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Towards the Establishment of the Special Purpose Vehicle for Land PORTFOLIO COMMITTEE (TRANSNET/PROPNET/SPOORNET LAND) 13 September 2006. Structure of Presentation. Ministerial Engagements Disposal of Non-Core Assets Consultative Processes Process of Negotiations (Propnet)

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Structure of Presentation

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  1. Towards the Establishment of the Special Purpose Vehicle for LandPORTFOLIO COMMITTEE(TRANSNET/PROPNET/SPOORNET LAND)13 September 2006

  2. Structure of Presentation Ministerial Engagements Disposal of Non-Core Assets Consultative Processes Process of Negotiations (Propnet) Incidental Processes 3. Way Forward

  3. Ministerial Engagements Disposal of Non-Core Assets: Properties to be donated to NDoH Zero Value (Consumption costs to be borne by the NDoH managed SPV) Properties to be Acquired: Book Value Price (Includes pricing from R1-00 to Book Value amount); Market Related Price – Location of Property; Collaborative Development Initiatives Facilitated and Managed by the Property Owner

  4. Ministerial Engagements Follow-up Consultative Processes: NDoH appointed Land Task Team; Released List of Properties by DPE (Propnet); Desk-Top Exercise – Analysis of the Released List and identification Process; Property Verification – Task Team Members Submitted Recommendations, to the Minister, on land and landed properties found suitable for integrated human settlement development

  5. Process of Negotiations Department of Public Enterprises: State Owned Entities (SOEs) under DPE Management. Properties to be disposed of by the following SOEs: Propnet – 607 listed properties; Transnet – List outstanding; Spoornet – List outstanding.

  6. Process of Negotiations… Propnet Land and Landed Properties: Circulated list covered - 607 Non-Core Assets; Total depicted extent – 8614, 3592 ha Total Book Value – R928 997 564-00 Propnet Properties were verified by the Task Team in December 2005 and January 2006; Current Negotiation: Draft Deed of Sale Agreement is with NDoH 127 Properties ready for acquisition by the SPV; Total Book Value – R132 000 000-00 Propnet Evaluations - R210 496 638-00 Variance - R 78 496 638-00

  7. Process of Negotiations… Propnet Land and Landed Properties: Offer to Purchase: Letter of Offer was sent to Transnet CEO (cc DPE) – July 2006; Minister’s directive: Propnet must still indicate extent of properties to be donated to the SPV Propnet must still indicate extent of properties to be sold at Book Value Price; Propnet must still indicate extent of properties to be sold at Market Price (The submitted Propnet quote of R201 496 638-00 is market related); Propnet Board is still expected to respond to NDoH request – Zero vs. Book Value vs. Market Price

  8. Process of Negotiations… Propnet Land and Landed Properties: • City Centre Properties have been largely shifted to the category of CORE Properties for DPE – SPV had limited access; • Most of the 127 properties, although ideally located for integrated housing development, they are still in the periphery of places of work and/or City Centres

  9. Process of Negotiations… Propnet Land and Landed Properties: • Deed of Sale: • Draft Deed of Sale has been submitted to NDoH (Operating Costs – NDoH) • Outstanding Valuations by NDoH (SPV) • Capital Funding: • Motivations will now be submitted to DLA; • Compliances Issues will be met by SPV

  10. Process of Negotiations… • Transnet Land and Landed Properties: • List to be submitted to the NDoH (SPV) before end of September 2006; • Spoornet Land and Landed Properties: • List to be submitted to the NDoH (SPV) before end of September 2006; • Process of verification and Negotiations will be embarked upon soon thereafter.

  11. Incidental Processes • Confirmation offer Letter - Propnet: • Zero Pricing – Donation of Property and incidental holding management costs ; • R1-00 to Book Value Costs; • Market Related Costs • Second Batch of well located land and landed properties: • Propnet still busy with valuations and confirmations; • NDoH verified further properties and submitted those to Propnet; • Collaborative Development Opportunities: • Key Areas allowing NDoH participation is yet to be finalized by DPE. • Signed Deed of Sale Agreement – NDoH Date • Capital Programme and Transfer of Properties to the SPV.

  12. Way-Forward • Noted Extent of Propnet Land to be disposed to SPV; • Book Value Pricing of 127 Properties – Comments; • Market Related pricing by Propnet – Comments; • NDoH SPV will be a wholly owned State Entity, so is Propnet: • Desired Capital by Transnet to fund planned Capital Projects over the next five (5) years; • Scarcity and/or expensiveness of well located land and landed properties – Assistance by Propnet • Core to Both Public Entities: • Off loading of Non-Core Assets – Core to NDoH • Purchasing of Non-Core Assets – Core to Propnet

  13. REALEBOGA

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