Disposal of State Property

Meeting report

PUBLIC WORKS PORTFOLIO COMMITTEE
20 June 2001
DISPOSAL OF STATE PROPERTIES: BRIEFING

Chairperson: Mr M.E. Hlengwa

Documents handed out
Property Holding presentation (awaited)
Disposal of State Properties (brochure)

Department of Public Works website

SUMMARY
The Department of Public Works presented the programme and framework for the disposal of superfluous State owned assets. Its objectives were to achieve maximum financial and social returns.

The programme is also structured to ensure the transfer of skills to previously disadvantaged individuals and firms that are active in the property industry. The department plans to create an asset management agency within the Department to provide guidance on the handling of fixed assets in line with governmental initiatives.

MINUTES
Disposal of State Property
Mr T Sokutu, the Director General, informed the Committee that the State Property Disposal Programme was geared toward effective and efficient management of state owned assets. This process entailed the release of State land to meet the Government's socio-economic objectives.

The Department hoped to draw in the private sector to co-use under-utilised State properties with the relevant State department.

He noted that it derived the legal competence to dispose the State's fixed assets from the State Land Disposal Act of 1961 and the Provincial Land Administration Acts.

Committees comprising representatives of National Public Works, National Land Affairs and the Provincial Administration, have been set up in all provinces to foresee the process of vesting and disposal of State land to make recommendations in this regard to the relevant custodians.

The disposal of commercial properties would be undertaken in consultation with Provincial State Land Disposal Committees and that the process would be done through open tenders advertised in the media.

The criteria to be used would be the financial offer to purchase or lease the property, proposed development plans and their viability, mode of financing and social-economic matters.

The sale of superfluous residences and vacant residential stands would promote participation by sections of society who were previously disadvantaged by racially based legislation. To this extent, it is hoped that the programme would foster social integration.

The Department would set up a State Property Agency (SPA) to provide guidance on the handling of fixed assets in line with governmental objectives. The SPA would provide a framework that enables linkages between service delivery and resource planning.

The SPA would also ensure consistency in the decisions taken by individual departments and to confine such decisions within a common framework.

Discussion
The Chair pointed out that the matters raised in the presentations were complex yet of enormous national importance. Since members had received the handouts shortly before the presentations, they might not be in a position to make incisive contributions thereon.He suggested that members be allowed to peruse the documents and make appropriate consultations before affording some contributions.

Mr Radebe(ANC) and Mr Moonsamy(ANC) concurred with the Chair and said that the notice was too short and the issues raised were of great national interest. They pleaded for more time to peruse documents and where possible counter-check on the ground.

MrOpperman (DA) said that the Committee is being informed of what has already been decided elsewhere. What role, if any, did the Committee have in the decisions that have already been taken and what role the Committee is expected to play at this stage?

Mr Sokutu replied that the Committee played no role in the decisions that were taken. The Committee's role at this stage was to fulfil its crucial mandate of accountability and to ensure that the National and Provincial interests balance out. The Committee's role is both monitoring and facilitative.

Mr Moonsamy queried the trend especially in the Western Cape where land was indiscriminately being sold to foreigners which trend, he feared is tantamount to mortgage the country.

Mr Sokutu said that the issue of sale of land to foreigners was one touching on government policy and that could only be addressed at a broader governmental level.

Mr Radebe wished to know whether there were any deterrent measures in place to target people who are still hiding government property as if it were their own.

Mr Sokutu stated that he was not aware of any case of hoarding State property but if any existed then it amounted to fraud and that is covered by relevant laws.

Ms. Shilubane (ANC) wanted to know on what terms land was dished out to Local and Provincial Governments.

Mr Sokutu replied that the terms of a donation or sale depended on the proposed development plans for the land. He explained that where land was sought for low cost housing it was given free of charge but if it was for commercial purposes a market rate would be levied.

Mr Opperman was concerned at the slow rate the land redistribution programme was taking. Local Authorities should be drawn into the programme to enable them redesign their Metros.

Mr Sokutu pointed out that the Department's approach to this matter was reactive as opposed to a proactive one. It would be easier to react to the request of the Local Authorities than for the Department to go to them.

The Chair sought for views of the Department on the proposed move by the Department of Foreign Affairs to enact its own property management Act.

Mr Sokutu said that he considered the move improper and ill advised. It is expedient to have all the State Assets managed under one Act and by one State Agency.

Foreign Affairs have sited incompetence on the part of the Department of Public Works as the reason for their move to manage their own property. This malady was not peculiar to the Department and that it is currently being addressed. He did not see it as a good enough reason though.

The meeting was then adjourned.