Picture: SUPPLIED
Picture: SUPPLIED

The public works department is fast-tracking the process of letting out state-owned properties to the private sector.

The department says this will help to reduce the number of vacant, unsecured and unguarded state-owned properties, thereby increasing its revenue stream and reducing property holding costs.

In 2018, the department said it was in the process of categorising R7.5bn worth of unused properties for letting and permanent disposal.

“Properties that are surplus to the needs of government shall be used to generate revenue and such will be advertised on an open tender basis,” public works minister Thulas Nxesi said at the time.

Critics of the drive to amend section 25 of the constitution to allow for expropriation without compensation often argue that the state should focus on redistributing land under its ownership, some of which is unaccounted for or underused.

The state has a property portfolio of more than 93,000 buildings and more than 1.9-million hectares of land under the custodianship of public works.

However, due to the dispersed geographical location of the state’s properties, many vacant properties are often left unguarded and unsecured, which leads to vandalism and illegal occupation, Nxesi said in a written reply to a question in parliament, which was published last week.

ANC MP Eddie Makue asked Nxesi why buildings and other assets that are owned and managed by his department are unoccupied for extended periods, becoming dilapidated due to a lack of proper maintenance and vandalism.

Nxesi said properties are allocated to other government departments based on their needs. However, some properties remain vacant due to a lack of funds to develop them, as the budget may have not yet been allocated to the department.

“The department of public works also leases its properties out to private users, who have identified state-owned properties for personal or business use. Where there is no interest in a property, either from the public or private sector, the property remains vacant and unutilised,” said Nxesi.

“The department of public works is in the process of rolling out its disposal framework, which will 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 to safeguard, as well as find ways of investing in, vacant state-owned properties across the country.

A draft expropriation bill was gazetted by Nxesi in December for public comment. 

The bills adds a brief section dealing with circumstances in which nil compensation might be just and equitable.

Such circumstances include where the owner has abandoned the land, where the land is occupied or used by a labour tenant, where the land is owned by a state-owned corporation (subject to concurrence with the relevant executive authority), where the land is held for purely speculative purposes, and where the market value of the land is less than the current value of direct state investment or subsidy in the original acquisition or subsequent capital improvement of the land.

The passage of the bill through parliament is separate to plans to amend the constitution to allow for expropriation without compensation.

phakathib@businesslive.co.za