1. BLUE ROSE CITY DEVELOPMENT
IMPACT ASSESMENT
© 2008 Demacon Market Studies
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2. PRESENTATION OUTLINE
Study Area
Economic Overview
Economic Activity
Turn–Key Projects
Impact Modelling
Synthesis

3. STUDY AREA

4. 4

5. 5

6. ECONOMIC OVERVIEW

7. Economic Growth - (Midvaal)

8. Economic Profile - Midvaal

9. Main Industrial Areas Key: Heineken Mittal Steel Company3 2 4 8 15
Key:
Manufacturing industrial areas 9 5 6 7 11 12 13 14 1
Mittal Steel Company
Heineken 4

10. Number of people employed in manufacturing sector
Iskor (Mittal Steel) retrenchment exercise 10

11. Regional Employment Perspective
Approximately additional people per annum to the area of which 63% is economically active and at employment rate of 56% – people Vs
Average labour absorption rate: 719 per annum
Gap: On average people per annum need to find work outside the Sedibeng District.
Blue Rose City Projects could help to reverse this downward trend.

12. Development Drivers – Surrounding Area
Mainly driven by Manufacturing Industry
-- Steel and heavy industry dominate the sector.
-- Mittal Steel South Africa company
Eskom power station
-- Lethabo Power station
people employed
Also driven by wholesale and trade sectors,
-- Vaal Mall m2
-- Sebokeng Plaza 5 778m2

13. Synthesis Sectoral dominance in Sedibeng - Manufacturing
- Retail Trade
- Finance and Business
The economy is highly dependent on manufacturing activities
The local economy have been heavily affected by changes in global steel prices and fall demand of steel products during the period.
Fluctuations experienced in the manufacturing sector directly affect employment levels in the area.

14. ECONOMIC ACTIVITY

15. Economic activity Approximate time taken to work - 12minutes for 15 km
Residential areas
Approximate time taken to work - 12minutes for 15 km
Residential areas
Manufacturing activity
Residential areas
Manufacturing activity
Residential areas
Manufacturing activity
Manufacturing activity
Residential areas
Residential areas

16. Accessibility to Jobs & Traffic Congestion

17. Transport modes Rail line Rail line
Major roads
Freeway (N1)
Rail link
Rail link
The majority of the residential areas , industrial sites, mining areas, farms and urban centers are well linked by rail and road transport.

18. Synthesis
Transport within each local municipality area is fairly good. Main transport networks in and around the municipal areas is road (N1, R59, R23, R554, R82) and rail modes .
The rail line links in surrounding area is fairly good. The rail line from Merafong City links to major rail line from Lenasia and then stretches through to Vanderbijlpark, servicing all areas along the rail line. The rail line from Vanschalkwykdam services areas along R59.
Informal settlements and low income residential areas are limited to road transport mainly due to lack interlink of rail lines between residential suburbs especially areas located in western part of Midvaal, places such as Roshnee.

19. TURN-KEY PROJECTS

20. Turn Key Projects 1 3 4 2 5 Doornkuil Evaton Urban Renewal
Blue Rose City Development
Heineken Projects
Heidelberg / Ratanda housing projects

21. R59 DEVELOPMENT FRAMEWORK CORRIDOR

22. Synthesis
Demand for affordable residential accommodation thus remains very high.
Additional Commercial and Industrial / Warehousing Space Demand constitute about 15% of the total demand for space, and Industrial / Commercial developments remain desirable.
Strategies to develop and increase economic activities which generate jobs, should be put in place in order to enhance demand for non residential space .
Net Effect: Increase tax base from which lower and middle income segment will benefit greatly.

23. 23
IMPACT MODELING 23

24. Impact modeling Total Economic Impact – Construction Phase PORTION
NEW BUSINESS SALES
GGP
EMPLOYMENT
The Valleys
11,243,903,000
3,755,226,000
22,500
Wood Acres
3,223,066,000
1,076,436,000
6,400
Mountain View
3,299,477,000
1,101,956,000
6,600
The Grace
18,965,556,000
6,334,096,000
37,800
Eye of Africa
13,543,092,000
4,523,108,000
27,000
Heineken
12,355,102,000
4,126,344,000
24,700
R59 Industrial Park
4,751,962,000
1,587,056,000
9,500
Graceview
21,497,877,000
7,179,838,000
42,900
TOTAL
88,880,035,000
29,684,060,000
177,400

25. Impact modeling Summary of Economic Impact – Construction Phase
VARIABLE
DIRECT IMPACT
INDIRECT IMPACT
TOTAL IMPACT
Additional Business Sales
61,620,354,000
27,259,681,000
88,880,035,000
Additional GGP
18,499,684,000
11,184,376,000
29,684,060,000
Additional Employment
113,600
63,800
177,400
VARIABLE
CAPITAL EXPENDITURE
TOTAL IMPACT
Additional Business Sales
R37.4 billion
R88.9 bn
Additional GGP
R29.7 bn
Additional Employment
177,400 employment opportunities
* The impact in terms of employment opportunities refer to temporary and roaming construction employment opportunities, and is expected to benefit between and people.

26. Impact modeling
Total Economic Impact – Operational Phase (Sustained Annually)
PORTION
NEW BUSINESS SALES
GGP
EMPLOYMENT
The Valleys
93,378,000
50,178,000 60
Wood Acres
61,289,000
32,934,000 80
Mountain View
72,698,000
39,064,000
The Grace
8,023,410,000
3,658,678,000
13,500
Eye of Africa
290,038,000
187,437,000
2,858
Heineken
3,593,624,000
1,636,585,000
6,050
R59 Industrial Park
1,365,577,000
621,902,000
2,300
Graceview
6,265,348,000
2,853,324,000
10,550
TOTAL
19,765,362,000
9,080,102,000
35,478

27. Summary of Economic Impact – Operational Phase
Impact modeling
Summary of Economic Impact – Operational Phase
(Sustained Annually)
VARIABLE
DIRECT IMPACT
INDIRECT IMPACT
TOTAL IMPACT
Additional Business Sales
9,136,200,000
10,629,164,000
19,765,362,000
Additional GGP
5,234,795,000
3,845,307,000
9,080,102,000
Additional Employment
23,218
12,260
35,478
VARIABLE
CAPITAL EXPENDITURE
TOTAL IMPACT
Additional Business Sales
R8.6 billion
R19,8bn
Additional GGP
R9.1bn
Additional Employment
35,478 employment opportunities

28. Construction Phase (Once-off) Operational Phase (Sustained Annually)
Impact modeling
Synthesis of Economic Impact Modeling Results
VARIABLE
INPUT VALUE
TOTAL IMPACT
Construction Phase (Once-off)
Additional Business Sales
R37.4 billion
R88.9 bn
Additional GGP
R29.7 bn
Additional Employment
177,400 employment opportunities
Operational Phase (Sustained Annually)
R8.6 billion
R19.8 bn
R9.1bn
35,478 employment opportunities
* Values are NPV 2008, for a total project duration of 15 – 20 years. Benefits indicated above are therefore accrued over the total time period of the investment.

29. 29
SYNTHESIS 29

30. Impact modeling
Additional Impact of New Households
±R2.2 billion to national fiscus through employee’s tax
±R1.4 billion additional retail spend annually
±R1.7 billion additional spend on transport, housing, medical etc. annually
The proposed Blue Rose project will (at maturity) lift the local economic growth rate to well in excess of 6% and more than double the current size of the Midvaal Local economy, and thereby assist to meet and exceed ASGISA goals in terms of aspects such as job creation and poverty alleviation