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South Africa Gets to Work on its First ‘Smart City’

Work is beginning on a R84 billion “smart city” project in Modderfontein, South Africa, just east of Johannesburg. The developer, Chinese investment firm, Shanghai Zendai, plans on developing 1,600 hectares of land into an international commercial hub that it hopes will one day rival New York, Hong Kong, and London.

Urban planners and developers are increasingly conceptualizing “smart cities” as they seek innovative ways to address population growth and the attendant increase in urbanization. The term “smart city” remains somewhat undefined but, at its core, it generally involves urban areas that incorporate emerging technologies to do everything from administering city services to improving education.

Shanghai Zendai plans on developing the Modderfontein “smart city” over the next 15-20 years and will incorporate the “smart” concept by building digital connectivity directly into the development. According to Anthony Diepenbroek, CEO of Zendai Development SA, the developer is focused on more than world-class information and communications technology. It envisions the use of smart technology to reduce congestion, pollution, and energy consumption, as well as to deliver services such as health care, water, waste, and education. PCCW Global, the Hong Kong-headquartered international operating division of telecommunications service provider, HKT, will provide the technology.

The Modderfontein development will include between 30,000 and 50,000 housing units, and may include a convention center, shopping, and a theme park, as well as educational, medical, and sports facilities. Located between the central business district of Sandton in Johannesburg and the OR Tambo International Airport, the site is on the Gautrain route and will add a Modderfontein station. It is currently projected to house 100,000 residents and will likely become a hub for Chinese firms investing in sub-Saharan Africa.

Shanghai Zendai purchased the 1,600 hectares of land for the development from South Africa’s chemicals and explosives company AECI for R1.06 billion in 2013. It plans on investments of approximately R84 billion over the next fifteen years. The transaction represents one of the largest single foreign direct investments in South Africa. Zendai anticipates that the completed development will create between 100,000 to 200,000 white- and blue-collar jobs. Based on the 15-year development period and developer data, the Bureau for Economic Research (BER) anticipates that the construction phase will contribute R13.5 billion to the economy and more than 21,000 jobs annually.

©2020 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume V, Number 54


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