eBusiness Weekly
Michael Tome
Land developers and real estate stakeholders have bemoaned local councils’ failure to provide bulk infrastructure for various ongoing housing development projects.
Real estate players say self-provision of bulk services by land development firms was catapulting construction costs which ultimately rested on home seekers’ high costs of land per square metre.
Bulk infrastructure in construction refers to the fundamental facilities and structures that are required to support large-scale developments.
These infrastructure elements, which are essential for the functioning of the entire project, are typically built early in the construction process.
Construction of bulk infrastructure is crucial for creating a solid foundation for large-scale developments and projects, ensuring the efficient functioning and sustainability of the entire infrastructure system.
This includes the installation of water supply and wastewater systems, electrical power grid connection, telecommunications infrastructure and construction of roads, bridges and transportation networks to facilitate the movement of people, goods and vehicles within and around the project area.
Some of the major players in the land development sector say collaborative efforts from the council are required through rebates and exemption of some payments made for approvals in construction stages which now constitute a significant chunk of the total project costs.
According to the players, the bulk infrastructure is chewing up to 10 percent of the total project development costs.
Giving her submissions at the recently held ZimReal Property Investment Forum, Terrace Africa Development manager, Charity Chirume, indicated that the council was neglecting the sector players in provision of the necessary bulk infrastructure.
She said after going through several approvals and permit-seeking processes, the council would just step in for ownership at the end.
“Local council tells you that you are supposed to satisfy certain preconditions as a private developer for you to comply and as a private developer we are saying, we need to find ways to collaborate. The permit says you have to put in your own access ports, own sewer, own water connection and all these infrastructure developments are putting pressure on investments, but the council is supposed to be providing this.
“We feel like we are being penalised for these developments and we need collaborative efforts, maybe council should say provide for this road but you don’t have to pay for the approvals, why am I paying for approvals when this road is going to be handed over to council eventually, after which I’m told to maintain whatever the infrastructure we would have setup.
“These are issues that have to be addressed in the interim otherwise we are going to be walking on top of our mess if we do not sort this out as soon as possible,” said Chirume.
She said the process seemed greedy on the part of the council as they take ownership of the bulk infrastructure soon after completion citing that the arrangement should be on a win-win basis for both the developer and council.
“Look at it this way, you have to pay for the approvals in the first place, you have to install that sewer line, after installing that sewer they come and inspect a process you have to pay for, after they inspect you hand it over back to council, so this like a long chain, a strain on the private developers.
“These developments are a substantial cost, I think one of the developments we are looking at is costing up to 10 percent of the whole development because they tell you acceleration , deceleration everything you have to put in for this project to be compliant.”
ZimRe Property Investments (ZPI) managing director, Edson Muvingi, said the failure by council to provide such basic infrastructure was increasing the final land cost after improvements.
“The primary responsibility rests with the council but we now assist them to deliver what they should otherwise have. Private sector is providing public infrastructure and public institutions that we are providing infrastructure for must be able to provide three things, fiscal, physical and monetary incentives, because that is not our primary responsibility.
“This has seen a rapid increase in square metre price for land, that is where the problem is when private sector provides public infrastructure, we look at how to recover our capital, consequently we bill it in the final land cost so that we recover the money with profit,” said Muvingi.
He also lamented council’s culture of not honouring signed contractual agreements, giving an example of the Victoria Falls project where (unmentioned) a power producer has not honoured a power supply agreement since 2019, and the Kuwadzana project where residents were illegally connected to a sewer line (allegedly by council employees) without obliging to the required connection fee, which has put the company at a loss-making position for the investments made into the project.
“How do we deal with disregard for contractual obligations that we would have agreed on by authorities? Once we have a contractual agreement let’s abide by them.
“There is a major disconnect locally, go to East Africa, they even go to the extent of giving developers a rebate, if you are building a three storey building (densifying) you get a rebate, once you put a road which is a public infrastructure you get a rebate and tax incentive.”
