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Hwange gets a multi-million-dollar centre

by Prince Mushawevato
13 Apr 2014 at 08:50hrs | Views
A multi-million-dollar Civic Centre is set to be established at the envisaged Hwange Central Business District (HCBD), following an agreement between Hwange Local Board (HLB) and three investors.

The $55 million project will add lustre to the HCBD in a move aimed at attracting business investment and boosting the prospects of the area being granted a town status.

Ground work has already commenced to establish the HCBD expected to generate business from an estimated 20 companies that were recently granted coal mining licences and the $2 billion expansion of Hwange Power Station.

HLB town secretary Mr Ndumiso Mdlalose said the projects will bring development to Hwange, home to the country's biggest thermal power station and Africa's largest coal bed.

"At the moment we have people that are interested in investing in the project and we will soon be carrying out an environment impact assessment together with the Environmental Management Authority (EMA), which is a standard requirement for projects of this nature," he said.

The local board has since completed roads at the centre site and engaged a consultant to subdivide stands to pave way for the structural work.

Mr Mdlalose said two local and one foreign investor had been identified and their names would be released once the final aspects of the deal have been concluded.

Investigations by the Sunday Mail Business established that Old Mutual, Innscor group and a South African investor have been courted for the projects.

It is further understood that the investors are still assessing the potential return on their greenbacks and business opportunities in the area.

The assessment by the investors comes at a time the property business is facing a slump.

Currently, some of the country's most imposing properties have turned into white elephants with owners failing to reap dividends as occupancy rates have fallen below 50 percent as tenants cite high rentals.

Rentals average between $8 and $12 in Zimbabwe compared to about R80 and R100 for the same size in South Africa.

A 2013 Africa Report by property firms Knight Frank and Zimre Property Investments (ZPI) notes that property investment has been restricted as default rates remain high on the market.

The report attributes the situation to prevailing high rentals on a depressed economic climate suffering from the effects of low industrial activity.

However, the HLB is optimistic that the civic centre will bring good rewards not only for the area but also to the investors

"The town centre project is about to kick start development and we are positive it will pay back everyone involved," said Mr Mdlalose.

Initially, the board wanted to undertake the project using its own funds.

The move, however, proved difficult due to the prevailing liquidity crunch that has seen a number of projects failing to kick off.

The development resulted in the HLB changing the financing model of the project to a Build, Own, Operate and Transfer (BOOT) arrangement.

"The investors are now coming in on a BOOT arrangement. This is the same concept that was used to construct a number of towns around the country. Construction work has always been done through public and private partnerships," said Mr Mdlalose.

Market watchers contend that supportive industries are crucial for the expansion and development of small towns and cities, noting that lack of investment may result in the collapse of many areas as was the case with Kamativi.

But, with coal mining companies that include Makomo Resources having already put in motion plans to construct a multi-million-dollar property and Hwange Colliery Company Limited (HCCL) further extending its business catchment by constructing new trade complexes within the town, debate has been centred on whether the property ventures will be viable.

Makomo Resources general manager Mr Samson Mabvira expressed optimism in the success of all the developmental projects being carried out in Hwange.

He said the expansion had a positive bearing not only for the business community, but the Hwange population in general.

"If you look carefully you will realise that this place has enough business opportunities for every company or individual. Hwange is close to the country's leading tourist attraction (Victoria Falls) and that should easily create business for all the concerned parties. We are going to set a Makomo Town Centre within this place (HCBD) and according to investigations we have carried out, nothing is going to affect our plans," he said.

The development of Hwange has over the years suffered due to a perceived tussle between parallel authorities running the town.

HLB said it was facing serious disparities mainly in the administration of the town caused by quasi-local structures pulling in different directions.

The town has multiple administrative systems with a section that is under HLB while HCCL, Zimbabwe Power Company (ZPC) and National Railways of Zimbabwe (NRZ) also play a quasi-local authority role.

According to Mr Mdlalose the local authority was not collecting revenue from the eight wards which remained under the control of the companies whose local structures served private interests, thereby short-changing the local authority.

The situation has resulted in councillors from concession areas outnumbering those in HLB jurisdiction, thereby attracting low participation from residents when it comes to planning and implementation of projects.

Mr Mdlalose urged Government to hand over the administrations of some wards to the board as the current set-up was creating an unfair utilisation of resources.

"We need a focal point for doing business in Hwange urban, right now everything is scattered all over the show. If you get to the town you are not so sure where to start doing business.

"Out of the 15 urban wards, seven are in HLB jurisdiction while the remaining eight wards are from the company concession areas HCCL, ZPC and NRZ.

"It has become a nightmare for the board, which is facing pressure to deliver yet it doesn't have comprehensive boundaries and functions," he explained.

Apart from the town centre project, HLB is rehabilitating the sewer system in the area with the help of United Nations Children's Fund (Unicef).

It is also planning to use over $1 million in the expansion of Baobab Hotel to create adequate infrastructure to service tourists and business visitors.

Source - Sunday Mail
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