Developers say municipal infrastructure has worsened - except in Cape Town

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SAPOA expects Cape Town to see the biggest increase in future projects and investments out of the 15 municipalities covered in its state of infrastructure report.
SAPOA expects Cape Town to see the biggest increase in future projects and investments out of the 15 municipalities covered in its state of infrastructure report.
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  • The South African Property Owners' Association says municipalities are breaching their constitutional mandate.
  • Because of their failure to provide bulk infrastructure timeously, many new property developments were placed on hold or cancelled.
  • It expects many municipalities, save for Cape Town, to see a significant decline in future projects and investments.
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Most municipalities are in breach of their constitutional mandates to provide services to communities and businesses they collect rates and other taxes from. As a result, property developers and private homeowners have to bear more and more costs of maintenance and upgrading of various infrastructures in their cities, says the property industry representative body, the South African Property Owners' Association (SAPOA).

SAPOA has published a report detailing failures in various municipalities across SA. The association undertook research on the state of infrastructure in 15 of the country's largest municipalities. It chose those 15 – which include all the metros, Mbombela, Polokwane, uMsunduzi, Emalahleni, Emfuleni, Rustenburg and Sol Plaatje Municipalities – since that's where most developments take place and are also the municipalities where investors are focusing their investment decisions. SAPOA looked at their infrastructure development plans and annual reports.

SAPOA found that ageing infrastructure like water pipes, water treatment plants, roads, and electricity substations have become increasingly evident throughout various municipalities.

Using data from the municipalities' infrastructure plans and annual reports, SAPOA gave the City of Cape Town an 8% mark when grading it against the benchmark of what a world-class water infrastructure looks like. It gave all the other 14 municipalities zero. On stormwater infrastructure, it gave all 15 a zero. The City of Cape Town also got the highest grading for road infrastructure, followed by Emfuleni.

When asked whether the infrastructure conditions improved, remained unchanged or worsened over the past five years, Cape Town scored the highest on improvement, with 27% of respondents saying things are better now. More than half (54%) said they remained unchanged, while 19% felt they've become worse.

In other municipalities, the votes overwhelmingly pointed to things getting worse. For instance, in uMsunduzi, 93% of respondents felt that infrastructure has deteriorated. This was followed by Buffalo City, where 90% said it has got worse, eThekwini (85%) and Ekurhuleni (85%).

One of the main complaints from property owners, consultants, architects, developers, property managers, and asset management professionals SAPOA talked to was that many developments are allegedly lagging, placed on hold, or even cancelled due to poor or unavailable infrastructure.

This was despite developers and the private sector's willingness to pay for the bulk infrastructure they need, respondents said. An overwhelming 92% of SAPOA members felt that municipalities were not utilising their bulk infrastructure development contributions to adequately upgrade and maintain the infrastructure they've paid for - and that now, new property developments are suffering.

"It is evident that the development pipeline is decreasing in the municipalities that form part of the study due to the state of infrastructure in the country," wrote SAPOA in the report.

Based on responses from its members during this research, the report flagged municipalities where it expects to see a decrease in future project developments and investments. And this could potentially compromise revenue generation for those municipalities. Municipalities in the Eastern Cape lead in that regard, with SAPO calculating that they could see a 59% decline in investment towards property development. It was followed by KwaZulu-Natal (46%) and the Free State (40%).

On the other hand, the Western Cape could see an 87% increase in future projects and investments, followed by Gauteng with a potential 39% increase.

READ | Property owners launch legal bid to stop City of Joburg's 'unlawful' fee


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