KwaZulu-Natal plan logjam hits developers

Some property developers face liquidation because the KZN Surveyor-General, whose office processes property plans, is sitting on almost R3 billion of work as a result of labour go-slows.

Gavin Lloyd, president of the SA Geomatics Institute, recently issued a press release in which he said the office had "effectively ceased to function".

Lloyd said wage negotiations had been closely monitored by the institute since late last year and approval times had stretched from four weeks to four months - without registration, which meant developers could not be paid for completed developments.

"Since this is a cash flow business, such approval delays will push even experienced developers into liquidation," said Lloyd.

Keith Wakefield, CEO of Wakefields Estate Agents, said delays could have dire consequences. "The construction industry is one of the biggest employers. Hundreds could lose their work and income if developers are forced into liquidation because of in-fighting in a government department over pay."

Acutts chairman Pat Acutt said: "The nosedive in functionality of the SG has had a negative impact on a number of pipeline developments and the last thing our sensitive, resurgent property market needs is for anyone to slow down the provision of housing."

Charles Alterskye of Dormehl Property Group described the delays as "an embarrassing example" of another form of service delivery failure by a state organisation.

"Our developers have been an excellent source of mass employment, but their businesses are being jeopardised, firstly by the continuing difficulty of obtaining bank finance for their projects and now with the virtual collapse of the operating capacity at an essential government department."

Chris Tyson, MD of Tysons said: "One just has to travel to other parts of the country to see how badly this has affected KZN. While other provinces have growth, development in KZN has literally ground to a halt with many developers facing liquidation."

Chris Williams-Wynn, the KZN SG, said half the projects his office received were being processed. He estimated 2 000 land parcels were affected by 52-day delay. If each had an average value of R 1.4 million that would mean R2.9 bn of property delayed.

He said salary increases had been approved but not implemented and staff were on a work to rule. A wage increase implementation plan had been provided and it was hoped this would come into effect this week to ensure the development blockage was removed.

Property Guide (Sunday Tribune)

Posted at 08:41AM Jan 25, 2010 by Editor in Market  |  Comments[1]