A public-private partnership agreement to design, build, finance and operate the new R500-million head office campus of the Department of Trade and Industry in Pretoria has been signed between the Trade and Industry Department, the Department of Finance, the City of Tshwane and an empowered consortium, Rainprop.
Standard Corporate and Merchant Bank advised, arranged and
underwrote finance for the design and construction of the project, the group said in a statement on Monday.
The Department of Trade and Industry has awarded a 25-year master concession to Rainprop to design, build, finance and operate the head office campus, situated in Nelson Mandela Drive on the banks of the Apies river.
This is the first national accommodation project to be approved by the National Treasury’s public-private partnership unit under the Public Finance Management Act 1 of 1999.
As such, its concession terms and financing structure will provide a precedent
for similar public-private partnership deals in the future. The funding package was structured on a non-recourse basis, and incorporated both senior terms loans and mezzanine finance.
An innovative funding structure was put in place to support the investment
in Rainprop by the empowerment shareholders. The Department of Trade and Industry will make monthly payments to Rainprop in terms of the public-private partnership concession agreement, which will cover costs of providing the facilities management service and servicing the capital raised.
The majority shareholding (55%) in Rainprop consists of companies controlled
by historically disadvantaged enterprises, including Rainbow Construction, Prop
5 Corporation, Zwelinzima Holdings, Women’s Development Bank Holdings and The
Association for People with Disabilities.
The other shareholders are Rebserve Facilities Management, Propnet, WBHO Construction, Atterbury Property Holdings and Parkdev SA.
The project consists of a design and construction phase and a facilities management phase. The design and fast track construction phase, expected to be
complete within the next 12 months, is a partnership between Atterbury, Parkdev, WBHO, Rainbow Construction and Zwelinzima.
Rebserve, Propnet, Prop 5 Corporation and Zwelinzima will provide facilities management over the remaining 24 years of the 25-year concession period. They will be responsible for the operational and life cycle management, which includes replacement, maintenance and upgrading of assets during the concession period. –I-Net Bridge