SAVANNA CITY - Gauteng’s largest privately initiated development Background information to the Premier

1.Background The project was initiated in 2007 and the Farm Doornkuil was purchased. The Housing Impact Fund of South Africa (HIFSA), managed by Old Mutual, was looking for housing opportunities to meet its Financial Charter obligations HIFSA is a R9BN fund created by Old Mutual, DBSA and GEPF Basil Read after the successful implementation of Cosmo City was looking for new opportunities. 2

1. Background cont. The property is approx.1400 ha, located in Midvaal Local Municipality, next to Orange Farm and Lakeside 3

2. Scope of the development housing opportunities: 5517 Fully subsidised units 5518 FLISP 4729 Bonded 2635 Residential 3 16 Schools 400 ha conservation area Public open spaces Clinics, Churches and other social facilities Commercial & retail opportunities 4

3. Project Concept All services and facilities easily accessible (walking & public transport) North-south spine linking all economic & social facilities has been provided Direct link to Lakeside, Orange Farm and surrounding agricultural areas Open spaces located close to place of residence Various income levels mixed Economic nodes provided at various strategic locations Project to uplift surrounding low incomes areas, provide higher income development 5

4. Spatial relevance The project is indicated as a neighbourhood node in the MLM SDF Provide goods & services conveniently close to where communities currently reside To create a focus for more residential areas within the urban development boundary SC is one of the core areas in MLM 6

5. Contribution to the Region Savanna City will : Provide 14 new Schools: Need in the region by 2014: approx. 200 new classrooms Contribute to population growth in District MLM economy not generating enough employment opportunities, SC will assist reducing employment Provide improved services Increased revenue Benefit surrounding areas Prevent informal settlement development Stimulate increased demand for goods & services Create work experiences & develop skills which will lead to higher level of human capital 7

6. National relevance (NDP – 2030) Housing Sanitation, water, electricity Clean & safe environ- ment Employ- ment Education & skills Transport 8

7. Project Constraints Limited bulk services available & funding Urban Management challenges Cross-boundary services issues (CoJ, Emfuleni, MLM) Project delays and impact on cost and escalation (2007 initiated and Aug 2013 signed service agreements – 6 yrs later) Community expectations Additional funding requirements from investors (HIFSA) Limited control by Developer on the provisioning of the sanitation transportation & treatment (Emfuleni & Randwater) Delivery of an affordable housing project 9

8. Project Opportunity Project impact to reach far beyond the current MLM (Orange Farm in CoJ and Emfuleni (sewer line) Project will open development opportunity towards Orange Farm and the R82 Bulk services for the development (sewer line) to open other areas for development and deal with existing services challenges Private sector to provide over 5000 fully subsidised housing opportunities (free land) & over 5000 FLISP housing opportunities Project to provide over employment opportunities during construction and post construction Skills & SMME Development Building capacity at municipal level Opportunity to flagship & pilot new approach between government & private sector 10

9. Financial Rationale Fully subsidised & FLISP housing to attract government support in terms of bulk funding 70% of the development within the affordable housing bracket – grant funding to cover 70% of the bulk service cost within the development 100% DoE bulk funding DoE funding for electrical connections (fully subsidised units) only avalaible once development 80% complete - Problematic DWAF: Funding for the sewer line & upgrading of the Sebokeng Works Gauteng Department of Human Settlements to provide fully subsidised housing funding and FLISP subsidies (agreement already signed) Developer to provide “free” land for subsidised housing FLISP policy problematic – current R incl. VAT package Developer to contribute up to R35M to MLM for Urban Management Developer to pay bulk service contribution towards new sewer line Developer to carry 30% of bulk service costs 11

10. Current status All agreements are in place Await final confirmation of the total bulk services grant funding from Province and National. Site Establishment started in Sept 13 Nursury on site with over trees for the development Submissions made to DoE and Gauteng Fund for the first 3 schools, await confirmation for schools to be opened 2015 Development dependant on the upgrading of the Sebokeng Sewer Works (once the development reach beyond 4000 units) and the construction of the sewer line by Emfuleni. 12

11. Critical success factors going forward 70% grant funding for the bulk services – Project investors require firm commitments for entire project (year 1 to 9): Letter from Province – before construction start (Investment committee meet Nov 2013) Funding from Province to Developer Signed agreements for bulk funding Gazetting of bulk funding Funding to construct the sewer line – to start 2014 – Discuss with Emfuleni Local Municipality – to meet SC timelines The Upgraded Sebokeng Sewer works – to also meet SC timelines 13

11. Way-forward & programming Site establishment: Sept 2013 Construction start: Oct servicing Launch of project: Nov 2013 Top structure construction: Mar 2014 Bulk funding – Provincial Commitment: 1 Oct 2013 Bulk funding – Overall Commitment: Feb Gazetting 14

Contact details Davina Piek /