July 13, 2004

By Wiseman Khuzwayo

Johannesburg - The national treasury had given the Gauteng provincial government the green light to go ahead with its government precinct in the centre of Johannesburg, said project leader Jack van der Merwe.

The value of the investment has not yet been announced but it is expected to run into billions of rands.

This is to be a public-private partnership (PPP), which means that the financial risk for the entire project will be borne by businesses that will take ownership of the buildings after a specified period, usually 20 years.

"The government is aware that we have a massive demand on the fiscus, so the private sector must come in and play a role," said Van der Merwe.

The provincial government would now be going out to the market to prequalify bidders for the project, he said.

Plans for the precinct were first announced by Gauteng premier Mbazima Shilowa in October last year.

"We believe the initiative will send an unequivocal message that, as government, we are here to stay. Our status will change from being just tenants in rented property into one of the biggest property owners in the central business district [CBD]."

"There are already indications that others will follow suit and that the development will have a positive impact on the property market in the city."

Shilowa added that the provincial government had already conducted negotiations with property owners and had secured the relevant buildings.

These buildings together covered 150 000m2 and constituted 6 percent of the CBD's property market.

The Gauteng government has been renting about 120 000m2 of office space in Johannesburg since 1995, when the city was designated the seat of the provincial government.

Departments are expected to move into the precinct by January 2007.

The precinct will be following on the heels of the department of trade and industry campus, which was completed in April this year. It was also a PPP between the department of trade and industry and the Rainprop consortium.

Over the next 25 years, Rainprop will take care of the campus. After that the consortium will wholly own the building. It has 50 000m2 of office space in seven buildings, a full-site super basement of 40 000m2 and an additional three buildings.