CITY OF POLOKWANE

1
CITY OF POLOKWANE
2
Funding

• Total cost estimated QS R 864 659 644
• Received tender price R 1 245 236 999

3
Funding

• Funding from National Government
• R 696 776 897.00
• OC TT cost estimated submitted to DG 2010 R 812
  000 000.00

4
Estimated Shortfall and Progress to date

• Estimated shortfall before process re-engineering
  R 576 299 520.00
• Estimated shortfall after process re-engineering
  R 476 299 520.00
• Tender closed 14/12/2006 received 3 tenders out
  of 5
• Negotiation took place on 16/01/2007 with bidders
  to reduce cost
• Final prices to be received on 23/01/2007.
• Only be in a position to have the final shortfall
  on the 26/01/2006

5
Prose's re-engineering

• Omit aluminum facade and replace with
  hand-railing
• Downgrading of some specifications
• Reducing number of lifts
• Change in seating specifications
• Requested contractors to re-look at tender
  amounts and offering potential savings and
  alternatives to reduce tender price

6
Process re-engineering (continue)

• Reducing the number of electronic equipment
• Alternative construction guarantees in order to
  reduce price
• Possible saving by extending the contract period

7
Approach to development of Stadium

• Investigation to upgrade existing stadium
• Old stadium upgrade extra cost to project
• R 48 000 000.00
• Income lost of R 750 000 per year if old stadium
  was demolish.

8
Stadium Designing

• Design be done in accordance with FIFA
  requirements
• Use of elements that is maintenance free
• Plans submitted to OC TT team for approval
• Taking environmental aspect in consideration

9
Treasury view point on Escalation

• National Treasury will express their view point
  on escalation
• According to newspapers report
• Steel increased by 20
• Labour cost increase 20
• Copper cost increase by 84

10
Reason for increasing of Tender Price

• Material shortages
• Skilled labour shortages
• Shortage of skilled personnel in management
  positions
• Pant and equipment shortages
• Concurrent construction of stadiums
• Importing of some material
• Media reporting

11
Constrains MFMA

• Funds on the budget before awarding the tender
• Follow the MFMA guidelines for procuring the
  tender

12

• THANKS