Government Immovable Asset Register Update; Agrément Industry and Stakeholder Forum report

Meeting report

Opening

The Chairperson highlighted the role of the Committee Members in performing its oversight role, and all parties playing their part. She stressed the importance of Members receiving the presentations of the Department of Public Works and Infrastructure (DPWI) timeously to allow for better engagement, and urged Members to participate and engage irrespective of late delivery of the presentations.

The Committee Secretary, Ms Nola Matinise, noted apologies from Mr Dean Machpherson, the Minister of the DPWI, and Deputy Minister, Mr Sihle Zikalala, as well as two alternate Committee Members, Mr K Sithole (IFP) and Mr W Thring (ACDP).

The Chairperson highlighted the positive report provided on the Agrément industry and stakeholder forum engagement. Addressing Mr Sifiso Mdakane, the DPWI Director-General (DG), she stressed the lack of mentorship within the sector and called for it to be prioritised. She also called for the DPWI to prepare to present on this and the steps taken to improve mentorship going forward.

Mr Mdakane said Ms Sasa Subban, Deputy Director-General: Real Estate Investment Services, would provide direction on the order of the presentations.

Ms Subban confirmed that Mr Siboniso Sokhela, Chief Director, would present on the updated immovable asset register (IAR), Ms Luna Koza, Head of Geographic Information System (GIS), would speak to the GIS platform, and finally, Mr Mongi Simelane, Information Communication Technology (ICT), DPWI, would perform a live demonstration of the system.

Government Immovable Asset Register

Mr Siboniso Sokhela, Chief Director, DPWI, said that as the Committee was a new Committee, he would provide the context under which the Department operates. He discussed the pre-1994 and post-1994 context in which the asset register was put together. It had had to be rebuilt from scratch, and Phase One (2011-2013) and Phase Two(2014-2017) had been completed, in compliance with the Generally Recognised Accounting Practices (GRAP).

Some of the challenges in compiling the IAR included the over 3 000 names in which the state assets were registered, and the vesting process to confirm ownership. The vesting process required a thorough investigation into what the property was used for, who owned it, the rectification of ownership and so forth. The Department relied heavily on municipalities and the respective provinces in this regard. The main purpose of the vesting process was to confirm state land ownership either with the national or provincial governments.

He said the immovable asset portfolio under the custodianship of the DPWI was comprised of approximately 27 417 land parcels. Of these land parcels, 627 were unregistered as at the end of the last financial year.

In order for state custodians to execute their custodial function and role in terms of rights and obligations, there was the need to survey all un-surveyed land. The Department had developed a national survey plan in response to this.

He stressed the importance of a complete and compliant asset register, together with managing its life cycle. He confirmed that the IAR had been fully digitised, and information migrated from Oracle to Archibus.

Some of the achievements by the Department thus far included:

• A GRAP-compliant IAR;
• IAR data migrated to an integrated assist management system live on Archibus;
• Operation Bring Back programme, which aims to identify fraudulent/illegal transactions in order for the Department to secure custody of the state’s immovable assets.

Some of the challenges faced by the Department included:

• Fragmented systems -- lack of an integrated asset management system;
• Qualified audit opinion on rights and obligations assertion;
• Limited capacity in addressing different aspects of IAR;
• Vesting of land parcels.

He concluded by stressing that the IAR had been updated. The Department had various programmes in place to address the various challenges to ensure integration issues were addressed through collaborating with municipalities and other stakeholders.

Ms Khoza took the Committee through the mobile IAR system and its functionality. She said the process starts with the geographic information system. The MIA system then holds all the information, and administrators are able to perform the necessary quality assurance on the system. Once this process is completed, field workers are tasked with going on site and verifying the information on the system. She emphasised the importance of this role, considering the limitations of the GIS system, which was unable to capture the full detail of buildings for various reasons, such as obstruction of view amongst others.

Once verification was performed by the field workers, further quality assurance was performed to ensure accuracy, and from this point the Department then makes the necessary approvals.

Regarding security, she highlighted that the system logs every activity performed by the person accessing the platform, to provide transparency and accountability. This was further aided by different system roles with different authorisations -- for example, administrator, capturer and so forth -- to restrict access and safeguard sensitive information.

Mr Simelane performed a live demonstration of the Archibus system. He took Members through the landing page to the capturing of new assets under the various categories provided. These included land, improvement, component and infrastructure. Once a transaction was uploaded, it went through an approval process. Once approved, the asset was then uploaded accordingly in the system.

Mr Simelane ended by highlighting the security in place on the system. He said the system was able to keep a history of any changes made, and also had role limitations -- from capturer, verifier and approver -- to restrict functions.

The Chairperson reminded Members that this demonstration had been requested by them at their last meeting. She stressed the importance of this demonstration to show them how the system works.

See attached for full presentation.

Discussion

Mr S Mahlangu (ANC) asked how many stolen property/land cases were registered. He also sought clarity on what the Department intended to do with unused immovable assets. He requested further understanding on the digitisation of the asset register, and what this entailed.

Mr E Marais (DA) referred to speeding up the process of verifying all these assets, and asked how many permanent field workers were in place to assist in the task of verification of outstanding assets. Regarding the capturing of information, he wanted to know what backup systems were in place to ensure information collected was safely recorded. What guarantees had been provided for the preservation of this information?

With regard to municipalities acquiring vacant land, he inquired what this process entailed, and specifically made an example of unused land that was 30 years old or more.

The Chairperson interjected, and said the process Mr Marais was inquiring about was simply expropriation.

Mr V Reddy (MK) began his remarks by referring to a video he saw on social media of the Minister of Public Works giving out land to 64 displaced/dispossessed families in Cape Town. He expressed his encouragement and support of the Minister’s expropriation posture, and stressed the need for the Minister to communicate and inform Committee Members of these activities.

He stressed the role of Members in representing the people of South Africa, and not merely the interests of their respective parties, but of South Africa as a whole.

Regarding the IAR, he noted the presentation highlighted government-owned 27 417 land parcels and 80 210 buildings valued at R154 billion. With such a massive portfolio why had government not been able to turn this around to benefit the people of South Africa?

Mr Reddy expressed his faith in Director-General Mdakane, considering the DG’s active participation and activism with people on the ground. With this context, he asked what was being done with unused land and who was going to benefit from this land. He stressed the cry from communities wanting land and those living in less favourable conditions.

Regarding vacant and unutilised land, he referred to the shocking contradiction exposed by the report. On the one hand, it showed the millions of people needing land and on the other hand, it reported 34% of vacant and unutilised land. Why was this land not being used to address South Africa’s prevailing land issues?

He stressed while 3% of government-owned buildings were unoccupied, millions of families were left homeless. He recommended that these be used as temporary shelters for the homeless and those living in informal settlements. He expressed concern that the Department was more concerned with compliance than action to improve and positively impact the lives of ordinary South Africans.

Mr Reddy concluded by calling for action, stressing the question of what was going to happen with unused land. He added that the DG need not bring his entire delegation to respond to these questions, and should address these himself in the next sitting.

The Chairperson interjected, emphasising the need for the DG to bring his delegation to adequately address questions by Members.

Ms N Makasi (ANC) began by commenting on Mr Reddy’s reference to the social media post he saw of the Minister. She stressed the Minister could not act alone, and should work cooperatively with Committee Members and keep them informed. She had numerous questions to direct at the Minister, considering he had been seen in Parliament blatantly refusing to implement expropriation. She was curious as to why he had chosen to initiate the expropriation project in Cape Town.

Regarding the digitisation of the IAR, she asked whether there was a possibility of the system being hacked. What preventive measures had been put in place to guard against this?

She wanted clarity on the process and role of the surveyor general. What were the issues causing delays by the surveyor general?

The Department had mentioned that they had found three land parcels, one of which was in Midrand -- where were the other two?

Regarding the challenges highlighted by the Department, she asked how the disputes between DPWI and the Department of Water and Sanitation (DWS) would be addressed when it came to issues of custodianship of residential properties and office buildings.

Lastly, what was the plan to ensuring transparency and accountability when it came to the reporting involving the Ingonyama Trust.

Mr N Nxumalo (MK) asked what plan the Department had in place to deal with the illegal occupation of land. More specifically, what was the Department's plan with those occupying land/properties in bad condition?

Regarding the disposal of buildings in a bad condition, would this process be made transparent? Was there any collaboration between the Property Management Trading Entity (PMTA), the DPWI and municipalities to maintain buildings?

He sought clarity on the Ingonyama Trust land situation, with the Trust owning 2.8 million hectares of land, and some of this land being used by the state for housing, hospitals, clinics , etc. He asked:

• What was the status of these buildings under the Expropriation Act No.13 of 2024?
• What was going to happen to these state buildings -- would they be expropriated?
• Were Permissions to Occupy (PTOs) state or traditional land signed by the state, considering ownership still vests with the Ingonyama Trust?
• How, if at all, would the Expropriation Act affect the ownership by the Zulu monarch?
• Was the royal family consulted in the process of drafting the Expropriation Act and the effects thereof?
• Lastly, was there a consultation process at all with the royal family, and what had been their response?

Ms M Kobe (Action SA) questioned the digitisation of the IAR and asked what measures were in place to protect information on strategic buildings, national key points, and so forth, considering the sensitivity of this information. Further, what security was in place to prevent full access to the public?

How well capacitated was the Department to fulfil its objective to record all state assets? She highlighted the Departments constraints in achieving this goal, and asked whether the Department had enough manpower to meet this goal and if not, whether posts had been advertised to address this.

What did the Department require to achieve a fully integrated asset register? Where did it currently stand in its integration process, in order for the Committee to be clear on what still needed to be done and adequately measure the Departments progress?

Regarding the updating of the asset register, Ms Kobe asked after how many years the asset register was updated, and whether there were contracts in place to provide for the updating of this information to ensure there were men on the ground readily available to perform the task.

Ms E Nkosi (ANC) raised concern over the late submission and distribution of presentations. She emphasised the importance of Members obtaining the presentations on time.

Regarding the Minister’s social media post mentioned by Mr Reddy, she frowned upon the Minister launching programmes without informing the Committee. She called for communication and transparency from the Minister. She recommended that the DG provide a list of programmes that would be initiated by the Department to further support the Committee's oversight role.

Regarding the upkeep and maintenance of properties, what measures had been put in place to address clients underpaying the PMTE, which made it difficult for the entity to provide the necessary maintenance of its facilities?

Regarding the challenges faced by the Department, she asked what plan was in place to address the shortage of human capacity and skills in implementing the immovable asset register operation model.

Lastly, how would the Department address the findings in its qualified audit opinion?

Mr E Bath (DA) began by commending the Department on its improved audit outcomes, for turning the PMTE into to a revenue generating entity, and on achieving GRAP compliance.

He asked how accurate the asset register was, what it had cost the Department to set up Archibus, and what the annual cost of running the system was. He noted other provinces had moved away from the Archibus system because it was expensive. He made an example of the Western Cape building its own in-house system. He asked whether there were not more efficient and cost effective ways of housing the asset register considering, from what he understood, Archibus was extremely expensive and outsourced.

How far was the Department in integrating its asset register? He clarified that by "integration" he meant how the asset register linked with the provincial departments' asset registers, internal property rates payment systems, deeds registers, and so forth.

He sought clarity on the accuracy of R154 billion value -- whether this was the market value, the depreciative replacement cost value, or otherwise.

He emphasised the need for mentoring and imparting skills to junior professionals in the Department so they would be able to continue the work that the senior management currently performed. What efforts were being made in this regard to ensure ongoing operation?

How many trust lands and state developed facilities (SDFs) were there? How far was the DPWI in surveying SDFs and preparing them for transfer to the relevant national or provincial departments.

Regarding publicising the asset register, Mr Bath raised the question of risk. How would the risks involved in such publication be averted, taking into consideration safe houses, national key points and other sensitive information which may be vulnerable to invasion?

Ms M Letlape (EFF) asked about the 646 unregistered properties, which affected the tenure, security, municipal rates and municipal revenue collection. What was the time frame to ensure these properties were registered and properly placed? This was to ensure municipalities were not compromised in being able to collect municipal rates and ultimately deliver services.

She referred to slide 34 of the presentation, where the Department listed current challenges and highlighted a dispute between DPWI and the Department of Water and Sanitation. What were these disputes about?

Regarding erroneous vesting, where some properties were mistakenly assigned to provincial governments when they were supposed to be under national custodianship, she asked how far this vesting process was from conclusion.

She drew attention to properties valued at R1 due to missing historical cost records, which in turn affected financial reporting, leading to the Department not being able to generate any profits and the properties being leased at R1. What was the Department's plan to ensure properties with the potential of generating income were not left valued at R1?

What was the Department doing to resolve the issue of abandoned or unclaimed properties, and how many had been resolved so far?

The Department had recorded over 8 900 vacant parcels of land across the provinces. While it was looking to repurchase municipal land, were there engagements with municipalities to ensure they were provided with land and, in turn, that South Africa’s people had land? She emphasised that people needed land, not reconstruction and development programme (RDP) houses. She was concerned that there did not seem to be any engagement with municipalities to distribute land to people. How did the DPWI plan to engage municipalities to ensure land was distributed to the benefit of the poor majority, working with the Department of Human Settlements (DHS) to place people in better and more suitable conditions?

What measures had been put in place to prevent illegal transfers from happening? She asserted that within the Department and/or municipalities there were people who were administering these illegal transfers.

With regard to GIS, she asked if the app dictates which buildings fall within the different categories -- poor, fair or bad condition -- and what informed this categorisation. Did the app approve or reject pictures, considering what the field workers were inputting manually?

She called for the Department to prioritise government leases as opposed to private leases, to ensure it generates profits and repurposes unused properties for business purposes. She suggested the DPWI run a purposeful investment campaign on these illegally occupied and unutilised buildings, and turn them into to more profitable assets. She asked how much such repurposing would cost.

Referring to maintenance, she recommended an asset monetisation strategy, where the Department started leasing unused property to generate revenue to also assist in reducing maintenance costs. It continued to pay maintenance for buildings it did not use.

She requested a list of land the Department had identified as suitable for residential purposes across the provinces, and said they should start engaging municipalities to avail this land for people to be placed in more dignified areas.

She further recommended a set timeframe for the vesting process, suggesting either 18 or 12 months for the Department to provide the Committee with feedback.

Regarding the GIS system, what was the checklist the end user (approver) uses in signing off and approving the transfer of property?

Lastly she recommended the enhancing of the GIS mapping system for asset verification. Was the Department looking at improving the system to improve the detection of buildings, corridors and the like. If so, when would it be able to do this, considering it did not have enough manpower?

Mr M Dlelanga (ANC) described the land question in the country as an "elephant in the room." He raised concern with it being over 30 years, and the Department was still unsure on what assets were held by the country. He stressed if they were serious about land reform, they needed to know which assets were owned by the state. Once this was established, the DPWI would be in a better position to respond to prevailing land and property issues.

Regarding the IAR, how would the Department ensure integration to allow for coherence across various state systems?

He requested a detailed strategy on how the Department planned to attract investors for the R100 billion needed for growth fixed capital formation in the state property portfolio.

The Department had confirmed there was a full digitisation process of the asset register in place, but was it confident of its functionality?

The Chairperson raised the issue of land owned by the state abroad, commenting that this was not included in the presentation. She asked if the Department’s asset register included the property owned by the state abroad.

Department's response

Mr Sokhela responded to the question on Ingonyama Trust by providing its context. The Trust Act was signed on 24 April 1994, and states that all state domestic buildings that were built prior to the signing of this Act were vested in the national or provincial government. The only issue became the size of the land. Where such buildings were located on huge areas of land, the DPWI engages provinces and/or departments through various measures, such as a draft Memorandum of Agreement (MoA) with the Ingonyama Trust Board (ITB) to come to some agreement. He emphasised that the ITB board was in place to manage Ingonyama Trust land, and there was no need for expropriation because the property built prior to 1994 was already vested with the state.

The Director-General said in South Africa there were a number of custodians of the country's properties. These were the DPWI, which represents the state; the Department of Rural Development and Land Reform, which deals with restitution, amongst other things; the Department of Water Affairs; the Department of Defence, which deals with endowment properties such as those donated by the Queen of England; as well as provinces, which also had custodianship of their respective properties.

Over and above this, South Africa’s public entities such Eskom, Transnet and others had custodianship of other properties. The difference was that the DPWI manages the legislation to acquire and dispose of immovable assets of the state.

Regarding the backup system question by Mr Marais, the DG confirmed that the Department did have a backup Oracle system in place, which sits with the State Information and Technology Agency (SITA). SITA was entrusted with keeping all records of the state. The Department then takes this information and uses Archibus as a repository. The Department also had areas where it hid information with its service provider to ensure further backed up information to ensure records were kept up to date and backed up accordingly. 

Regarding questions on vacant land, the DG said the Department was on a mission to release properties to municipalities. Municipalities requested these properties from the DPWI for various reasons, and the Department processes these requests. This was something it did continuously, with sign off from the Minister. He suggested more transparency from the ministry on these programmes to ensure the Committee was kept up to date with these developments.

Mr Sokhela said that part of the responsibility of the Department was to keep South Africans abreast of the assets owned by the state and assure them that the records were in safe hands.

Referring to delays by the surveyor general, he commented that this was part of a broader issue within government.

Regarding the dispute between the DWS and DPWI, he said the DWS was the custodian of South Africa’s dams, but the properties around these dams belonged to the DPWI. This was where the disputes between the departments arose because departments tended to misunderstand their mandates.

To addressing illegally occupied properties, the Department had initiated Operation Bring Back and had appointed four service providers that would be implementing it across all the provinces.

The Department also made occupying families pay rent, depending on circumstances, to regularise and generate revenue. He emphasised that the Department was already moving on illegally occupied properties, and was transparent in doing so.

He said the DPWI continuously works with municipalities, and was committed to collaborating with different departments and entities.

He thanked Mr Bath for acknowledging the Department's work. He confirmed that the Archibus system belonged to the Department. He commented that integration was an information communications technology (ICT) issue.

Mr Sokhela confirmed that all international properties were listed on the asset register, mentioning that there were 21 international properties owned by the state. He explained that the Department of International Relations and Cooperation (DIRCO) had custodianship to manage the foreign assets used by ambassadors , high commissioners, and so forth. It did this through entering into agreements at the international level.

He advised the Committee that the DPWI was not in the business of building homes for people, but rather the custodianship of land. He added that various departments dealt with housing issues, such as the Department of Human Settlements, and the Department of Agriculture on issues relating to farming.

Mr Siza Sibande, Head: PMTE, DPWI, said the Department's optimisation strategy included three main pillars:

• Generating revenue, as informed by the Government Immovable Asset Management Act No.19 of 2007;
• The economic impact which assets have on the state’s gross capital formation; and
• Job creation.

In line with this, the Department's strategic eco-system was comprised of four categories:

• Property development, with the aim of generating revenue and addressing socioeconomic issues;
• Build, Operate and Transfer (BOT) and Refurbishment, Operate and Transfer (ROT) programmes;
• Optimisation of vacant properties, such as the more than 47 vacant properties the Department intends to optimise in Pretoria;
• Addressing the private lease portfolio, which currently exceeds the state lease portfolio by an estimated R5 to R6 billion.

Regarding the delivery of assets, Mr Sibande added that the Department had an advisory unit in place to expedite this process and see to the best implementation. The Department also had plans to repurpose some buildings for various efforts, such as student accommodation, and addressing housing shortage issues within human settlements, working with municipalities.

He emphasised that the Department aimed to roll out 20 ROT and BOT programmes, including regional departmental offices. The Free State was the only province where the DPWI owned its departmental regional offices. It planned to expand this to other provinces. The Department hoped that these plans would have materialised in the coming two to three years.

Ms Subban said the status of three properties was currently being finalised by the courts. One property was in Hyde Park, valued at R8 million, the second was a farm in Rietfontein valued at R130 million, and the third was a Hurlingham, Johannesburg, property valued at about R6 million. She confirmed that the Department was rolling out a strategy that would look at properties that were not in the asset registry and required investigation.

She added the Department had quantified the vacant land parcels at over 9 000, noting some constraints. For example, there were environmental and conservation constraints, protected areas and wet lands, etc, which Department would assess to determine whether they were developable.

Lastly, she assured Members the Department was working with municipalities and various sectors such as Human Settlements, in order to address some the South Africa’s housing issues.

Ms Tsemedi Malapela, Chief Information Officer (CIO), DPWI, addressed ICT questions, and confirmed cyber security measures were in place, although these could not be disclosed. Internally, the Department was also driving security awareness.

She clarified that classified information was not within the public asset register, while within the Department not everyone had full access, for further protection.

She emphasised that the Department was in the process of upgrading the GIS platform for better capability and value for money.

Mr Danie Pretorius, Chief Director, DPWI, addressed delays from the Surveyor General, and clarified that the issue was in fact not with the surveyors, but rather with the Spatial Planning and Land Use Management Act (SPLUMA) regulations and the requirements by municipalities. However, the Department would in future have SPLUMA exceptions afforded to them by the Department of Rural Development and Land Reform (DRDLR).

He said that unregistered land had no impact on rates and taxes. However, what was needed for registration was a vesting certificate which the Department was working on. It had given itself 18 months to address unregistered properties.

He confirmed that the Department performs a forensic audit to investigate stolen property matters. It was committed to resolving this issue in partnership with the deeds register and the Surveyor General.

The Chairperson asked the Department to provide written responses to all questions not addressed in the meeting.

Report of the Portfolio Committee on Public Works and Infrastructure on the Agrément SA Industry and Stakeholder Engagement Forum

The Committee Secretary provided a report on the engagement hosted by Agrément South Africa (ASA)which took place on 25 February at the CSIR Convention Centre in Pretoria, and was attended by four Committee Members -- Mr Bath, Mr S Gama (MK), Ms Letlape and Mr Mahlangu. The engagement sought to enhance ASA’s visibility and social impact within South Africa’s broader communities.

The purpose of the engagement was to promote active participation from a broad spectrum of stakeholders, such as local and district municipalities, the Departments of Water and Sanitation, Transport and Human Settlements, the Industrial Development Corporation (IDC) and others, to strengthen partnerships and foster collaboration. The objective was for stakeholders to share experiences, challenges and opportunities.

The Deputy Minister had also made inputs and recommendations on the importance of all stakeholders working together, as well as the overall importance of community engagement.

She mentioned some of the Committee Member’s recommendations. They had called on ASA to prolong the event, feeling that one day was too short. They asked ASA to roll out a bigger programme to allow for extensive engagement, and to hold the event annually. There was a further call for an increase in visibility and certified products, and the monitoring of these products being used in the construction sector.

They had also recommended that ASA change its name to promote its functions, and urged the DPWI to do more to support businesses certified by the ASA.

Members' responses

Mr Bath said the event had changed his perception of ASA and recommended that the exhibition be brought to the communities. He also advocated a name change.

Ms Letlape said she too enjoyed the exhibition showcasing the different products. She emphasised the importance of oversight, and Members being able to see these products. She recognised that these products provided immediate solutions to the many issues municipalities faced.

She stressed the importance of this event and supported the recommendation for the event to be on a bigger scale. She called for more visibility and exposure of ASA.

Lastly she recommended the event to be attended by the entire Committee, and not just a few Members.

Mr Mahlangu said he was pleased with proceedings at the event, and encouraged ASA’s support of small businesses.

The Chairperson addressed Ms Letlape’s request to have all Members attend the event. She confirmed that she did not decide who got to attend events -- this was the decision of the Chair of Chairs. She was also not happy that not everyone was able to attend, but due process had to be followed.

Dr Bongani Mabizela, Acting Chairperson, ASA board, referred to the potential of the entity, and agreed with Members that it needed to increase its visibility in communities and that this event had been an effort to do so. The theme of the event had been "Building stronger partnerships for sustainable innovation," and ASA was committed to doing so.

He said they had plans to take ASA to the nine provinces, collaborating with the DWS, the Department of Transport, and other stakeholders. It required further approval for provincial visits from the DPWI, and would begin its quest in the Western Cape, the Eastern Cape, KwaZulu Natal and the Northern Cape, followed by the other provinces.

Regarding the name, he explained that ASA was not only a South African entity, but an international entity, and a decision to change the name would be up to stakeholders.

Mr Richard Somanje, Chief Executive Officer (CEO), ASA, said attendance had been well received, and provincial visits would be annual event. He extended the invitation to all Members, and reiterated that the event was a good exercise to showcase to the public what ASA does.

The Chairperson thanked both the Acting Chair and CEO of ASA. She expressed appreciation for their efforts in making the time to attend the Committee meeting and make their presentations. Overall, she applauded the event and supported the recommendations to extend the event and increase ASA’s visibility, as well as considering the name change.

See full report here https://pmg.org.za/tabled-committee-report/6091/

Committee minutes

Members moved to adopt minutes dated 12 March.

The meeting was adjourned.