Vision for the Foreshore district development in Cape Town sparks debate: from 'fantasy' to next-generation investment
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IOL
iol.co.za

Vision for the Foreshore district development in Cape Town sparks debate: from 'fantasy' to next-generation investment

Cape Town Mayor Geordie Hill-Lewis presented a plan to transform unfinished highways in the Foreshore district into a new complex, including a bridge link, a tunnel, a waterfront, and a mixed-use residential area.

The proposal to complete the unfinished expressways in Foreshore has triggered political criticism regarding funding, costs, and housing plans, while proponents of transport infrastructure view it as an opportunity for future generations.

The Foreshore Precinct project envisions the creation of a new bridge connection, an underground tunnel, parks, a harbor promenade, affordable housing, and a new quarter covering approximately 15 hectares around the unfinished highways. Mayor Geordie Hill-Lewis noted that the project could ultimately cost 'many billions of rand,' although an exact figure has not yet been disclosed.

Congestion Problem

Cape Town mayoral candidate and General Secretary Brett Herron called the project financially unrealistic. He stated that engineers and financial specialists have always considered it impossible to fund the completion of the Foreshore expressways or an alternative solution for the city center of this scale.

Herron accused Hill-Lewis of presenting a 'fantasy disguised as a plan,' stating: 'There is no plan. Only a glossy brochure.' He also pointed to significant engineering risks associated with tunneling under reclaimed land, including soil instability and groundwater. Citing international infrastructure projects, such as major tunnel construction in Boston, Herron emphasized that while it is technically feasible, the probability of its financing is low, and the risk of cost overruns is very high.

Funding and Engineering Risks Under Scrutiny

The City stated that the proposal is at the conceptual stage, and funding agreements will be developed as planning progresses. City representative Lutando Tikhali-bongo reported: 'The funding question will be resolved as the project develops from vision to reality. This project is still in the conceptual stage and will take several years to implement.'

Tikhali-bongo added that the City is exploring innovative financing models to ensure the project's sustainability. Another unresolved issue is access to port-controlled land. The City indicated that Transnet National Port Authority is a key stakeholder, and discussions are ongoing. Furthermore, the City did not specify how many affordable homes would be built, only mentioning that affordable housing would be part of the second phase of the proposed project, without setting a target.

City Claims Funding and Port Access Remain Unresolved

Herron insisted that any use of public land must include a substantial portion of affordable housing. The City has not yet provided information on the fate of homeless people living in parts of this area.

Gareth Ramsey, founder and lead engineer of the Capetrain Express project, welcomed the proposal as a 'next-generation investment' in the lower central business district. He noted that the development could support transit-oriented development, improve mobility, and create better connections across Cape Town. He also responded positively to the possibility of preserving space for a future railway line.

According to the proposal, the existing highway will be expanded and connected to Helen Suzman Boulevard by a new bridge over Buitenghart Road. A later phase will include an outgoing tunnel near Duncan Road, which will connect to the N1 and N2 routes. Subsequently, the existing elevated outgoing highway will be dismantled, making way for parks, development, and a waterfront. Public participation is expected as planning evolves. If approved, construction could begin before the end of the next council term and continue for more than 15 years.

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Growth in private capital expenditure in India, but the reasons for project problems are changing
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business-standard.com

Growth in private capital expenditure in India, but the reasons for project problems are changing

The prospects for private capital expenditure in India show strengthening, however, the factors leading to difficulties in projects are changing. Currently, the main reasons for problems are market conditions and promoter interests.

Recent announcements of new projects have significantly increased. Previously, the Reserve Bank of India (RBI) predicted that private sector capital expenditure would amount to 3.2 trillion rupees in the fiscal year 2027, which is higher than the figure of 2.6 trillion rupees in the fiscal year 2026. Meanwhile, management-related issues, such as land acquisition and obtaining permits, accounted for only 20 percent of problematic projects in fiscal year 2026, compared to 60 percent in fiscal year 2014. In fiscal year 2026, almost 72 percent of problematic projects were due to adverse market conditions and promoter interests.

These findings are based on an analysis conducted by the National Institute of Public Finance and Policy (NIPFP) within an analytical note covering private sector projects from fiscal year 2014 to 2026. The study showed that the number of new project announcements increased from 4 trillion rupees in fiscal year 2014 to 35 trillion rupees in fiscal year 2026.

Expansion of the private project portfolio

The NIPFP analysis demonstrated an increase in the number of new private sector project announcements from 4 trillion rupees in fiscal year 2014 to 35 trillion rupees in fiscal year 2026. The total value of all announced new projects more than doubled: it grew from approximately 56 trillion rupees in the period from fiscal year 2021 to 2023 to 104 trillion rupees in the period from fiscal year 2024 to 2026.

Meanwhile, the share of problematic projects has decreased. Their share of the total unfinished projects reduced from a peak of 4 percent in fiscal year 2014 to less than 0.1 percent in fiscal year 2026. In monetary terms, problematic projects decreased from a peak of 3.3 trillion rupees in fiscal year 2014 to 14,000 crore by the end of fiscal year 2026.

NIPFP defines problematic projects as those classified as 'suspended' or 'abandoned'. A suspended project is one withdrawn before implementation begins and can be resumed later, while an abandoned project is one withdrawn during implementation with no indication of resumption.

The RBI also reported an increase in the private capital expenditure portfolio. In its September bulletin, the central bank estimated private sector capital expenditure at 3.2 trillion rupees for fiscal year 2027, compared to 2.6 trillion rupees in fiscal year 2026. The total project value reached a record 4.4 trillion rupees in fiscal year 2026, higher than the figure of 3.7 trillion rupees in fiscal year 2025. The central bank noted that 'the investment outlook is expected to remain healthy in the long run, although increased global uncertainty is likely to temper investment sentiment.'

Reasons for project problems

The NIPFP analysis showed that the nature of project problems has changed over the last decade. In fiscal year 2014, management-related issues, such as land acquisition, environmental permits, and supply of fuel or raw materials, accounted for 60 percent of problematic projects. This share decreased to 20 percent by fiscal year 2026.

Simultaneously, NIPFP attributed 80 percent of problematic projects in fiscal year 2026 to the category of 'Other problems', which includes financing constraints, market and economic conditions, as well as operational difficulties. Within this category, adverse market conditions and lack of promoter interest were the main factors over the last three years. Together, they accounted for almost 72 percent of problematic projects in fiscal year 2026.

NIPFP indicated that previously, management issues affected private investment through delays related to land acquisition, regulatory permits, and fuel supplies. It linked the reduction of such problems to the acceleration of environmental and legislative approvals, single-window approval systems, land acquisition measures, reforms in the coal sector, and the Insolvency and Bankruptcy Code.

Where private investments are going

NIPFP found that the private investment portfolio is becoming more concentrated in developing sectors. The share of private investments directed towards renewable energy, traditional energy, and ITES increased from approximately 25 percent in the period from fiscal year 2021 to 2023 to 38 percent in the period from fiscal year 2024 to 2026. At the same time, traditional industries such as transport services, two- and three-wheelers, and tourism showed a decline in their share.

In the power, ITES/data center, other electronics, and steel sectors, about 55 percent of private investments was directed in the period from fiscal year 2024 to 2026, compared to approximately 45 percent in the period from fiscal year 2021 to 2023. NIPFP noted: 'The growth of artificial intelligence and cloud computing increases the demand for data centers, electricity, semiconductors, and digital infrastructure. Supply chain diversification also supports electronics and chip manufacturing.'

The institute also stated that the energy transition opens up opportunities in areas such as biofuels, compressed biogas, and coal gasification. Government support includes schemes such as the production-linked incentive scheme, the IndiaAI mission, and the Semicon India program.

Credit is also moving towards investments

Bank lending data indicates an increase in financing activity. According to NIPFP, the increase in industrial bank credit reached 6 lakh crore in fiscal year 2026, which is the highest expansion in the period from fiscal year 2014 to 2026. The institute added that 'base metals, machinery, chemical industry, textiles, and food processing provided about 56 percent of the credit growth in the non-infrastructure sector in the period from fiscal year 2024 to 2026.'

Infrastructure lending reached an eight-year high of 1.2 trillion rupees, largely driven by the energy sector. NIPFP reported that the growth in infrastructure lending exceeded its previous level by more than 3.3 times, while the non-infrastructure sector showed a growth of 1.8 times in fiscal year 2026.

New risk for private capital expenditure

The reduction in internal management constraints does not eliminate project risks. NIPFP emphasized that current risks are increasingly related to market conditions, geopolitical events, input costs, and supply chains. The institute noted: 'The conflict in West Asia led to a 56 percent year-on-year drop in private investment announcements in March 2026.'

The report also contains a warning that the increase in investment announcements does not necessarily translate into completed projects. The study states: 'If a project is not commissioned and production has not started, the risk of suspension or write-off remains.'

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