Government announced plans yesterday to sell off noncore properties owned by parastatals in a bid to release billions of rands needed for development and to free up land for tourism and other sectors targeted in the Accelerated and Shared Growth Initiative for SA (Asgi-SA).
"Cabinet approved in principle a strategy for the disposal of noncore properties of state- owned enterprises. The strategy forms part of the programmes of Asgi-SA, to ensure that government leverages as much of these properties as possible for promoting urban and light industrial development and other projects in various parts of the country," said chief government spokesman Joel Netshitenzhe at a media briefing.
Large parastatals such as Transnet, Eskom and Denel have over the years accumulated assets that are not essential to their business - mainly land and urban and industrial properties.
Many of these companies already have plans in the pipeline to sell off these properties but cabinet's decision yesterday signalled that government wanted to speed up the process in order to meet the Asgi-SA target of 6% economic growth by 2010.
Netshitenzhe said the state could not yet put a monetary value on the properties but said "ways would be found to compensate state-owned enterprises for any loss of asset value".
As part of its restructuring, Transnet plans to divest from Propnet, which owns the Carlton Centre and Carlton Hotel in central Johannesburg.
Spoornet, the parastatal's freight division, also owns land and property along the N2 highway in Port Elizabeth. This land, in a prime area along Port Elizabeth's beachfront, could be used to develop tourism facilities, said Netshitenzhe.
The issue has been a sore point between Transnet and the Nelson Mandela Metro, which has mooted plans to push the N2 highway further inland and use the land to build a long-delayed waterfront development.
Spoornet's rail storage facility runs parallel to the freeway and its manganese tank farm occupies beachfront land in the sought-after South End area.
Eskom and Denel have also identified their commercial property arms, Rosherville Properties and Bonaero Park, as "noncore assets" to be disposed of.
Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge
