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South Africa construction market to be boosted by 10-15 year new city project in Modderfontein

The South African construction market is to be boosted by a new 10-15 year project funded by Chinese company, Shanghai Zendai, to build a new city in Modderfontein in eastern Johannesburg. Once compete, the city will include 35,000 new houses, an education centre, a hospital, and a sports stadium and will house around 100,000 residents.

Chinese firm Shanghai Zendai bought the 1,600 hectare plot of land back in November 2013 for R1.06 billion from South African chemical and explosive company AECI and has plans to develop the site into a world financial centre to rival New York City and Hong Kong. The project is forecast to take around 15 years to complete and will provide jobs for local contractors, engineers and other workers in its construction, as well as 100,000 jobs in the new services available upon completion. The new city site is located on the Gautrain route between the OR Tambo International Airport and the central business district of Sandton in eastern Johannesburg, and will soon include a new Modderfontein station to enable easy access.

The transaction to purchase the property was one of the single largest foreign investments ever in South Africa. Shanghai Zendai is a Hong Kong listed investment company that develops and manages property projects in northern China, Shanghai City and Hainan province and hopes that the Modderfontein project will create a new hub for Chinese firms looking to invest in sub-Saharan Africa.

South Africa is the second largest economy on the African continent and the construction sector is set for a boost due to the South African government’s National Infrastructure Plan which focuses investment in energy, transportation, telecommunication and housing sectors. The construction sector experienced a major boost in 2010 when South Africa hosted the Fifa World Cup, but the economic downturn caused a slow down of growth. Recent government focus on infrastructure development has seen a rapid urbanisation in the country and the project at Modderfontein illustrates the significant influence of foreign investment. Foreign investment is one way by which the South African construction industry is overcoming the challenge of cost overruns that many domestic companies face due to the unavailability of funds, the time-consuming roll out of labour, labour unrest, and major project delays.

Key players in the South African construction market should be aware of the upcoming trend towards ‘green’ buildings. In an effort to promote sustainable development, construction companies are increasingly focusing on developing energy-efficient buildings and sustainable construction solutions.

Source: Companies and Markets.com


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The Role of Infrastructure in a Sustainable Society

Green Business Journal 9 (2013)

By Kristan Wood

“Infrastructure is probably the single most important need for Africa to develop.” These are the words of Stephen Hayes, president of the Corporate Council on Africa – a major U.S. business organisation linking the United States with Africa. The development of infrastructure is essential for the creation of a healthy, happy and thriving economic climate in communities. Future endorsements, successes and the enhancement of sustainable development rely on an efficient infrastructure programme within any given country. Particularly in developing countries such as South Africa, the planning, design and construction of sustainable infrastructure is of vital importance – how else are we to connect and grow as a nation?

If infrastructure is to be of benefit to future generations and contribute positively to the potential of a country, it must be sustainable. Infrastructure in South Africa can and should be viewed as an investment into economic growth, and therefore, it is not only the short term provision of infrastructure that holds weight, but it is the planning and designing which will take full account of its own impact and its operational needs and use. A responsible standard of sustainable infrastructure plans and designs needs to be set in both the short and long term and those who set the standard are held liable for designs that benefit not just the public, but the environment as well. What precautions and plans has South Africa proposed in an effort to achieve these aims?

National Infrastructure Plan:

The South African Government adopted a National Infrastructure Plan in 2012. With the plan, the government aim to transform the country’s economic landscape while simultaneously creating significant numbers of new jobs, and strengthening the delivery of basic services. The plan also supports the integration of African economies.

Government will, over the three years from 2013/14, invest R827 billion in building new and upgrading existing infrastructures, Minister of Finance Pravin Gordhan announced in his 2013 Budget Speech. These investments will improve access by South Africans to healthcare facilities, schools, water, sanitation, housing and electrification. On the other hand, investment in
the construction of ports, roads, railway systems, electricity plants, hospitals, schools and dams will contribute to faster economic growth.

Gordhan delivered a good budget from an infrastructure point of view with budgeted spending for public-sector infrastructure totalling R827 billion over the next three years. But the challenge for the state and South Africa is implementation and delivery on the ground and the huge amounts of the budget that are wasted each year through corruption and chronic implementation.

South Africa has spent R642 billion over the last three years on infrastructure projects in the public sector and a substantial number of projects are in progress or about to get under way. Weaknesses in planning and capacity, however, continue to delay implementation of some projects. But Gordhan said steps were being taken to address the problem: “Government is improving capacity to plan, procure, manage and monitor projects, as well as working more closely with the private sector at various stages of the project development cycle. Building technical capacity in the public sector is a multi-year effort, and initiatives to strengthen these functions have expanded.”

Gauteng Department of Infrastructure Development (GDID)

The GDID Green Programme starts from the premise that achieving a green Gauteng is a major challenge, as well as a key opportunity. It is a challenge because it requires a fundamental shift away from historical ways of organising and managing our society and economy. Accelerating climate change; resource constraints and rapidly rising prices; the sudden re-appearance of environmental risks that were previously not accounted for – are all key drivers for change. There are major market opportunities and many decent jobs that can be realised from building a green economy. And fundamental changes in the way we live will bring healthier, happier and more resilient communities and households – something that has huge value evenin isolation.

GDID has embarked on a project to quan- tify the usable roof space in all government owned buildings in the Gauteng province. It is estimated that all government buildings have approximately 8 million square meters of roof tops that could be used for the mass roll-out of solar panels. If all the roof spaces are utilised, up to 300MW of electricity could be generated from public buildings alone. The department also believes that a mass roll-out of solar panels in the province can be used to spark a massive demand for solar PV technologies. Gauteng can utilise this demand to spark the development of a solar manufacturing industry in the province. Experience gained in South Korea indicates that a solar panel manufacturing facility can be built from a demand of approximately 12MW/month and GDID’s potential demand alone could sustain a standard factory for a period of two years. A partnering with Eskom has also been approved to audit and retrofit all government buildings with energy efficient technologies including lighting, air conditioning and water heating.

South Africa’s infrastructure plan sufficiently incorporates an inclusive social agenda. It begins from the premise that
it is not enough to merely select a limited number of economic firms or clusters for targeted green support, but that rather the sustainability of our economy depends on a fundamental transformation in number of sectors. “These cross-cutting sectors include air quality, climate change, economic development, energy, food security, land use, transport, water and sanitation, and waste, which together form the foundation for a true green economy,” reports GDID. “The department’s view is that investing in these sectors will promote economic growth so that green jobs become the norm, rather than add-ons to inherently unsustainable development. This broader shift in its development path will see Gauteng at the forefront of sustainable economic development.”

Green Building Council of South Africa

The Green Building Council of South Africa is an independent, non-profit company that was formed in 2007 to lead the greening of South Africa’s built environment. The Council provides tools, training, knowledge, connections and networks to promote green building practices across the country and seeks to build a national movement that will change the way the world is built.

But what does the concept of green building entail? Green building incorporates design, construction and operational practices that significantly reduce or eliminate the negative impact of development on the environment and people. Green buildings are energy efficient, resource efficient and environmentally responsible. The green building movement addresses what are becoming the major issues of our time: excess energy consumption and the related CO2 emissions from burning carbon fuels; the pollution of air, water and land; the depletion of natural resources; and the disposal of waste.

Sustainable Infrastructure

It is possible to then deduce that sustainable infrastructure design is not just about incorporating new infrastructure into society – it is about the rehabilitation, reuse and optimisation of existing infrastructure. This includes the renewal of existing infrastructure, the long-term economic analysis and considered benefits of infrastructure, energy and cost mitigation in the building process, the protection of existing infrastructure from the environment as well as the conservation of the environment during material selection and the building process. Sustainable infrastructure and responsible design should balance all social, economic and environmental issues.

In both developed and developing nations globally, a lack of, or compromised access to clean water, sanitation, energy, transportation and various facilities severely compromises the growth of the economy. Basic infrastructure is therefore not a luxury that can be implemented once a country is established, but a necessity for supporting and creating a sustainable economic environment.

The stipulation of appropriate infrastructure is an urgent and ongoing requirement not just for South Africa or Africa, but on a global level.