is the condition you must organise your finances in such a way that only 30 percent is going to wages and 70 percent going to service delivery.
“If you do that I’ll give you borrowing certificates tomorrow.
“Most of the local authorities are not properly managed. They spend too much on wages and not much on service delivery and infrastructure. But I’m aware Minister Kasukuwere has given a directive to all local authorities to observe this 30 /70 budget story,” said Minister Chinamasa.
He said the Urban Development Corporation and councils will play a key role in the development of housing infrastructure.
This decision, according to Minister Kasukuwere, was taken after Government noticed how desperate house seekers are being milked by unscrupulous developers who are given land and yet they do not have financial and technical support.
He said the IDBZ has also been allocated a further 100 hectares of land for development of housing units and stands.