Works and Supply Minister Felix Mutati says the level of competition among local and international investors to re-develop “idle and wasting” assets is already high.
And Mutati has admitted that government decided to develop the assets through a Public-Private Partnership (PPP), saying it lacked funding.
Government intends to redevelop five properties in Lusaka, including, Herbert Young Hostels, located next to Pamodzi Hotel, and Jacaranda Primary School, among others, because they have been deemed to be idle and wasting assets.
Speaking during ZNBC’s Sunday Interview programme, Mutati said his Ministry has so far received strong interest from companies from various countries such as South Africa and Japan, following that initial market sounding at Government Complex last week.
“So, in terms of reception, for me, it was refreshing to see the volume of ideas that the private sector have got. And what was interesting is that we only didn’t have the local private sector; we had people from the institutional private sectors such as, the pension funds; both private and public; the banking community, developers, and architects. We also had regional players and we also had international players, who went and looked at the locations of these properties, they said wow! So, since last week we have been harvesting and refining these ideas and beginning to create what we called a feasibility report, which will be unique to each of the five properties that we had put at [that] market sounding,” Mutati said.
“We had big companies from South Africa and Japan. We also had investors from Europe also attending. So, we had a variety of people that responded. We have the confidence, therefore, that the level of competition that is going to be generated will be very high. Prior to the engagement (with the private sector) we got our technical people, architects and other engineers, finance people, across the cluster of government, Ministry of Works, Ministry of Infrastructure and other departments of government, created concepts on each of the properties and these were five properties; creating concepts and options that can be done on each of the five properties. Now, these are the concepts and options that we were shown at the market sounding. For example, if you took Herbert Young, there were various options, offices plus hotels plus conferencing or, just hotels or just conferencing. And the preliminary designs were shown to the private sector. They looked at what we had done bringing that experience and wisdom. They have given us ideas on what we need to adjust in order to ensure that at the end of the day, we can create a financing solution, technical solution that is viable to private sector,” Mutati said.
And Mutati admitted that government decided to develop the assets through a Public-Private Partnership (PPP) because it lacked funding.
“We don’t have adequate money to be able to handle all the developmental projects that we face. We have to be looking for other solutions. We are also conscious of the fact that the answer doesn’t lay in the accumulation of debt as a way of solving inadequate office accommodation. So, we said how do you create a solution? We realize that on the other hand, we had certain assets that have wasted over the years. That have not been used, that have been idol but have tremendous value and are located in prime areas and are prime assets that could actually create value. We also realize that we have a private sector that is looking for opportunity, that is looking for value-addition; that is looking for enhancing their returns on investment. Let’s test this idea with the private sector. Test whether this idea is doable, whether it’s viable,” said Mutati.