1. -ROLE OF LAND POLICY IN FINANCING URBAN DEVELOPMENT –
CITY OF JOHANNESBURG
-ROLE OF LAND POLICY IN FINANCING URBAN DEVELOPMENT – 1

2. CITY FINANCES NO KEY PERFORMANCE AREA KEY PERFORMANCE TARGET 1
Current ratio
Above 1:1 2
Solvency ratio
Above 2:1 3
DEBT TO REVENUE RATIO
BELOW 45% 4
Remuneration to Expenditure ratio
Below 30% 5
Maintenance to PPE ratio 8% 6
INTEREST TO EXPENDITURE RATIO
BELOW 7% 7
Net operating margin
Above 15% 8
Cash cover
45 days 2

3. CITY FINANCES

4. CITY FINANCES

5. TRANSIT ORIENTED DEVELOPMENT

6. INTENSIFICATION OF USE

7. DETAILED PLANNING

8. MARKET ANALYSIS
MIXED USE
RESIDENTIAL
OPTIMAL

9. INFRASTRUCTURE DEFICITS
Item
Cost
Major Quantity*
Unit
Description
Roads
R 23,742,189.73
52,760.42 m2
Total road extension area
Sewer
R 297,570.24
815.00 m
Supply, laying and bedding of uPVC pipes (total length)
Stormwater
R 6,148,537.62
8,167.50
Supply, laying and bedding of Class 100D pipes (total length)
Water
R 176,911.17
265.00
Total
R 30,365,208.76
Contigencies 10%
R 3,036,520.88
R 33,401,729.64
Disbursements 15%
R 5,010,259.45
R 38,411,989.08
ELECTRICAL COST ESTIMATE - EXTERNAL SERVICES
New Substation Upgrade
88 kV Cable Network Upgrade
TOTAL km
Rate/km
Total
SCENARIO 1:
R 150,000,000.00
10.00
R 10,000,000.00
R 100,000,000.00
R 250,000,000.00
SCENARIO 2:
R 285 million ($21 million)

10. STRUCTURE

11. VIABILITY Phase 1 2 3 Stabilization Year 2019 2022 2025
Market Value of New Development
3,153,797,774
7,198,014,369
12,321,195,247
Additional Tax Revenue Over Existing Base
10,569,163
27,730,568
49,470,497
Incremental Tax Available for New Bonds
17,161,405
21,739,929
Bond Tranche
Sizing
78,900,000
128,200,000
162,400,000
TOTAL BOND CAPACITY
MIXED USE R 369,500,000

12. VIABILITY Phase 1 2 3 Stabilization Year 2019 2022 2025
Market Value of New Development
4,510,417,404
10,294,271,102
17,621,210,195
Additional Tax Revenue Over Existing Base
7,005,379
19,596,828
35,547,575
Incremental Tax Available for New Bonds
12,591,450
15,950,746
Bond Tranche
Sizing
52,300,000
94,100,000
119,100,000
TOTAL BOND CAPACITY
RESIDENTIAL R 265,500,000

13. VIABILITY Phase 1 2 3 Stabilization Year 2019 2022 2025
Market Value of New Development
3,547,072,774
8,095,598,585
13,857,634,300
Additional Tax Revenue Over Existing Base
6,611,227
18,697,243
34,007,710
Incremental Tax Available for New Bonds
12,086,016
15,310,467
Bond Tranche
Sizing
49,400,000
90,300,000
114,400,000
TOTAL BOND CAPACITY
OPTIMAL MIX R 228,200,000

14. NEXT STEPS…
Resolve accounting treatment – off balance sheet – at worst limited exposure.
Cost engineer infrastructure cost + look at other LVC, i.e. bulk contributions
Investor prospectus + test market appetite
Security instruments
Draft legal agreements – servicing agreement + escrow account
Developer agreements – race against time
Seed the establishment of the SPV with proven execution capability
Sponsor capital raising

15. CITY OF JOHANNESBURG DEVELOPMENT PLANNING YONDELA SILIMELA
10th Floor, A Block, Metropolitan Centre, No 158 Civic Boulevard, Braamfontein, Johannesburg, Gauteng Province, South Africa
YONDELA SILIMELA