Review of unused properties: DPWI briefing; with Deputy Minister

Meeting report

Opening remarks
 
The Chairperson said the reason for the meeting was that reports had been received that many Department of Public Works and Infrastructure (DPWI) properties were unused. The Department should inform the Committee about new ways in which it was going to use these properties to benefit from them and prevent them from being damaged. If the properties were used properly, the government would be able to cut funds spent on leasing buildings. Unused buildings could also be leased out to generate profits.

Ms Noxolo Kiviet, Deputy Minister, Public Works and Infrastructure, reminded Members that the meeting was taking place during Heritage Month. The sad history of South Africa should be acknowledged and appreciated. Many had died and sacrificed for democracy. Heritage Day was the day on which President Nelson Mandela and former President FW de Klerk agreed to work on the collapsed political negotiations. South Africa had to work on its laws to take the nation forward. The presentation would be about land reform, sustainable human settlements, rural development, and integrated development. When state property was disposed of, race and gender matters should always be taken into consideration.

DPWI briefing

Ms Nyeleti Makhubele, Deputy Director-General: Real Estate Management Services, DPWI, briefed the Committee on the Department’s review of unused state-owned properties and its strategies to optimise their use to prevent destruction and dismantling.

She said the DPWI was the custodian of 29 322 registered and unregistered land parcels, with 93 943 improvements. Approximately 88 300 buildings were allocated to 51 user departments. Surplus state-owned properties were estimated to be 5 720, made up of 5 187 land parcels and farms and 533 Improvements.

The Committee heard that the Minister of Public Works was mandated by Cabinet to develop an overarching policy framework for the management of immovable assets and to implement that policy through legislation. Suitable state land should be released to facilitate the following objectives:
- Land and agrarian reform.
- Sustainable human settlements.
- Rural Development.
 - Integrated urban development.

The presentation covered the regulatory framework and the principles of the Government Immovable Asset Management Act (GIAMA). The disposal processes were explained. Timeframes were provided for a project to let out state-owned properties to non-governmental and community-based organisations. 

Areas of concern included existing leases on letting out which are below market rates and poor marketing of surplus state-owned properties.

The presentation addresses investment opportunities for renewal of existing leases – see presentation for further details.
 
Discussion

Ms M Hicklin (DA) recalled that she had raised many questions in 2021 about properties in Tshwane, two of which were on Malherbe Street. In May 2021, it was said that some form of donation would be made in an arrangement with the Department of Social Development, but nothing had come of the arrangement. The properties were becoming more vandalised. Two NGOs wanted these properties. How could they be made available to NGOs? These NGOs needed the properties and were willing to make use of them. There had been no reference to making donations to NGOs. The presentation said that applications could be opened, but more clarity was needed on this.

Promises had been made through the heritage advisory services and the Arts and Culture Department about a synagogue in Pretoria. An arts and culture centre was to have been opened there as it was the first synagogue built in Pretoria and the site of the Rivonia Treason Trial. Nothing had come from these talks and the synagogue was becoming more vandalised. The roof was maintained but the Department did nothing to repair the damage done to the buildings. Something should be done to revive the buildings as they were important. Commitment and action were needed from the Department.

Ms  S van Schalkwyk (ANC) said these buildings had been monitored for years and concerns had been raised. It seemed that the Department had not been monitoring them as they should have because the buildings were deteriorating very fast. Unused buildings that could have brought in income were now empty shells because of vandalisation. Routine maintenance should be done. A process of market-related rentals was now in place, but because the Department did not maintain the properties, they were worth much less now. 

Was the Department aware of the condition of their buildings, including those being leased? Were there people monitoring the buildings and were measures in place to inspect them at least once a year to ensure they were still in a good state and occupied?

The idea of swapping properties sounded like a good plan, but did it mean swapping properties from the national to provincial level? Would properties of the same value be swapped or how was it going to be dealt with? Would it be based on needs or wants? More clarity was needed on this issue.

The Minister and the Department had been busy with the donation of properties for different programmes. The Department must be aware of NGOs who want to capitalise on the donations. The NGOs might put up a front and later use the properties to make profits. Were there measures in place to stop NGOs from doing this? Were there measures to prevent NGOs from selling the buildings? A clause should be added that should the building be used to make profits, or should the NGO want to sell the building, then the building should be returned to the DPWI. The use of the property should not oppose the original reason for donating to the NGO. 

Buildings transferred from the national to the provincial level had not been looked after properly. Were there ways to monitor these buildings? Were there measures that stated the original purpose of the building and which held people accountable for how the buildings were used? If buildings were not used for the intended purpose, they should be returned to the national level.

Ms S Graham (DA) said she was glad to see that some progress had been made, but she was also concerned that this was just a project with a nice title that was not going to go anywhere. The same stories from 2018 were being heard all over again. Issues about not being able to find properties and waiting for physical verification had all been heard before. The presentation did not mention anything about the extent of surveyed land whose owners were unknown. It was not known to whom the properties belonged or whether they belonged to the Department. These matters needed answers. A lot of work was needed. There was also talk of new measures to be put in place to assist with the immovable asset register, which was of great concern.

About a year ago, a seal rescue organisation in Hout Bay was to be assisted in getting a lease on a section of the harbour, as they performed a function that nobody else did. The Committee was informed that it would be done according to the leasing out documents and mechanisms for NGOs. She had been requesting this document and still had not seen it.

The DPWI owned a property in the North West Province which was used as a shooting range. A gun shop there assisted the South African Police Service (SAPS) in that area. They had been trying to lease the shooting range for four years. It was said that the National Treasury put the procurement on hold. The bid specification was finalised in August 2022 and was currently awaiting approval. Once approved, it would be advertised accordingly. An unsolicited bid had been received, and it could not be processed. The property was destroyed but the Department was said to be spending around R15 million a year on security. She did not understand why this was happening. The Department was receiving offers from people willing to take the buildings as they were. People were willing to pay market-related rent. The buildings had been broken down and toilets had been stolen. These people were willing to take the land as it was and render a service to the SAPS. The SAPS now had to go to Potchefstroom to keep their gun competency licences updated. She could not understand why the Department was blocking opportunities.
 
Waterloo Green in Wynberg, Western Cape, had three houses on one property and the area was packed with homeless people. Almost every house had been destroyed. The area had security now and when the Portfolio Committee paid an oversight visit, a woman in the community team recognised a man who had mugged her the week before. The man was living on that property. There had been a murder a few weeks ago. A security guard was on duty, but why was this property protected? There had been offers from the local schools to buy the property to extend their campuses. Again, nobody responded and there was no commitment. There had to be better engagement from the Department so that the properties that were causing problems could be disposed of. Properties that were monitored and secured were still being vandalised and stolen. Some of them were heritage buildings. It was said in April 2021 that those properties were scheduled for demolition, but nothing happened. It was then said that the buildings could not be damaged as they were heritage buildings. There was very little investment to maintain the properties, but GIAMA provided that properties should be kept in a good state and provided for service delivery.

Village of Hope in Hartbeespoort had applied for a piece of land years ago. The former Minister of Public Works, Mr Thulas Nxesi,  approved the project and the transfer of land. However, the current Minister, Ms Patricia de Lille, said there had been no such agreement. After Minister Nxesi’s approval, Village of Hope had already started to build on the property. Now nothing was happening there. There was no consistent approach.

Years ago, an “operation take back” had been introduced to deal with properties that had been unlawfully occupied and unlawfully sold. There was going to be a deeds verification process, but nothing had been heard about the operation.

Ms Graham referred to a property in Diep River that had been unlawfully occupied. There were now three security guards on the property because of the intervention of the Committee. An NPO had requested that they take over the property to start a school for disabled children, but there had been no response from anyone.

The takeover of property at Airport Park in East London had been extreme. There were now mansions on this property and deforestation of the indigenous forests in the area. A school had been established and it was maintained by the Department of Education. They were operating out of shacks. They had stopped scholar transport from that area to another area. Schools had been established in a completely unlawful area of East London. Cattle were breaking down fences and going onto the runway. It was becoming dangerous. An intergovernmental task team report had been produced, but there was still no way of dealing with this matter.

A research report showed that many properties of the Department were unlawfully occupied. Knoflokskraal in Grabouw was another example of this. That property was supposed to be used for forestry, but it had been invaded on a large scale. The invasion had been politically motivated, but the Department of the Environment, Forestry, and Fisheries was now going to cancel its project. To relocate those people would be too costly. The whole plan of job creation and economic activity in the Knoflokskraal area had been cancelled because of the unlawful land invasions there.

Management of existing properties had become a huge problem and the longer it took the Department to act, the more damage would be done to properties and the less job creation and development there would be. Would NGOs and NPOs be able to approach the Department and suggest that they take over a property if it suited their needs and the property was not being used? A few years back, a man had wanted to start a vehicle restoration project in Tshwane and was interested in a property. When he approached the Department, they were not interested. It was an ideal site for economic activity, but the Department was not interested, and the man had to find another place. A better environment must be created for people to approach the Department. When people saw that a property was not being used and maintained and wanted to take it over to create something better, it should be possible.

Ms Graham said she was aware of National Treasury guidelines and the processes that needed to be followed. There must be a way to ensure that the Department’s properties were looked after properly and were being used. People must also be able to access these opportunities.

The Chairperson said the presentation did not talk about ensuring that some of the buildings were saved for the use of other departments that wanted to rent properties. The presentation spoke about people requesting access, but this plan was not new. There were properties in Qumbu in the Eastern Cape that were found to belong to the Department. They now had no roofs or fences. She had previously asked the Minister why she did not donate properties that were still in good condition to smaller municipalities which lacked space for their offices.

She enquired about donating houses to the Department of Social Development (DSD)  to be used as safe houses. Why was there silence about that project now? Did the project stop? Did the DSD get all the properties?

The Chairperson said she was concerned that NPOs and NGOs were being given preference. Some of those organisations could be fronting and wanting to use the land for development and make a lot of money. There should be strict rules and regulations. Property could not be given to an NPO one day and then become a mall the next day. 

Responses

The Deputy Minister, Ms Kiviet, responded to the question about handing over properties to municipalities and other spheres of government. Municipalities did request properties for development. The Department was now involved in court cases about municipalities that were given the land but then sold it to private developers. The agreement and the transfer deed indicated that the land was given for specific purposes. If the purposes could not be met, the land should be returned to the Department. Municipalities overlooked these agreements and chose to make money from developers. Where this happened, the Department held on to the title deeds of those properties, which was the reason for the court cases. Private developers could not get title deeds from the municipalities.

In swapping and transferring property, it was stated that if the property was not used for the intended purposes, it should be returned. The agreement would be withdrawn if nothing was done to the property in five years.

Concerning the safe houses, the DPWI was waiting for the DSD to be ready with the money and the necessary resources to properly manage the property before they concluded any transactions with them. There had to be negotiation. Property could not be handed over if the other Department could not use it properly. These projects were ongoing, and progress could be reported if needed. When transfers happened, the Department ensured that no corruption took place.

The DDG, Ms Makhubele, asked for details of the specific cases that had been raised to be emailed to her so that she could follow up on them.

She said “operation bring back” was underway. The Special Investigating Unit (SIU) was involved in the processes, and the Department had recently been informed that the SIU had won three cases involving illegal transfers. One of them involved the plan to build the Pan African Parliament.

A project done in 2017/18 identified about 1 200 properties as having been illegally occupied, transferred, or stolen. The DPWI would recover these properties. The SIU has successfully won back three properties so far. It was an ongoing project, not a once-off one. Only 200 to 300 properties could be dealt with at a time due to capacity constraints, but the Department would keep working on this project. The Department would examine its asset register and keep the project going.

The DPWI knew most of the problems and was very reactive in dealing with them. If property was invaded, then the Department would send security or try to evict the invaders. That was a reactive strategy, but the Department was trying to implement a more proactive strategy that would relieve it of the burden of paying for security.

Regarding the work being done between the DPWI and the DSD, the properties had been identified and refurbished. The DSD had requested that the DPWI permanently give the properties to them, but this was still ongoing work and the properties would be handed over once the administration was finalised.

Assessment of the condition of the buildings to which Ms van Schalkwyk had referred was dealt with by the facilities management branch. They had a programme to do condition assessments for the Department. It was usually an expensive process, and the Department tried to do it in-house as much as possible. This took a lot of time compared to outsourcing. GIAMA required that this be done every five years. It was a very expensive process, but teams were sent out to do condition assessments.

The Department had a challenge where properties were given to client departments, such as Justice, Defence, SAPS, to house their officials; they left the properties without notifying the Department. By the time this was found out, the property would be vandalised. The matter at Qumbu in the Eastern Cape would be looked at and dealt with.

In response to the question about cutting costs, the deputy minister explained that the DPWI did repurpose some of its buildings with a view to cutting the costs for contracting for departments. For example, old flats in Johannesburg used as SAPS residences had been repurposed and were now a beautiful police station with a lot of space that was modern and very user-friendly and provided for disability needs. There were many other projects across the country.

The Department did insert clauses into their agreements that would prohibit unintended uses. The report to the Committee indicated the number of buildings and properties dealt with by the Department. It was impossible to know what was happening in each building but when Members in the course of their work came across issues, they could write to the ministries. Umzimvubu had written to the Minister that they had been interacting with the Department since 2013. In 2017 there had been an agreement by Minister Nxesi that a piece of land would be swapped for a taxi rank behind the police station, but there had been no progress. Now action was being taken and the Minister was monitoring it. Members should inform the Department when they see that a municipality is struggling so that the Department could monitor the issue.

The meeting was adjourned.