DPWI outstanding legislation; with Deputy Minister

The Committee met to receive a briefing from the Department of Public Works and Infrastructure (DPWI) on progress relating to the Draft Public Works Bill and the amendments to the Infrastructure Development Act. It was explained that both the Property Management Trading Entity (PMTE) and the Expanded Public Works Programme (EPWP) continued to operate without a clear statutory foundation and that the draft legislation sought to rationalise outdated laws, confirm the public works mandate, and restructure the PMTE into a state-owned company. The Committee was informed that substantive comments from the Office of the Chief State Law Adviser had been received and were under consideration before the Bill would be published for public comment. The Department outlined longstanding operational and financial weaknesses within the PMTE, including poor cost recovery, growing maintenance backlogs and a lack of enforcement capacity. It argued that the PMTE’s functions extended far beyond those of a trading entity and that a dedicated state-owned company would allow for improved debt recovery, better asset management and stronger investment planning. The Committee was further briefed on proposals to establish a Public Works Corporation SOC Ltd, which would assume responsibility for PMTE staff, assets and liabilities while custodianship of state property remained with the Department. Members were advised that the broader objectives of the Draft Bill included enhanced governance, job creation, climate-resilient infrastructure planning and improved coordination across government. Updates were also provided on the amendments relating to Infrastructure South Africa (ISA), which played a central role in developing a national project pipeline, coordinating project preparation and reducing regulatory delays. It was reported that ISA’s conversion into a Schedule 3A public entity required concurrence from the Minister of Finance, as its business case formed part of National Treasury’s oversight over the creation or restructuring of entities under the Public Finance Management Act (PFMA). The Committee was informed that inadequate project preparation remained a major cause of infrastructure delays and cost escalations nationally, and that the Bill aimed to consolidate technical capacity to reduce failures in mega-project delivery. Members raised concerns regarding municipal capacity, the perceived centralisation of authority within the draft legislation, constitutional implications, and the potential impact of the proposed reforms on procurement transparency. Questions were also posed regarding the extent to which the PMTE would be empowered to recover debt from client departments, the feasibility of establishing a new state-owned company within current fiscal constraints, and whether the restructuring would genuinely strengthen state capacity in line with the National Development Plan (NDP). In response, the Department emphasised the need for a more agile asset-management model, highlighted international examples of successful state property companies, and stressed that the existing PMTE structure had reached the limits of what could be achieved under the PFMA. Further discussion focused on the role of National Treasury, the relationship between the ISA and the Development Bank of Southern Africa (DBSA), and the importance of intergovernmental coordination. The Department noted that, while oversight of the PMTE would remain with the Portfolio Committee, the new structure was necessary to unlock the economic potential of the state's extensive property portfolio. Members expressed differing views on whether creating a Schedule 2 entity would address underlying structural weaknesses, with some cautioning against adding new entities and others arguing that the current model had proven unsustainable.