BCC pulls plug on US$60m Egodini deal

THE Bulawayo City Council (BCC) has resolved to terminate Terracotta Trading Private Limited’s US$60 million Egodini Redevelopment Project citing prolonged implementation failure as only 11 percent of works have been done since the signing of the deal in 2015.

The South African contractor won the tender to redevelop Egodini 10 years ago culminating in the closure of the Basch Street Bus Rank and the relocation of vendors in 2016.

The closure of Egodini has been blamed for the congestion in the city’s central business district and chaos caused by illegal taxi operators and unregistered traders.

While a section of Egodini was re-opened last year, this has failed to arrest the situation as more public transporters resist using the facility citing business viability concerns, amid stiff competition with illegal operators who intercept passengers from undesignated points in the city centre.

Council and key stakeholders have expressed frustration over the lack of substantial progress in the development of the project.

This has prompted the local authority to seek to cancel the lease agreement with the contractor, which was signed on October 5, 2015, for the upgrading of the Egodini into a modern transport hub and shopping mall.

“The tenant, Terracotta, was expected to develop properties on the basis proposed in their tender submission at a cost of sixty (60) million United States dollars sometime in 2023.

“Council issued a warning for notice to terminate the contract due to the non-performance of the contractor, Terracotta, who had been on site for a period spanning nine years,” said the council in its latest minutes issued yesterday.

“There was no development by then besides advance preparatory works and demolishing.”

The council said after issuing the warning Terracotta moved in to work on the taxi rank portion of the redevelopment, termed Phase 1A leading to BCC cancelling the notice to terminate. It said this led to the rank being commissioned last year in January, with the contractor committing to proceed with the works and move to phase 1B.

“The developer, however, abandoned the site in February 2024 with works reaching an abrupt stop. There were still development adjustments to be undertaken by the contractor to efficiently operationalise phase 1A, and these had remained unattended to by the contractor, which was primarily the public transport taxi rank and 400 vending bays,” said the local authority.

“The project remained at 11 percent as there had been no work at all.”

Despite efforts made to communicate with Terracotta on the non-activity at the site and adherence to contractual obligations, council said the contractor has not responded.

The local authority said it was then forced to issue a second termination of notice, which still stands to date.

“These issues had been deemed as operational issues, which would not warrant the contractor to abandon the site. The contractor was still adamant to return to the site leaving council with no option but to re-issue the Notice of Termination to Terracotta Trading (Pvt) Ltd,” said the local authority.

“During the month of December 2024, the department proceeded to request the legal office to start processes for the issuance of the termination notice.”

According to council, the contractor had submitted drawings for Phase 1B, which include the bus rank, fuel station, extension of the taxi rank and some anchor shops, and the department reviewed these and issued comments for Terracotta to attend to.

“The notice to cancel the Lease Agreement had since been issued to the developer, Terracotta Trading (Pvt) Ltd,” said the city council.

Meanwhile, during the discussion councillors requested that information be shared pertaining to the project in order for them to be able to respond to residents accordingly. One of the councillors further suggested that a meeting should be held between councillors and Terracotta.

In response, the Town Clerk Mr Christopher Dube advised that a notice to cancel the lease agreement had been issued according to the conditions of the agreement.

Terracotta is part of the 14 companies that had tendered to redevelop Egodini but has failed to get the project rolling leaving the city congested.