BCC turns down FBC proposal

Published: 11 July 2017

BULAWAYO City Council (BCC) has turned down a joint venture housing project proposed by FBC Building Society for the development of residential stands to ease the housing backlog, latest council minutes reveal.

The minutes of the engineering services committee report show that the FBC Building Society approached the local authority seeking to partner BCC in the development of 517 residential stands in Luveve high-density suburb.

FBC Building Society said it would provide funding for the project, with council coming in to provide land and technical expertise.

The bank proposed to have the stands shared with council once they are ready for sale, but city council turned down the application with a counter proposal.
In terms of council counter proposal, FBC was expected to provide funding for the provision of title survey of the stands, water and sewer reticulation, roads construction, electricity generation and outfall sewer and water mains

"FBC Building Society approached council seeking to partner council in the development of high-density residential stands. Pursuant to this approach, a proposal was forwarded to the financial institution to look and determine whether the institution would be interested in financing the development of Luveve North high-density residential project.

"In their response, FBC indicated that they would prefer a joint venture partnership, where they provide funding for the services indicated above. Council would provide land and technical expertise. Once servicing is complete, the stands would then be shared between the two parties on percentages to be determined by monetary contribution of each party," the council report read in part.

"From FBC's response, it would appear that they are not in favour of availing funds for council to implement the project. Council's thrust now is to access finance from financial institutions and service stands.

"The financial institutions would recoup their funds from serviced stands. Council in its pre-sell strategy has managed to create a reserve for servicing future stands. In view of this, the response to our proposal by FBC is not supported. It is recommended that the proposal for the joint venture with FBC be not acceded to."
- newsday