Tenders for State foreign property register

Posted On Friday, 09 February 2001 03:01 Published by
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The information available to the State on its fixed assets has come a long way since 1994 when incomplete and disjointed property information was contained in a roomful of brown files,

HousingThe information available to the State on its fixed assets has come a long way since 1994 when incomplete and disjointed property information was contained in a roomful of brown files, to today, where a national property register is available on CD-Rom, reports Department of Public Works (DPW) chief director: asset management Gugu Mazibuko.

In May 1996, Cabinet mandated the Department of Public Works to compile a State fixed-asset register after it was discovered that no such record existed.

The exercise took three years to complete, with Mazibuko heading up the project team consisting of various private-sector professionals.
The outcome of the project is that the property register database currently lists 111 000 properties that belong to the national DPW and 128 000 properties to DPW provincial offices.

However, the compilation of the asset register is not complete, with tenders for a similar compilation exercise on foreign fixed assets expected to be put out in February. 

These foreign fixed assets entail properties such as chancelleries and residences. 

'It was decided to compile the foreign property register at a later stage, because there are fewer properties than the number of national properties, and so as to first gain experience and establish the relevant systems through the national register,' Mazibuko explains.

She notes that the tenders for the compilation of the foreign property register will be awarded to private-sector professionals, such as quantity surveyors, property valuers, town planners, structural engineers and architects from local firms that will need to enter into joint ventures with international firms for the project.

'We hope that, once the international properties are captured, we will have a database that will enable us to manage our property portfolio effectively,' confirms DPW director-general Tami Sokutu.

As to the current value of the State property register, Mazibuko alludes to a conservative estimate of over R120-billion.

'We have not done an evaluation of the assets, the reason being that the number of assets is enormous, with individual valuations simply being too costly and time-consuming.

'Furthermore, there is no use obtaining a valuation just for the sake of having a value, which would become outdated within a few months anyway, so we conduct valuations of properties when we transact on a property,' she elaborates. 

However, DPW is investigating the application of a simplified electronic manner in which it can value its properties in the future. 

The department is, at present, allocated a budget of some R400-million a year for the maintenance of these assets - a budget which Mazibuko suggests is less than half of that required. 

DPW's key strategy for extracting optimum value from its property portfolio is ensuring that the properties are organised so to support service delivery goals of the different government departments.

After all, she stresses, these properties are held by government not as investments, but to help it perform its duties.

'If a property no longer serves government or has abnormal holding costs, then it could be declared redundant and will either be disposed of to support land-reform initiatives or sold or leased to the private sector,' says Mazibuko.

During January 1996 to December 2000, DPW disposed of 312 properties of varying size throughout the country, by selling or donating them to local authorities and the provinces for social purposes, with only a few sold to the private sector.

The majority of the properties in government's portfolio are occupied, with the principal tenants being the South African National Defence Force, Correctional Services, Department of Justice, and South African Bureau of Standards, and so the redundant portfolio is limited.

'Once the national register was completed, we felt we were ready to embark on an aggressive plan for the disposal of the remaining redundant properties, and the current strategy entails their sale to the private sector,' she comments.

DPW has gone so far as to schedule a conference, to be held in March, to inform property developers, investors and financiers of the properties that it intends to dispose of within the next two years.

Nonetheless, Mazibuko cautions that properties will not be sold only to the highest bidder, but that criteria such as economic empowerment and socio economic objectives will be used to evaluate all development proposals.

Finally, Sokutu points out that the department is establishing a framework to engage the private property sector in managing State property.
'We hope that, within the next six years, each property belonging to the national DPW will be managed by the private sector.

'It is the only way that we can get the benefit of the private sector's innovative solutions and realise quick turn-around times for maintenance commitments,' he concludes.

Last modified on Saturday, 08 March 2014 09:54

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