Council orders stand owners to top up in US$

THE Bulawayo City Council has directed that all housing beneficiaries who had developers abandon their projects without completing servicing the stands will have to pay top ups for the cost of the remaining works in foreign currency.

Council said beneficiaries are set to fund the refurbishment of in-house plant and equipment and the procurement of materials, with some of the beneficiaries to pay top ups ranging from US$1 151 to US$3 400. More than 3 000 stands that were being developed by private developers had been left uncompleted with the local authority forced to take legal action to resolve the impasse. Some of the projects affected included Emganwini 367 stands, Tshabalala (44), Magwegwe West (390), Woodville (144) and Emhlangeni Phase Two (502).

Last month, the local authority said four of the housing development tenders were cancelled after developers either failed to deliver on their contracts within stipulated timeframes or abandoned the projects. Contractors reneged on their obligations after council could not pay for their services exclusively in foreign currency. The companies argued that the monies agreed upon in local currency had been hit by inflation. The cancelled contracts were for the development of 144 low density stands in Woodville and 14 medium density stands that had been awarded to Asphalt Construction and 367 stands in Emganwini and 44 stands in Tshabalala that had been awarded to Tzircalle Brothers. According to a council report, council has implored that the beneficiaries pay for the remaining cost of works, with the payments meant to be made strictly in foreign currency.

“It was agreed that beneficiaries were to meet full cost of servicing. Payment should be in US$ with no option for ZWL$ to mitigate against the impact of the constantly depreciating local currency. Further engagements with beneficiaries were required to ensure they do not feel that they have been short changed,” reads the council report.

In a bid to give the beneficiaries a reprieve, the local authority further resolved to award a rates holiday of up to one year.

According to the report, assistant Director of Engineering Services (Roads) Mr Methusi Dibidi said some beneficiaries of the housing stands had agreed to pay the money.

“He explained that because of inflation and price escalation, it was agreed that the beneficiaries be engaged and be advised of the cost to be shared in order to have a way forward. They (stand owners) were engaged and were willing to pay for the servicing costs, however, further consultations would be held to avoid short comings. The beneficiaries had requested to be granted a rates holiday for a year. The City Legal Officer (Mrs Spekiwe Guta) advised that the economy had equally affected both council and the beneficiaries hence the need for beneficiaries to meet the servicing costs. The Town Clerk (Mr Christopher Dube) concurred that both parties had been affected by the current economic situation and beneficiaries would meet Council half way and finance some of the servicing costs,” reads the report.

The local authority further resolved that Magwegwe Extension and Pumula South 2 tenders be cancelled as they appeared to be well above the market rates, with the stands to be serviced using internal resources. However, beneficiaries were to fund the refurbishment of in-house plant and equipment and the procurement of materials.

In Emganwini and Tshabalala, the arbitrator, according to the report, ruled in favour of council and the contractor (Tzircalle Brothers) was to meet costs of remedial works, estimated to cost US$160 000. Outstanding surfacing works were estimated at US$313 145 and the outstanding costs were pegged at US$473 145.

“Beneficiaries wanted to immediately occupy their stands whilst the roads were being considered, citing that all other developments in the area were gravel roads. The committee noted that other areas did not have self-draining roads hence it was imperative that roads were surfaced first before they moved in. This would only increase maintenance costs of the road network to council which was already challenged on the entire road network. It was agreed that beneficiaries be met and advised of this cost to be shared among themselves. They be advised of an estimate cost of US$1 151 to be paid by each beneficiary for preparatory and surfacing works. The money to be paid in United States dollars and residents to raise it in a period of three months,” reads the report.

In Magwegwe West, another project which is under Tzircalle Brothers, the report notes that while it was still under arbitration, once completed beneficiaries will be required to pay a top up of US$3 400, for Asphalt construction abandoned stands in the area, beneficiaries are set to pay US$1 500 to complete the outstanding works. “At Emhlangeni phase two the contract was terminated amicably. The project was handed back to council to complete outstanding works. Works were ongoing using council teams but was adversely affected by the constant plant and equipment breakdowns. Cost of outstanding works is US$2 700 000. Council internal teams had moved into this development with the aim to work on an as and when internal funds were available.

“The committee resolved to invoke clause 10 of the agreement and advise the beneficiaries of the same. After review of the outstanding works cost, residents would be required to fork out the finances for the works to be completed. Beneficiaries were later met and insisted on the re-look of the rates holiday as a buy in from them,” reads the report.

Some of the stand owners interviewed said they were caught “in between a rock and a hard place”.

“We are desperate to move in and start building while we are still economically active, but on the other hand, we feel council is being unfair to us because we had paid for the stands in full. It is not us who are at fault here, council and its partners did not service the stands on time, but we will have to pay the top ups for the sack of progress, though we feel the figure has to come down in a big way,” said an Emhlangeni beneficiary.

Meanwhile, Bulawayo Mayor, Councillor Solomon Mguni said great things are yet to come in the city as council has lined up a number of housing programmes to reduce the housing backlog, which stands at about 130 000. On Friday the city commissioned their second housing stands project in Emganwini in as many months, further revealing that a third project will also soon be commissioned in Cowdray Park, as the local authority continues to reap the benefits of their housing delivery strategy.

In the new housing development strategy, the local authority engages developers with their own funds, instead of the traditional pre-sale concept. The developers recoup their finances from the proceeds of the sales of the stands.

On Friday, the local authority commissioned 267 stands that were developed by TCI International, barely two months after the commissioning of 114 stands that were developed by Natwecraft Investments.

“The city’s vision recognises that provision of adequate and safe housing is key in achieving the new urban agenda which sets standards for sustainable urban development. It encourages us to rethink on the planning, management and livability of our cities.

“It is for this reason that the focus is on green cities and recognition that land is a finite resource. It is for this result that as the city we are also interrogating a number of aspects on how we can not only provide adequate housing but build cities that serve as engines for prosperity and centres of cultural social well-being while protecting the environment,” said Clr Mguni.