DPWI and PMTE briefing on under-utilised state buildings, private leases, and active leases

Video The Portfolio Committee on Public Works and Infrastructure met virtually to receive a briefing from the Department of Public Works and Infrastructure (DPWI) and the Property Management Trading Entity (PMTE) on the underutilisation of Telkom Towers and other state-owned properties, the Department’s lease portfolio, expenditure on leased accommodation and plans to optimise the use of state-owned buildings. The Department presented information on Telkom Towers, the Centre for Government Offices (CGO) and Public Works House (PWH), including proposals to refurbish or renew the properties. It indicated that constructing equivalent new buildings would cost approximately R10.4 billion, compared with approximately R4.1 billion to refurbish the existing properties. The Department also provided information on its lease portfolio and discussed measures to reduce reliance on private leases by making greater use of state-owned accommodation. Members questioned the Department extensively on the continued underutilisation of state-owned properties while substantial amounts were being spent on leases and maintaining unused buildings. They sought clarity on the basis for the refurbishment estimates, projected savings from replacing private leases, the lease renewal and termination schedule, penalties, the proposed public-private partnership model and safeguards against cost escalation and irregular expenditure. Members also raised concerns about the Department’s preparedness and the limited information provided on some properties included in the presentation. The Committee specifically questioned the Department about the MTN building in Durban, including its purchase price, intended users, refurbishment plans, timeframes and projected costs. The Department indicated that the building had been purchased for R43 million, was an 11-storey building partially occupied by the Labour Court, and that the Public Protector and Correctional Services had expressed interest in the available space. However, no refurbishment estimate was available because discussions with prospective user departments were still under way. The Committee was also informed that Telkom Towers incurred approximately R5 million per month in municipal services, R497 000 in security costs and approximately R1.2 million in property rates, resulting in average monthly expenditure of approximately R6.8 million. The Committee expressed concern about the continued expenditure on the underutilised building. The Chairperson stressed that officials appearing before Parliament had to be adequately prepared to account for information presented and respond to questions. The Committee emphasised its oversight responsibility over public expenditure and required the Department to provide written responses to all outstanding questions and requests for further information within seven days. The Committee then adopted the minutes of the previous meeting.