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CITY OF POLOKWANE

CITY OF POLOKWANE. Funding. Total cost estimated QS =R 864 659 644 Received tender price = R 1 245 236 999. Funding. Funding from National Government R 696 776 897.00 OC TT cost estimated submitted to DG 2010 R 812 000 000.00. Estimated Shortfall and Progress to date.

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CITY OF POLOKWANE

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  1. CITY OF POLOKWANE

  2. Funding • Total cost estimated QS =R 864 659 644 • Received tender price = R 1 245 236 999

  3. Funding • Funding from National Government R 696 776 897.00 • OC TT cost estimated submitted to DG 2010 R 812 000 000.00

  4. Estimated Shortfall and Progress to date • Estimated shortfall before process re-engineering R 576 299 520.00 • Estimated shortfall after process re-engineering R 476 299 520.00 • Tender closed 14/12/2006 received 3 tenders out of 5 • Negotiation took place on 16/01/2007 with bidders to reduce cost • Final prices to be received on 23/01/2007. • Only be in a position to have the final shortfall on the 26/01/2006

  5. Prose's re-engineering • Omit aluminum facade and replace with hand-railing • Downgrading of some specifications • Reducing number of lifts • Change in seating specifications • Requested contractors to re-look at tender amounts and offering potential savings and alternatives to reduce tender price

  6. Process re-engineering (continue) • Reducing the number of electronic equipment • Alternative construction guarantees in order to reduce price • Possible saving by extending the contract period

  7. Approach to development of Stadium • Investigation to upgrade existing stadium • Old stadium upgrade extra cost to project R 48 000 000.00 • Income lost of R 750 000 per year if old stadium was demolish.

  8. Stadium Designing • Design be done in accordance with FIFA requirements • Use of elements that is maintenance free • Plans submitted to OC TT team for approval • Taking environmental aspect in consideration

  9. Treasury view point on Escalation • National Treasury will express their view point on escalation • According to newspapers report Steel increased by 20% Labour cost increase 20% Copper cost increase by 84%

  10. Reason for increasing of Tender Price • Material shortages • Skilled labour shortages • Shortage of skilled personnel in management positions • Pant and equipment shortages • Concurrent construction of stadiums • Importing of some material • Media reporting

  11. Constrains MFMA • Funds on the budget before awarding the tender • Follow the MFMA guidelines for procuring the tender

  12. THANKS

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