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Friday Oct 12, 2012

More delays for District 6 property redevelopment

The February 2014 deadline for the construction of 950 houses in the redevelopment of District Six has been made "unachievable" by an eight month delay.

Construction of this R700 million phase was due to start in March for all claimants to meet the deadline set by President Jacob Zuma for their return to the area.

But the money has still not been released by the national Department of Land Reform and Rural Development.

The total redevelopment of the area is set to cost R7 billion to fill the 42-hectare space with mixed housing, commercial and office space.

So far only two pilot projects (138 houses) have been completed in District Six with only a handful of claimants returned to the area.

Former residents have waited decades to move back after they were forcibly removed by the apartheid government between 1969 and 1980.

While the past year has seen progress in the restoration process with a development framework and business plan for the area being adopted, the process of building and moving claimants back is still dragging on.

Last year, the District Six Redevelopment and Beneficiary Trust said project managers aimed to start building 950 houses in March.

In April, the Western Cape Land Claims Commission said they expected to advertise construction tenders earlier this year, but without funding, this process has been halted.

In May, the department said the money was available but "minor hiccups" relating to legal work was delaying the release of the money.

Nas Ally, chief executive of the District Six Redevelopment and Beneficiary Trust said: "National government wants to make sure they put the money into the appropriate vehicle and that is why getting the Special Purpose Vehicle (SPV) up and running is a priority. The trust and government are providing the support to get this going."

The SPV is a company being set up in which claimants will be shareholders. The company will drive the development of District Six and be responsible for leasing excess residential and retail property.

Ally said he understood that the SPV had to be set up by February.

This leaves only a year for tenders to be advertised, adjudicated and awarded for the construction of the full development which includes more than 4 000 homes and office and retail property.

Ally believes the February 2014 deadline is now "unachievable".

"The trust was ready to move with the accelerated phase in December already and our proposal was for the trust to carry on with the development and when the SPV is set up then we would hand over the development to them. The SPV must be set up as a matter of urgency because we have this very tight deadline," Ally said.

Land Reform and Rural Development spokesman Mtobeli Mxotwa said the department was not concerned about the looming deadline.

"District Six is on course, we are not behind and it will be successful," Mxotwa said.

He would not give a definite date of when the money would be released but said the department would spend the money by the end of this financial year as part of their current budget.

Once the 950 houses are built, the following phase will see 1 138 claimant homes, 165 social housing units, 106 gap market units and 281 homes for sale being built.

Cape Times

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