“We facilitated all the processes within government, we approved all the plans. We dictated the priorities, [including] residential development, education and the skills development centre,” Nomvula Mokonyane, Premier of Gauteng told CNBC Africa.
The development of Modderfontein New City, located between the O. R Tambo International Airport and Sandton, has an investment plan worth 84 billion rand.
Chinese company Shanghai Zendai will be the primary investor heading the project. Shanghai Zendai consists of three major businesses: urban development, tourism development and financial resource development sectors.
(READ MORE:Commission approves modderfontein land sale)
Johannesburg is already an infrastructure hub in Africa and the prospects of the Modderfontein New City initiative will provide opportunities for South African companies.
“We will invite many investors and divide the project into many sections: residential, education, commercial and industrial. We encourage partnership to strengthen the project,” Zhikang Dai, founder and CEO of Shanghai Zendai, explained.
AECI, an explosives and specialty chemicals company based in South Africa, sold the total area of land to Shanghai Zendai for a billion rand. The purchase was also approved by the South African government. The development will take an estimated 20 years to complete.
“The benefits for South Africans go beyond the sale of land [as] people did not lose their jobs. Property developers [usually] threaten people with retrenchment. This was a good deal by AECI,” added Mokonyane.
(WATCH VIDEO:Gauteng's future development goals)
However, some local investors are weary about Shanghai Zendai’s low ranking on the Moody’s credit rankings and the major finance debt which they acquired for the project.
Dai nonetheless believes that they have the capacity to complete the task within the estimated period.
“We are confident, in the next six months or nine months the ranking will improve. We have [already] produced products for the market for the upcoming months,” added Dai.
BY: THANDO MATUTU