Trea­sury rules may hold ma­jor im­pli­ca­tions for de­vel­op­ers and gov­ern­ment

Weekend Argus (Saturday Edition) - - PROPERTY -

NEW TREA­SURY reg­u­la­tions, soon to be pub­lished un­der the Pub­lic Fi­nance Man­age­ment Act, could have ma­jor im­pli­ca­tions for prop­erty de­vel­op­ers and hu­man set­tle­ments de­part­ments vy­ing to gain ac­cess to well- lo­cated, non- core land owned by state-owned en­ter­prises.

This is ac­cord­ing to Sean Day­ton, an as­so­ciate in Bow­man Gil­fil­lan Africa Group’s cor­po­rate, merg­ers and ac­qui­si­tions prac­tice.

“Orig­i­nally re­leased for pub­lic com­ment in 2012, the reg­u­la­tions have been re­vised in line with the sub­mis­sions re­ceived since then. The ex­tent of the re­vi­sion is un­known, but the pub­lic will have ac­cess to the fi­nal form of the reg­u­la­tions when they are pub­lished in the Gov­ern­ment Gazette in the com­ing weeks,” Day­ton says.

He says that state- owned en­ter­prises ( SOEs), such as Transnet, own vast tracts of well-lo­cated land close to South Africa’s ur­ban cen­tres. The Na­tional De­vel­op­ment Plan, the gov­ern­ment’s plan to elim­i­nate poverty and re­duce in­equal­ity by 2030, has high­lighted how, in some in­stances, post- 1994 poli­cies have re­in­forced spa­tial di­vides by plac­ing low-in­come hous­ing on the pe­riph­ery of ci­ties. De­spite this, SOEs are able to dis­pose of well-lo­cated land to third par­ties with­out be­ing re­quired to first of­fer the land to hu­man set­tle­ments de­part­ments or to the Hous­ing De­vel­op­ment Agency.

“Reg­u­la­tion 26 of the orig­i­nal draft reg­u­la­tions did con­tain pro­vi­sions which, if car­ried through to the fi­nal form, would af­fect an SOE’s abil­ity to dis­pose of its land,” says Day­ton.

For ex­am­ple, the reg­u­la­tions in­cluded a re­quire­ment that an SOE’s ac­count­ing of­fi­cer con­sider a prop­erty’s abil­ity to sup­port wider gov­ern­ment pro­grammes be­fore de­cid­ing on a par­tic­u­lar dis­posal method for that prop­erty.

“How­ever,” says Day­ton, “many felt th­ese pro­vi­sions did not go far enough as they did not con­tain an ex­press right of first re­fusal in favour of state de­part­ments.

“The ANC in­di­cated in its dis­cus­sion doc­u­ment on so­cial trans­for­ma­tion, drafted in prepa­ra­tion for the mid-term pol­icy re­view con­fer­ence held re­cently, that it wanted the state to take a lead in get­ting land from some of the paras­tatals at no cost.

“It will there­fore be in­ter­est­ing to see what, if any, changes will have been made to the draft reg­u­la­tions when the fi­nal ver­sion is pub­lished in the next few weeks,” says Day­ton.

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