20 May 2020

Abandoned Construction Projects in Africa

by | posted in: Construction Chat | 0

An abandoned construction project can be defined as a project which has been 1) totally abandoned, or 2) indefinitely delayed. Abandonment may happen at any stage of a project life-cycle and incur a significant amount of loss.

There are various reasons why construction projects are abandoned:

  • Inadequate planning
  • Inadequate finance
  • Inflation
  • Bankruptcy of Contractor
  • Variation of project scope
  • Political factor
  • Delaying in payment
  • Incompetent project manager
  • Wrong estimate
  • Faulty design
  • Inadequate cost control
  • Change of priority
  • Unqualified/inexperience Consultants
  • Administrative/legal action
  • Disputes
  • Natural Disasters

The effects of construction projects are mainly:

  • Unemployment
  • Bad image for government
  • Government sector underdevelopment
  • Slow economic growth
  • Financial institutions lose confidence in the state
  • Discourages investment
  • Loss of revenue by state

Here are a few construction projects that have been abandoned and the reasons:

1. The Ghana-STX Building Project, a $10 billion housing project – The project was supposed to lead to the construction of 200,000 houses in Ghana for over 5 years. From research findings, causes of failure of the project were due mostly to disunity, lack of effective governance and project control. Corruption was also a feature.

2.  Mususu Kalenga Building in Zambia – The structure was built at a cost of K400 million by the Zambia State Insurance Corporation and sold to Royal Lutanda Company Limited at K800 million in 2000. The 11-storey building has remained abandoned for over 25 years. There is no indication as to why it was never completed.


3.    900-1000MW Coal Power Plant at Lamu in Lamu County, Kenya – Kenya’s National Environment Tribunal revoked the license granted to the Power Company to build a coal power plant, due to the companies failure to do a thorough environment and social impact assessment (ESIA) that met the requirements of the law.

4.    Construction of a 20,000 seat capacity stadium in Mongu District in Zambia – The government abandoned its plans for the Mongu Stadium most likely due to lack of funding.

5.    Grand Police Bay Hotel, Seychelles – There was a lot of backlash regarding this project and the government decided to not proceed with its plans.

6.    Al-Noor Tower, Casablanca, Morocco – The 540m high skyscraper was to include a luxury hotel,  offices, apartments, an art gallery and a luxury arcade of shops. The client, Middle East Development LLC decided to not proceed with the development stating that a tower if this size was not an appropriate project for Morocco at the moment.

7.    Hope City – A mixed-use development in Ghana – With a downturn in the economy, relocation of the project, and erratic power supply, work on the project never got underway. RLG Communications, the Ghanaian tech company which was supposed to be spearheading the project was itself caught up in various scandals. To date, nothing further has happened with this development.

8.    Pinewood Uranium Project, Tanzania – Kibo Mining (AIM: KIBO; AltX: KBO) announced on 24th February 2017 that it will cease activities at its Pinewood and Morogoro uranium coal and gold projects with immediate effect. The reason behind this strategic choice is in that both Metal Tiger and Kibo Mining have experienced considerable success in other projects of their business portfolio and this has led to these interests becoming the absolute focus of each company.

9.    Construction of sewers, roads and infrastructural services for 360 plots in Kazungula Village and at Nnyungwe area in Kasane, Botswana – Government mysteriously abandons the P80 Million tender as works near completion and this sparks corruption rumours.

Sources:
Research Gate – Abandoned
Research Gate – Government
PM World Library
The Gazette
L2B

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About Nadia Milln

My journey at Leads 2 Business all started back in September 2014 as a content researcher in the Daily Tenders Africa Department. In March 2018 I was promoted to content researcher in the Private Project department. I am a fun loving, bubbly person and mom to a beautiful baby boy who is the absolute light of my life.

13 Feb 2020

Abandoned Construction Sites in Gauteng – Why?

by | posted in: Construction Chat, General | 0

Abandoned Building / Construction Sites In Gauteng, Why?

A building is considered abandoned after just thirty days of being left empty. There are many abandoned building projects throughout South Africa, these buildings are not being utilized due to various reasons. An abandoned building is one that is considered to be empty and/or  in disrepair.

There are many setbacks and issues that may occur when building and developing a project that should be taken into consideration before the project even starts, most of the time projects and construction sites are abandoned because of the following reasons :

1.) Financial Problems.
2.) Due To Inexperienced Developers.
3.) Mismanagement And Mistakes.

Abandonment of buildings and construction sites could be a potential problem for South Africa due to the financial constraints within the construction and building industry. Tenders are being awarded to construction companies that are battling and have no funds to continue with the projects and this is yet another reason why construction is not being completed.

Here are a few buildings in Gauteng that have been abandoned and the reasons are as follows:

1.)  Khutsong Clinic – As per the contractor’s Client liaison officer, the Gauteng Department of Infrastructure Development has not paid the contractor and the contractor is experiencing financial difficulties. This project cost has been estimated at R65 Million.

2.) Carlton Hotel – The Carlton Hotel was considered to be one of the most prominent hotels in South Africa, hosting big names such as Nelson Mandela, Whitney Housten and Hillary Clinton. The hotel has been untouched and standing for over 20 years due to a lack of maintenance. The Carlton Hotel has over 600 rooms over 31 floors, and it closed its doors in 1997. Thereafter Transnet bought the once luxury hotel and even though there as been various plans floating around, the hotel still remains empty.

3.) Kempton Park Hospital –  It has been said that Kempton Park Hospital had been closed due to a shortage of patients, however in 2006 there was talk about re-opening the building and to renovate it, thus taking pressure off of Tembisa and Edenvale Hospitals. Construction was supposed to start in March 2013 and was meant to be completed in July 2014,  however contractors never started the work which was estimated have cost R 244 Million.  In 2017 it was reported that R127 million Rand had been set aside to demolish the Hospital.  However to date, Kempton Park Hospital still stands empty.

A large number of buildings are left empty and these buildings are not just little three-story buildings that are implicated, they are skyscrapers and huge 210-roomed hospitals where space has just been wasted. Tenders are being awarded to new development when these older and abandoned buildings and structures should be given preference and utilized before we build more. building    The buildings that stand empty are targets for criminal activities to take place and by standing empty and unused, they drop the value of the surrounding buildings and the area in general. If there is no-one monitoring the buildings or if there is no security in place, then this allows for squatters to move in and take over the building and also allows for pests to run around freely.

Incomplete construction has cost Gauteng over R620 million and it has been reported that the Gauteng Legislature’s Portfolio Committee on infrastructure development will be clamping down on “poor contractors’ workmanship” as there are tenders that have been awarded in 2017 that have not even started for renovating or building projects and this leaves 40 companies implicated. The projects pertain to new clinics, seven new schools and other important renovations that need attention in order to help the citizens of South Africa. Since this money has been paid over to the contractors, it is believed that fraud and corruption have been suspected.

Gauteng has identified a new “low-cost housing” opportunity and is allowing the private sector to turn them into affordable housing, The city is hoping to upgrade 2000 to 4000 informal settlement homes. This is a great way for the government to give back and I am sure this is exciting for the residents that stay in these buildings. Let’s hope this project materializes.

Sources:
Infrastructure News
Traveller24
Informal City
IOL
Business Insider
Flickr
Business Tech
City Lab
Times Live
Research Gate

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About Stephanie Hull