A progress report to the Bulawayo City Council (BCC) town, lands and planning committee by Terracota reveals that the company has been severely affected by a number of challenges such as the increase in interest rates, inflation and currency changes resulting in it re-designing some parts of the project to cut costs.
“Notwithstanding the challenging environment, works on site have been progressing at an acceptable rate. Due to the prevailing economic situation, the developer has amended certain design elements to mitigate against higher costs that can’t be passed onto tenants,” Terracotta’s report read.
“As with any capital project, debt funding is a critical component to fund the project to final completion. When civil works commenced, interest rates were between 10% and 12%.
However, these were suddenly increased to as high as 50% as part of the ongoing fiscal reforms.
“This has expectedly had an adverse effect on the phase 1 project programme to completion,” the report read.
Construction of the mall by the South African engineering firm took off last year