Macpherson targets more private sector investment in state property

Public works & infrastructure minister Dean Macpherson has set a target of raising R10bn in direct private sector investment for the state's property portfolio over the next 10 years. 

Macpherson envisions Infrastructure SA (ISA) taking the lead in fostering a favourable environment for increased private sector investments. Infrastructure SA acts as the central hub for co-ordinating the planning, management and delivery of critical public infrastructure projects.

“ISA will receive extra special attention as our special purpose vehicle that will focus on ensuring that we have well-packaged projects that are financially viable, catalytic in nature and are delivered on time with all stakeholders meeting their commitments,” Macpherson said in his budget vote speech in a mini-plenary of the National Assembly on Tuesday. 

“I am absolutely committed to see ISA become the focal point of infrastructure planning in our country. We can no longer afford a fragmented approach to infrastructure delivery, which has only delivered indifferent results.” 

Macpherson said he had engaged with President Cyril Ramaphosa and cabinet on ISA playing a bigger role, and to highlight the need to broaden the funding models for infrastructure development. New public private partnerships would be pursued in new energy, water, communication and transport infrastructure. 

“We must become obsessed with infrastructure-led economic growth that will ignite job creation throughout SA,” he said. “We intend to add urgency to the pace of infrastructure delivery by innovating and inviting new ideas to achieve what needs to be done.” 

His department would also explore the commercialisation of government spaces, including advertising, parking systems and conference facilities.

Macpherson said there would be a more focused approach to itemised billing, the user charge model, disposal of obsolete assets and the lease of underutilised assets.

“This will allow us to generate much needed revenue. We will also continue to renegotiate high rental rates for the remaining leased properties to achieve more favourable terms. 

“The strategy seeks to repurpose and reposition the Property Management Trading Entity (which manages the property portfolio) as a viable and efficient vehicle to deliver comprehensive value creation through the state immovable asset portfolio.” 

Asset register

Another key priority will be to update the government’s asset register, which includes  government buildings managed by  the public works & infrastructure department and valued at about R154bn. 

“We need to ensure this value is correct so that we can leverage state assets to fund maintenance and building projects,” Macpherson said. 

The department is the biggest landlord in SA, yet there is no precise inventory of its properties. 

“We have committed ourselves to ensuring in the medium term, we will deliver a comprehensive asset register for the government,” Macpherson said. 

“We have pledged to address the mismanagement and underutilisation of government assets. There is an urgent need to establish a systematic approach to asset management through a credible and integrated asset register. 

“Such a register will aid in making informed decisions regarding asset life cycle management, from acquisition to maintenance, to either repurposing or disposing via lease or sale.” 

He also committed to putting an end to pit toilets at schools. 

Macpherson and education minister Siviwe Gwarube will meet Treasury officials and provincial MECs of public works and education to work out how pit toilets could be eradicated. 

ensorl@businesslive.co.za