Public Works Minister, Dean Macpherson, aims to establish a state-owned company that will manage the government’s extensive real estate portfolio and attract private investment for infrastructure projects, Bloomberg reports.
The government is the country’s largest property owner, with around 88,000 buildings and 5 million hectares of land, collectively valued at R155 billion. Macpherson’s department also plans to blacklist companies that fail to meet their obligations, Bloomberg said.
Years of neglect and corruption have resulted in buildings—many located in central urban areas—being overtaken by squatters, who are exploited by armed gangs, or left abandoned.
Macpherson aims to consolidate the government’s holdings into a unified vehicle, laying the groundwork for the creation of a state-owned company.
“We really have to stop seeing public works as a department of bad buildings and we have to see ourselves as an economic delivery unit,” Macpherson stated in an interview.
“We’re going to create an asset book that is worth hundreds of billions of rand that could possibly be traded, could possibly be sold for equity, or can raise debt for social infrastructure.”
The Department of Public Works and Infrastructure is consulting with development finance institutions to establish a well-governed entity capable of generating both revenue and profit from these assets, Macpherson explained.
A government initiative launched in November sought private sector involvement to revive 16 deteriorating buildings in eThekwini, the municipality encompassing the port city of Durban.
This effort has now expanded to include 31 sites nationwide, serving as a pilot project to revitalize and generate income from state-owned assets, according to Macpherson.
Over 650 companies have expressed interest in revitalizing these buildings, collectively valued at R1.4 billion.
The department expects private companies to invest around R10 billion into the project, with an estimated annual revenue—through rent or profit-sharing—of at least R200 million, Macpherson noted.
“The real crisis in infrastructure is in local government,” Macpherson observed, highlighting situations where municipalities return allocated infrastructure funds to the government due to their inability to execute the projects.
To address these challenges, the department is piloting an “adopt-a-municipality” initiative with four local governments, each led by a different political party. In this arrangement, public works officials will effectively manage and oversee projects to ensure they are executed effectively and efficiently.
“We have begun reshaping public works and infrastructure to play a meaningful role in South Africa’s economic development and, ultimately, to create much-needed jobs,” he said over the weekend.
He noted that the latest Afrimat Construction Index showed that activity in South Africa’s construction industry improved for a third consecutive quarter during the final three months of 2024.
“My vision for the Department of Public Works and Infrastructure—and for the broader sector— is to turn South Africa into a construction site that drives economic growth and creates jobs.”
He said that the department aims to attract an additional R100 billion in infrastructure investment over the next four years.
“We know that infrastructure investment remains one of the most powerful tools to stimulate economic growth—and to create employment,” he said.
Research indicates that every 1% increase in infrastructure investment can boost GDP growth by up to 1.5%.
“To realise this vision of a country under construction, we must turn the Department of Public Works and Infrastructure into the economic delivery unit of South Africa,” the minister said.
