Department of Public Works asks property sector to help it get its house in order

THE Department of Public Works (DPW) and private sector property owners participated in a landmark meeting on June 14 to discuss key challenges and find solutions to issues affecting both parties.

The DPW signs property leases on behalf of government departments, but has never before had a formal discussion with the property sector about issues of mutual interest.

The long-overdue meeting was also t he l aunch of t he Property Charter Council executive property owners’ breakfast, which it hopes to make an annual event.

Eager to engage with the DPW, property sector representative bodies were in strong at t e ndance. Stakeholders included the newly established SA Real Estate Investment Association representing listed property companies, the South African Property Owners Association (Sapoa), the Black Association of Commercial Property Owners, the South African Institute of Black Property Practitioners and the SA Council of Shopping Centres.

The event was also attended by the Banking Association of SA, representing f inancial institutions.

The DPW has struggled to manage state assets for years. Its protracted problems are well documented – from lack of consistency i n l eadership posts, skills and accountability, to lease scandals reported by the media, mismanagement, corruption and no asset register to speak of.

The keynote speaker, Public Works Minister Thulas Nxesi, pointed to unstable political leadership as an obstacle for the department, which has had three ministers in three years.

He appealed to the private sector to help the department’s turnaround and support it with skilled people, and promised an open-door policy.

Nxesi urged delegates to help the DPW solve its problems rather than profit from them.

“If DPW was a business it should have been closed down a long time ago. There has been no accountability, resulting in a non-existent reliable asset register,” he said.

“DPW’s portfolio is seven times the size of the country’s largest JSE- listed property company, Growthpoint Properties, yet, while returns of listed companies average 10 percent the return on DPW portfolio is less than 1 percent.”

The private sector agreed to help the department compile a state asset register, while the DPW completes a comprehensive audit of all leases and ensures a clean audit process.

Sapoa chief executive Neil Gopal said: “Sapoa welcomes the engagement with the DPW. It is good news that Minister Nxesi has confirmed an opendoor policy with its property sector stakeholders. Sapoa looks forward to future engagement.

“It’s in everyone’s best interests that the DPW functions well with the necessary skills in place.”