Tshwane slashes Chantelle construction budget amid contractor challenges
The contractor failed to meet the deadlines and has ceased operations.
In a significant development, Tshwane has substantially reduced the budget for the Chantelle Housing Project in the north of Pretoria North.
Initially set at R52.8-million, the budget has been scaled down to R20-million due to several challenges primarily associated with the contractor’s performance.
According to metro spokesperson Selby Bokaba, the reduction has also led to a decrease in the annual target for housing units and an extension to the overall completion timeline.
“The primary reason for the budget reduction is the slow progress by the contractor responsible for the project.
The contractor failed to meet the agreed timelines, affecting both the financial and non-financial targets outlined in the project’s business plan.
This underperformance necessitated a reassessment of the budget to reflect on the contractor’s capabilities and the realistic progress of the project,” said Bokaba.
Bokaba said the annual target for building Chantelle social housing units has been decreased.
He said the adjustment aligns with the contractor’s performance and resource availability.
“By setting more realistic targets, the metro intends to ensure quality and timely completion of the units within the available budget and resources.
As of now, the project’s main contractor has ceased operations, and the metro is closing out the project,” he said.
Out of the 156 units planned for Phase 1A, only 82 have reached shell level.
“The reduction in budget and targets has extended the overall timeline for the project completion, which has faced numerous challenges including financial constraints and logistical issues.
The project has also seen a 140% increase in the cost of contracted services,” said Bokaba.
The goal is to make housing affordable and cater for those earning between R1 850 and R22 000 per month.
Bokaba said the increase in the cost of contracted services is due to the outstanding security services to ensure compliance with the Social Housing Regulatory Authority (SHRA) accreditation requirements regarding staff capacity.
“The Housing Company Tshwane (HCT) has to outsource these services, contributing to the rise in cost.
To manage and justify these increased costs, HCT plans to continue outsourcing security as more buildings are managed.
The decision to outsource stems from the need to meet SHRA accreditation requirements and ensure the safety and security of the properties.”
Despite the budget reduction and lowered targets, HCT remains committed to addressing the housing needs of low-income residents.
Bokaba said the plan to deliver 1 098 units at Chantelle remains intact.
“Once the project and final account have been closed, HCT will initiate procurement processes to appoint a new contractor to restart the project.
To mitigate potential negative economic impacts due to these changes, HCT has implemented initiatives such as prioritising local labour, supporting small and medium-sized enterprises through subcontracting opportunities, and launching community development programmes that provide skills training and business support,” said Bokaba.
He said other social housing projects are in the pipeline to compensate for the decrease in units at Chantelle.
“We are applying lessons learned from the Chantelle project to other ongoing and future projects like Timberlands and Townlands.
Robust mechanisms in contractor procurement, project management, financial planning, and risk management strategies are being implemented to prevent similar issues in future projects.”
Chantelle is designed to cater to a variety of accommodation needs.
It will consist of 930 two-bedroom, 112 bachelor and 56 studio units as well as a variety of amenities and services for residents.
These include playgrounds and sports fields, as well as landscaped areas for residents to enjoy.
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