Durban - Gateway Construction, a powerful new consortium, had been awarded the R700 million contract for the construction of Old Mutual's massive R1,4 billion Gateway retail and entertainment centre near Umhlanga, north of Durban, Old Mutual said at the weekend.
Old Mutual Properties is the property arm of Old Mutual, which is expected to complete its demutualisation by the end of the year.
The division, which has proposed investments in retail properties totalling R6 billion, is upbeat about retail despite the general malaise in the sector.
The consortium comprised listed groups Group Five Building East, Grinaker Construction and Wilson Bayly Holmes-Ovcon.
Peter Ridl, the chairman of Gateway Construction and the managing director of Group Five Building East, said the consortium was thrilled with the contract.
"Gateway represents the biggest contract we have ever undertaken from a combined point of view," Ridl said. "We believe it will provide a fillip to a building industry in KwaZulu Natal, which has been in a decline over the past several years."
Gateway would create 3 000 long-term jobs and more than 5 000 direct jobs during the construction phase.
He said the project had been divided into five separate contracts, each valued at between R80 million and R100 million.
A large component of the project's subcontracting work would go to local firms representing a strong empowerment flavour.
Gateway, which would have 119 000m2 of retail and entertainment space, would be one of the single biggest retail and entertainment environments in South Africa, dwarfing KwaZulu Natal's only other regional mall, the Pavilion Shopping Centre.
On completion, scheduled for October 2001, the centre would have 300 outlets with a wide array of retail shops and entertainment venues.
Howes said piling work for the project, which would begin today, would be done by Esor Construction over a period of six months. The main contractors would move on site on April 1.
Howes said the intention was that Gateway would become the focal point of the area in much the same way that the development of Sandton shopping centre had stimulated the growth of Sandton City.
During the course of the contract R30 million worth of road upgrades would be undertaken in the surrounding area. These would include new interchanges, the addition of road lanes and the general upgrading of the area's road network.