R1.3bn Limpopo student housing project stalled at 98% completion

A R1.3bn student housing project at the University of Limpopo, designed to provide nearly 3,000 beds, has been stalled for over a year at 98% completion. The project, funded by the Public Investment Corporation, was intended as a flagship public-private partnership. Instead, it has become entangled in a protracted legal battle in the high court in Pretoria. The delays have resulted in over R100m in lost revenue and left thousands of students without secure accommodation.

The project was conceptualised in December 2017 as a social infrastructure initiative to deliver 10,000 student beds across Limpopo province. The Public Investment Corporation put in R1.2bn of pension funds for 70% equity, while K-SL, a black-owned developer, contributed R600m for the remaining 30%. The joint venture agreement requires major investment decisions to be unanimously approved. However, severe delays began when Eskom failed to complete critical power grid upgrades by the scheduled deadline of June 2, 2025.

Eskom only managed to provide a temporary 20% electrical connection in July 2025, pushing full permanent power completion to April this year. As construction dragged on, unpaid contractor claims accumulated, and by September 2025, site operations entered technical suspension. In April, Raubex, the primary contractor, issued a formal letter of demand for unpaid interim payment certificates, followed by a 14-day notice of intention to terminate the building agreement.

Faced with impending contract cancellation, K-SL launched an urgent application seeking an order to compel the management committee to release R39.8m in overdue payment certificates to Raubex and R4.3m in approved fees to project consultants. The payment impasse stems from a second variation order requesting R90.5m in additional capital expenditure. The extra funding was needed to cover Eskom-related delay claims, contractual price escalations, and other costs.

The crisis presents a "double exposure" for public sector pensioners, as the Public Investment Corporation also holds an approximate 30% equity stake in Raubex, the contractor. The prolonged non-payment erodes value in the underlying student housing asset while exposing the contractor to balance-sheet distress. K-SL director Gregory Mofokeng warns that if the facility remains closed, thousands of students may be forced to live in inferior accommodation.

Public Investment Corporation head of properties, Malusi Mthuli, denies allegations of bad faith or obstruction, stating that releasing unverified funds would breach statutory duties under the Public Finance Management Act. Mthuli says the corporation's refusal to sign off on additional capital was grounded in fiduciary prudence, citing concerns over the project's escalating costs and lack of verified submissions.

The stalled project has significant implications for students and the Public Investment Corporation. The delays have already resulted in substantial financial losses and threaten to further erode the value of the student housing asset. With the project hanging in limbo, thousands of students are left without secure accommodation, and the Public Investment Corporation's reputation is at risk.

Key points

• The R1.3bn student housing project at the University of Limpopo is stalled at 98% completion due to a legal battle between the Public Investment Corporation and a private developer.
• The delays have resulted in over R100m in lost revenue and left thousands of students without secure accommodation.
• The project's stalled status presents a "double exposure" for public sector pensioners, as the Public Investment Corporation holds an equity stake in both the project and the contractor, Raubex.