Public Works Asset Strategy

Posted On Wednesday, 26 September 2001 03:01 Published by
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Consultants in Association, the consortium that won the public works contract to set up a property asset management framework, says it will tread carefully so as not to undermine government's social responsibilities.

Property-Housing

Government's adoption of an asset management approach in handling its R120bn property portfolio has raised fears that social responsibility will suffer as government seeks to maximise value in its properties.

In its purest form a property asset management approach will mean that every government property is maintained as a value-creating asset. This could lead to the disposal of a number of government properties that are seen not to be adding value to the state portfolio. Government properties include police stations, clinics and basic service providers' premises.

Consultants in Association co-ordinator Peter Walker says it would be wrong to treat government as a pure property asset management organisation, especially in light of its social responsibilities.

Consultants in Association, a consortium drawn from Rand Merchant Bank Properties, Dijalo Property Services, Wipcapital, Australia-based Macquarie, Africon, Deloitte & Touche, and Turner & Townsend, beat 12 other bids for the public works job. Others that made the short list were Future Build, which featured Propnet; a PricewaterhouseCoopers-led consortium; and one led by property asset management company Lyons.

The Consultants in Association consortium boasts local and international firms, and expertise in a broad range of fields including planning, acquisition, maintenance, facility management, disposal and financial structuring.

Public works director-general Thami Sokutu says the consortium showed good understanding of what government required. The department called for private sector advice after realising it was not handling its property assets in the best value-creating manner. The consortium says the assignment will include developing a fixed asset management strategy framework which will form the basis of a new government fixed property act.

The team is not there to 'assetmanage' government property, as is widely believed, but to develop an asset management plan with a focus on achieving and quantifying functional, economic and social returns from the state's property portfolio, says the consortium.

Observers say there is no reason for bid losers to feel bad, as development of a framework is only the beginning of a process to open major opportunities for property asset managers.

At the completion of this process towards the end of next year, government will outline a framework which is expected to lead to large-scale outsourcing of management of government property. Government is also expected to dispose of a substantial portion of its portfolio.

Walker says it is too early to ascertain the direction government will take. The process will be driven primarily by what government wants to achieve more effective asset management through establishing appropriate systems.

Last modified on Saturday, 08 March 2014 09:28

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