City of Tshwane’s mission to lease mega assets to private sector
|Published
The City of Tshwane’s intention to lease its major assets to the private sector came under the spotlight in 2023 with a proposal to have both the Rooiwal and Pretoria West power stations run by independent power producers.
The latest proposal to lease municipal properties is the move to put the iconic Tshwane Events Centre, commonly known as the Pretoria Showgrounds, under private management.
The ongoing process with regard to the centre will see construction of a hotel as part of the proposed R1.5 billion redevelopment.
Council approved a report for the facility to be turned into a mixed-use commercial precinct comprising a hotel, conference facility, and residential, commercial and exhibition use.
For years, the event centre was leased to self-proclaimed prophet Shepherd Bushiri’s Enlightened Christian Gathering Church, which paid between R800 000 and R1 million a month to use it.
When he assumed office in March last year Mayor Cilliers Brink predicted the proposal to lease the two municipal power stations, which made it to the council agenda in September.
A council report passed indicated that the two stations would be leased for a period of 40 years to a private service provider for power generation.
However, the proposal must first be subjected to a public participation process.
Former mayor Randall Williams came close to overseeing the R26bn unsolicited bid proposal for power generation made by a private company called the Kratos Consortium.
However, that was rejected after it emerged that Williams had allegedly meddled in the municipal procurement processes.
Last year, the council gave the proposal a thumbs-up with the backing of the ANC, which called for the leasing to be extended to 40 years from the 30 years proposed initially.
The EFF, on other hand, expressed disappointment with the proposal to lease the land to a private entity, suggesting that the municipality should build its own capacity to manage such projects.
The council approved a public participation report for the proposed 40-year lease of the Rooiwal and Pretoria West power stations in terms of Regulation 35 of the Municipal Asset Transfer Regulations.
“This is an important first step in our energy master plan for Tshwane, which seeks to reduce the City’s dependence on Eskom and alleviate the burden of load shedding.
“The council-approved report forms part of the work of our energy task team, which we appointed earlier in the year to look at a mix of energy solutions for the City in the face of the ongoing load shedding crisis,” Brink said in a media statement.
He said the mandate of the task team was “not to favour any one energy provider or any one method of energy generation, but to open our offer as widely as possible to the market”.
“Capital upgrades are needed at Rooiwal power station and complete refurbishment is required at Pretoria West power station,” he said.
Brink said the City didn’t have the technical or financial capacity to leverage on the potential of these assets to enhance the City’s energy security, but it had assets that could be used to secure successful partnerships through a request for proposals process.
“However, we must first get the public’s input into our plans and this is the step that council approved today. The public will have 30 days to comment on the proposal, then the matter will return before council for a final decision,” he said.
Electricity Minister Dr Kgosientso Ramakgopa has also backed an initiative to revitalise municipal power stations in a bid to mitigate the effects of load shedding.
The National Energy Regulator of South Africa (Nersa), on the other hand, has warned against a situation where consumers could be ripped off by independent power producers destined to generate electricity from the power stations.
During a round-table discussion hosted by Brink on the energy situation last year, experts expressed confidence that the City was on the right track in terms of its plan to generate energy independent of Eskom.
In addition to the leasing of municipal properties, council proposed that both the HM Pitje and Odi stadiums be transformed into multiple sports and mixed-use facilities with a view to make them financially viable.
It was proposed that the stadiums be leased to private investors for a maximum period of 80 years to turn them into multi-purpose sporting facilities.
Starting from this month, according to the City, the process to lease the stadiums will be subjected to public participation to solicit general views on the move.
The City said the “sustainability of these stadiums requires high levels of maintenance which the City cannot afford due to its financial challenges”.
The Mamelodi-based HM Pitje Stadium was demolished by the Gauteng provincial government in February 2023, but the asset remains in the ownership and custodianship of the City.
The stadium had several shortcomings and consequently did not comply with occupational health and safety.
The HM Pitje Stadium was earmarked as a training facility for teams participating in the 2010 Soccer World Cup, but that never materialised owing to non-compliance with occupational safety regulations.
The structure of Odi Stadium in Mabopane, in turn, was deemed unsafe and dilapidated.
It was reported that the community asked for the stadium to be demolished because it was unsafe for children who used the stadium.
The 60 000-seater Odi Stadium was built by the erstwhile homeland government of Bophuthatswana in the 1980s. It was subsequently transferred to the City of Tshwane after the collapse of the former bantustan.
It hosted leading teams such as Sundowns, Orlando Pirates and Kaizer Chiefs in its heyday.
Pretoria News
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