Government pension fund set to buy international airport in South Africa
The Competition Commission has given the Government Employees Pension Fund (GEPF) the green light to buy Lanseria Holdings, which controls Lanseria International Airport on the outskirts of Johannesburg.
The GEPF, represented by the Public Investment Corporation (PIC), is looking to acquire Lanseria Holdings. The commission has approved this deal without conditions.
The primary acquiring firm, GEPF, is controlled by the South African Government. GEPF is a pension fund administered for the benefit of government employees.
The GEPF already has an interest in Lanseria Holdings, the primary target firm.
Through the PIC’s wholly owned subsidiary, ADR International Airports, the GEPF owns a non-controlling interest in the Airports Company of South Africa (ACSA).
ACSA controls OR Tambo International Airport, Cape Town International Airport, King Shaka International Airport, and other airports across South Africa.
The primary target firm, Lanseria Holdings, is jointly controlled by several parties, including the GEPF. However, Lanseria Holdings is not controlled by any one firm.
Lanseria Holdings ultimately controls Lanseria International Airport, which is based on the outskirts of Johannesburg.
The government’s interest in this deal is not surprising since, for years, it has promised to create a new “smart city” for South Africans in Lanseria.
In his 2020 State of the Nation Address, Ramaphosa promised to establish the Lanseria Smart City as a “truly post-apartheid city” with homes for 350,000 to 500,000 people by 2030.
“A new smart city is taking shape in Lanseria, which 350,000 to 500,000 people will call home within the next decade,” he said.
“It will not only be smart and 5G-ready but will be a leading benchmark for green infrastructure continental and internationally.”
The first plans to build a smart city in this area emerged in 2007 and revealed that it would take approximately 25 years to build once developers broke ground.
Had construction started that same year, the city would only have been completed by 2032, two years after the timeline given by Ramaphosa.
However, the City of Johannesburg only adopted the provincial government’s plan for the development in May 2021.
Now, four years after President Cyril Ramaphosa announced his plans for this smart city, construction has yet to begin.
While Johannesburg adopted the provincial government’s plan in 2021, significant investment in infrastructure is still needed.
MyBroadband reported that the Greater Lanseria Master Plan, which includes the smart city, has been completed, and the necessary approvals for urban planning have been processed.
However, Infrastructure South Africa (ISA) reported that the human settlements component was not approved due to a lack of institutional arrangements. This has now been resolved.
The major stakeholders for the Lanseria smart city include ISA, the Gauteng Growth and Development Agency (GGDA), the Infrastructure Fund, national departments, the Gauteng province, the City of Tshwane, the City of Joburg, Mogale City, and the Madibeng Local Municipality.
The GGDA is appointing a transactional adviser to support the municipalities for the project.
MyBroadband visited the site of the smart city in January 2023 and found that little to no progress had been made on the physical development.
The latest satellite imagery of the planned site of the smart city confirmed that this remained the case.
A comparison of two Google Earth images – one from April 2020 and a second from March 2024 – showed that much of the area’s makeup had remained the same.
Aside from the airport and its related infrastructure, the biggest buildings were warehouses and offices in Lanseria Corporate Estate, where some expansion had taken place.
One big potential issue is an informal settlement right in the middle of the northern section of the planned development.
Moving this settlement and its residents will likely be required to build the city.
There are also a few small patches of buildings and plots which were already in place in 2020.
The GEPF’s interest in acquiring Lanseria Holdings may be related to the government’s plans to create a smart city in the area.
The Competition Commission said it is unlikely that the proposed transaction will substantially lessen or prevent competition in any market.
This is because any information exchange concerns are mitigated by ongoing information exchange conditions from a previous merger involving the merging parties.
“The proposed transaction does not raise significant public interest concerns,” the commission said.
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