South Africa’s government, the largest real estate owner in the country, lacks an accurate record of its property portfolio and its utilisation.
Efforts to audit the portfolio have not yet resolved the issue, according to Bloomberg.
Official records indicate the state owns approximately 88,000 buildings and five million hectares of land, valued at around R155 billion ($8.7 billion).
However, Public Works and Infrastructure Minister Dean Macpherson expressed doubts about the accuracy of these valuations and the completeness of the asset records.
“I am not happy with, and have very little confidence in, the asset-management register that has been presented to me because a lot of it does not make sense,” he told reporters in Cape Town on Wednesday.
“One property is valued at R5 million, when I know that should have a R200-million valuation.”
Macpherson was appointed in June after a coalition government took office following inconclusive elections on 29 May.
He and his advisers are considering solutions, including the creation of a property management trading company to leverage government assets for new infrastructure development.
Macpherson said there are 338 buildings belonging to the state that have been hijacked. "We reclaimed one a week ago in eThekwini."
President Cyril Ramaphosa stated in March that South Africa needs to invest at least R4.8 trillion by 2030 in transport, water, and other infrastructure, with two-thirds of the funding expected from the private sector.
He stressed the need to transform the country into a construction hub to boost economic growth, which has averaged less than 1% over the past decade.
Nedbank Group reported that the value of South Africa’s planned investment projects surged to an annualized R793.7 billion in the first half of this year, up from R193.2 billion last year.
The government and public corporations are responsible for about three-quarters of these projects.
A new government office has been established to expedite mega-infrastructure projects, reduce bureaucratic hurdles, and attract both domestic and foreign investment, according to Macpherson.
“Infrastructure South Africa will help all spheres of government to help manage and package projects that have a value of 1 rand billion and above,” he said.
“This is a way to radically rethink how infrastructure projects are dealt with and how government finances them.”
The City of Cape Town set a South African record for the largest single-year infrastructure investment, totalling R9.4 billion based on verified data for the 2023/24 financial year ending 30 June this year.
In an address to the City Council on 22 August, mayor Geordin Hill-Lewis announced the city's top-performing directorates for capital expenditure.
In total, a full 94% of the city's infrastructure budget was spent or contractually committed for 2023/24.
"This is not only a City of Cape Town record, but also a South African record infrastructure investment. To achieve these numbers in a responsible manner requires an extraordinary effort right across the entire Team Cape Town, and we are just getting started.
"At a combined R39.5 billion for the next three years, our infrastructure budget is 80% bigger than the next biggest city – Johannesburg – and almost 100% bigger than the third biggest, Durban. The vast bulk of this spend – a full 75% – is earmarked for projects that will directly benefit our metro's lower income households."
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