Lesotho government signs the 1st M80 million private public partnership projects for the financing, construction and management of Ministry of Health and social welfare headquarters.

On the 11 January 2006 Honourable Minister of Finance and development Planning joined by the Minister of health and Social welfare signed an agreement with a consortium under the leadership of RPP Developments (PTY) LTD (“RPP”) of the republic of south Africa for the development of a new headquarters for the ministry of health & social welfare on private public partnership model. The total cost the project is M80 million. This is the first project in the country to be developed on this basis, and its success will form a basis for future engagement between the government and the private sector.

The essential features, the developers will design, finance, build and arrange for the ongoing management of the project on land leased from the government. Upon completion the building will be leased to the government for a period of 12 years after which ownership of the building will be transferred to the government at nominal value of M1.00. The consortium under the name constitution road developers (pty) Ltd has been registered in Lesotho for the completion of the project. A large amount of shareholders funds in access of M 20million has been syndicated and invested in the company by shareholders funding in constitution road developers. Fifty percent of the shareholders funding in constitution road developers has been provided by an offshore entity with balance of the shareholder funding coming from RPP and private investor from republic of South Africa. Further more, substantial loan finance has been secured from standard bank and is underwritten by the shareholders for this project.

The project construction will commence at the end of January 2006 and it will be completed by May 2007. This project gross building area is 17365 including basement areas. The gross lettable space is 10840 sq metres giving an efficiency ratio of 91.7% on a gross building area of 11840 sq metres excluding the basement. The property will include 164 basement parking bays and 68 parking bays grade. The building will have modern facilities including an auditorium and health related clinical facilities.

The conclusion of the financing arrangements for this project is an indication of the confidence that the investors place on the kingdom of Lesotho and its future.