Government has R7.4bn in vacant properties across the country
A lack of maintenance budgets for properties, and arrears on ministerial rentals, are starting to add up
The department of public works has a portfolio of vacant properties with an estimated value at R7.4bn across the country.
The reasons for the vacancies, public works minister Thulas Nxesi said in written reply to a parliamentary question by DA MP Malcolm Figg, were that residential properties were no longer required by clients of the department; a lack of demand for the utilisation of specific properties either by government or the private sector; and a lack of funds by the department to rebuild, refurbish or develop the property for utilisation.
The department’s property portfolio consists of more than 90,000 immovable assets. In reply to a question by National Council of Provinces member Edwin Makue of the ANC, Nxesi said the department was in the process of rolling out its disposal framework, which would drive the process of letting out state-owned properties to the private sector.
“This will assist in the reduction of vacant, unsecured and unguarded state-owned properties, thereby increasing the department’s revenue stream and reducing property holding costs. This will also lead to an accumulation of funds, which can be used to invest in the available stock of vacant properties,” the minister said. “In addition to this initiative, the department is in the process of consulting provincial and municipal stakeholders to discuss how the three spheres of government can work together, as well as find ways of investing in the vacant state-owned properties across the country.”
Nxesi said the department commissioned maintenance projects on utilised properties in line with available funds. There was no maintenance budget for vacant properties. Replying to another question by EFF MP Ntombovuyo Mente, the minister indicated that the department’s planned maintenance budget amounted to about R2bn annually.
In reply to a question by EFF MP Leigh-Ann Mathys, Nxesi said the department had a total of 9,653 land parcels across the nine provinces that were vacant and currently not in use. The number of immovable assets leased out for private use was approximately 1,060, though this number was not static due to the expiry of leases, as well as renewals and new leases.
Replying to another of Figg’s questions, Nxesi revealed that ministers owed R1.2m in outstanding rental on their ministerial residences. The monthly rental cost for ministerial residences ranged between R988.90 and R1,200.82.
“In our analysis of how the ministers ended up being in arrears, we found that there were a number of systemic flaws. The building up of arrears is largely not through faults of or negligence by the ministers. It would therefore be unfair to name which ministers are in arrears, save to mention that the problem is being addressed with the departments concerned.
“The challenge with collecting rental income for ministerial residences is a systemic one. Once ministerial residences have been allocated, the department of public works submits the documents indicating the amounts payable monthly to the client departments, whose responsibility it is to action the stop orders from ministers and deputy ministers’ monthly income,” Nxesi said.
“Despite numerous reminders, some departments fail to action the stop orders leading to escalating debt. In the past, I have engaged with members of the executive on the debt owed to the department and this was done with relative success.
“However, the challenge persists. Ministers are always willing to co-operate in terms of paying their monthly rentals. The challenge we must resolve is a systemic one to ensure that the monthly rentals are collected without fail on an ongoing basis,”