PSPF to purchase E50million ESASCCO Building

By Phephile Motau

Two decades after the beginning of the construction of the Eswatini Association of Savings and Credit Cooperatives (ESASCCO) commercial building, it will finally be completed. The building, which was touted to change the face of the capital city, has become an eyesore and a perfect haven for illegal activities, including gambling and a hotspot for drug lords.

 It will come as a relief to many stakeholders to learn that the Public Service Pensions Fund (PSPF) has shown interest in purchasing and completing the building. According to an impeccable source, the PSPF will complete the structure and lease it out to the government. Another separate building will be built for ESASCCO as part of the deal.

Through its highly placed sources at PSPF, the Eswatini Financial Times has reliably established that the process is at an advanced stage and the parties are still undergoing some legal discussions. This publication was told that the building would cost over E300 million to complete. However, PSPF CEO could not be drawn for comment as he referred all questions to Elkan Makhanya, Director of Corporate Services.

Construction of the seven-storey structure started in 2002 and when construction stopped, at least E55 million had been spent. Construction was halted in 2013 after the failure of ESASCCO to pay the contractor a bill of E13 million. And since then, it has remained a sad spectacle at the Capital City’s Central Business District, atop the bus terminus. 

The building had been positioned as the preferred business, commercial, residential and lifestyle area in Mbabane, but everything stalled after the association ran out of money to complete it.

Principal Secretary in the Ministry of Housing and Urban Development Clifford Mamba confirmed that the PSPF would finance the completion of the building. The ministry was tasked by the government to assist in getting financiers of the building. 

Mamba said the PSPF was working on the processes to begin the construction of the building and soon. Mamba explained that the government would not put any money into this project but was only facilitating the whole process.

He said there have been several attempts by the government to take over the building, but they had failed. Mamba said initially, the government wanted to use it for offices of the Ministry of Finance and other ministries. According to Mamba, this was one of the plans that were concocted by the former Prime Minister Sibusiso Barnabas Dlamini-led Cabinet whose term ended before the deal could be sealed.

“It will now be a PSPF building, and the government will be tenants to the building. It will house certain departments of the government,” Mamba said.

Commissioner of Cooperatives Nonhlanhla Mnisi also confirmed that a financier for the building has been found. She, however, insisted that they would only talk about this matter when the time is right. She could not be drawn to comment further comment.

Mamba also confirmed that ESASCCO would also be getting a new building as part of the deal, so, it would be a win-win situation for everyone. He said the construction process was expected to start in the coming two months.

Several other companies have over the years shown interest in investing in the building and when it was evaluated in 2012, it was said to be worth between E40 and E50 million.

The project owners spent over E55 million, which was spent on building materials and other related amenities.

The main contractor was Du Van Developers, who abandoned the site located on Portion 3161 of Mbabane following the failure of the cooperative society to pay for work done.

The project commenced in July 2002 with a project budget of E29.5 million. Construction was suspended in November 2003 due to budget overruns and non-payment to the contractor. The project was again stalled by more cost overruns and the contractor eventually moved his plant from the site and no works have been carried out since then.

The building was originally planned to house offices, but plans changed after construction was stalled.

Project management consultants of the ESASCCO Centre suggested new designs for the building.

The managers suggested that to ensure maximum returns on investment, the building should be multi-faceted. The structure was renamed the SASCCO Centre Regeneration Project. The consultants promoted a business model that would combine residential, retail and business areas.

This was to ensure that the business goals are achieved.

The building’s scope was then changed to house a hotel, recreation centre, retail shops, offices and restaurants, among others. 

ESASCCO members stopped contributing to the construction of the association’s massive building.

According to previous reports, Grace Dludlu, then acting Chief Executive Officer said members were asked to stop making contributions after it was realised that they were not enough and a major financier was required for the project.

She reportedly said the order was issued to members immediately after the contractor pulled out of the construction site following the association’s failure to pay an E13 million bill for the work that had already been done.

The Minister of Public Service, Mabulala Maseko said the matter was still under consideration by the Board of Directors and the Investment Committee of the organisation. He said it had not been formally communicated to him and hence he could not comment about it any further.

The organisation has many property investments. They are currently involved in the construction of residential apartments worth about E99.5 million.

Recently, minister Maseko when presenting the new Board of Trustees of the PSPF said the new board should make good investments”. He added that it was their job to make sure that the pensioners’ money was well taken care of. He further challenged the board to make returns of at least E35 billion, as the previous board had made returns of E30 billion.

According to the Fund’s Annual Report for the Financial Year 2020/2021 Fund performed exceptionally well in the year resulting in Fund assets growing to reach E28 billion (March 2021) from E22 billion (March 2020). Amongst the Fund’s properties are Sibekelo Building, Hilton Garden Inn Hotel, The New Mall, and residential estates.

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