The Department of Public Works (DPW) and private sector property owners participated in a landmark meeting on June 14, to discuss key challenges and find solutions to issues affecting both. The DPW signs property leases on behalf of government departments, but has never before had a formal discussion with the property sector about issues of mutual interest.
The long-overdue meeting was also the launch of the Property Charter Council’s (PCC) executive property owners’ breakfast, which it hopes to make an annual event.
Eager to engage with the DPW, property sector representative bodies were in strong attendance. Stakeholders included the newly established SA Real Estate Investment Association (SA REIT) representing listed property companies, the South African Property Owners Association (SAPOA), the Black Association of Commercial Property Owners (BAPCO), the South African Institute of Black Property Practitioners (SAIBPP) and the SA Council of Shopping Centres (SACSC). The event was also attended by Banking Association of South Africa (BASA) representing financial institutions.
“The DPW has struggled to manage state assets for years. Its protracted problems are well documented; lack of consistency with leadership posts, skills and accountability, to lease scandals reported by the media, mismanagement, corruption and no asset register to speak of.”
Keynote speaker, Public Works Minister Thulas Nxesi, pointed to unstable political leadership as an obstacle for the department, which has had three ministers in three years. He appealed to the private sector to help the department’s turnaround and support it with skilled people, and promised an open-door policy.
Nxesi urged attendees to help the DPW solve its problems rather than profit from them.
“If DPW was a business it should have been closed down a long time ago. There has been no accountably, resulting in a non-existent reliable asset register. DPW’s portfolio is seven times the size of the country’s largest JSE listed property company, Growthpoint Properties, yet, while returns of listed companies average 10%, the return on DPW portfolio is less than 1%,” Nxesi said.
The private sector agreed to assist the department compile a state asset register, while the DPW completes a comprehensive audit of all leases, and ensure a clean audit process.
SAPOA CEO Neil Gopal said: “SAPOA welcomes the engagement with the DPW. It is good news that Minister Nxesi has confirmed an open-door policy with its property sector stakeholders. SAPOA looks forward to future engagement. It’s in everyone’s best interests that the DPW functions well with the necessary skills in place.”
Statement issued by SAPOA