South Africa’s new R84 billion smart city looks nothing like what was planned

Chinese development group Zendai Developments’ plan to build a new R84 billion smart city in Modderfontein, east of Johannesburg, did not go as planned.
BusinessTech visited the site where the Modderfontein New City was to be built, and although some development is taking place, it is not close to what was envisaged.
The project dates back to 2014 when Chinese development group Zendai Developments announced its intention to build an $8 billion city.
In 2015, Zendai South Africa chief operating officer Du Wendui said market demand would drive the project.
“Twenty years ago, nobody would have imagined that Sandton would look like it does today with its multiple skyscrapers,” he said.
It promoted it as the New York of Africa with nine functional zones, including a CBD, entertainment centre, and residential and educational districts.
It would also include churches, a library, hospital and medical facilities, a sports and international conference centre, schools, and low-cost housing.
There was a strong focus on technology to make it a ‘smart city’ with the latest telecommunications infrastructure.
Zendai Developments partnered with PCCW Global, the Hong Kong-based operating division of the telecommunications company HKT, to provide technology services.
It would provide Zendai with systems development, solutions integration, and application development and management.
It would also offer telecommunications and information technology, cloud computing, and e-commerce solutions.
The new smart city was to be built over 15 years on a 1600-hectare piece of land in Modderfontein.
When completed in 2030, it would have housed approximately 30,000 families and created up to 200,000 fixed jobs for the local community.
“It will become the future capital for the whole of Africa,” Zendai’s Wendui said when he unveiled the project.
Things go wrong for the R84 billion smart city
On paper, the R84 billion Modderfontein New City sounded like a fantastic idea for creating a new commercial hub in Johannesburg.
Developing a smart city would make the most of the available land after AECI closed its explosives factory in 1994.
Before the Modderfontein New City plans, Heartland, AECI’s real estate subsidiary, began developing small pieces of land in the Modderfontein area.
However, the distance from Johannesburg and Sandton meant it did not appeal to many businesses and households.
This changed when the Gautrain was launched. The route from OR Tambo International to Johannesburg and Sandton goes straight through Modderfontein.
Zendai saw great potential, prompting the company to buy the 1,600 hectares of land for R1.06 billion.
Things did not work out as planned. Zendai and its chairman, Dai Zhikang, did not have enough money to fund the infrastructure.
Zendai and Zhikang sought property developers and investors to invest in the project, but there was insufficient interest.
Another unrelated development significantly impacted the Modderfontein New City development plans.
In January 2015, Dai announced he was selling his shares in Shanghai Zendai Property to the state-owned China Orient Asset Management Company (COAMC).
Therefore, COAMC became the controlling shareholder of Zendai and the Modderfontein New City project.
COAMC had no stomach to continue with such an expensive project and decided to sell the land.
By 2016, it had sold 17% of its shares to the Chinese real estate firm Fuxing. It sold the remaining 83% to M&T Development.
In 2017, the Competition Tribunal of South Africa approved the sale to M&T Development for a reported R1.8 billion.
Modderfontein today
BusinessTech visited the site where the Modderfontein New City was set to be built, but it did not reflect what Zendai Developments planned.
However, it was clear that the new owners, M&T Development, were pumping millions into the region with new developments.
There were many infrastructure upgrades, which included new roads, shopping centres, schools, and office parks.
Another standout feature was the numerous residential developments, which ranged from security estates to affordable housing.
Driving around the area gave us the feeling that it was an up-and-coming area which provided a good quality of life.
The new roads further showed that this was only the start and that much more development was planned for the area.
The new office parks and shopping centres showed that the developers have big plans for the region.
M&T Development is doing most of the commercial and residential developments, which shows that the company believes in the Modderfontein area.
So, although it will match the unrealistic plans to build the Manhattan of Africa, it is being developed and is attracting businesses and families.
Zandai’s Modderfontein New City plans (artist impressions)




What Modderfontein looks like today
















