MEC Jomo Sibiya on acceleration of property transformation and its benefits

Media Statement by the MEC for Human Settlements and Public Works Jomo Sibiya on the acceleration of the transformation of the property sector for the benefit of majority of indigenous people.
Pietermaritzburg: Following the tabling of the Public Works Budget Speech yesterday in the KZN Legislature, I am inundated with calls and text messages from stakeholders in the property sector and ordinary members of society.
They have offered to make an input in order the shape the content of the discussions during the inaugural Property Indaba to be held in due course. We will ensure that the line-up of speakers and topics for discussion are packaged in such a way that we all usher in a new era.
I wish to emphasize that as elected public representatives, we have a responsibility to be the agents of change and transformation. As the department we commit to double our efforts to alter skewed economic patterns which have, for centuries, seen the majority of our people pushed to the periphery and denied the economic opportunities.
It is important to note that as part of the provision of office accommodation for all government departments, the department currently has 178 leases. Unfortunately, the ownership of such properties is not reflective of the demographic of this country.
We commit to move with speed to address the figures below:
• Indian – have 79 leases which is 44% with a total lease portfolio of R344 million
• White – have 37 leases which is 20% with a total lease portfolio of R113 million
• Black Africas – 15 leases which is 9% at with a total lease portfolio of merely 55%
• Partnerships (White, India and black ) – 16 leases which is 9% with a total lease portfolio of R197 million
In as much it would be ideal for all government departments to be housed in the state owned buildings; hiring of office accommodation cannot be avoided under the current circumstances and it is critical for the government to create opportunities for all in hiring of office accommodation.
I wish to acknowledge calls and messages of support from well-established property owners to work who have offered to work with the Department of Works to address this lack of transformation.
Our immediate task is to implement a turnaround strategy to achieve transformation objectives in hiring of office accommodation. We will move with speed to ensure:-
1. Establishment of Property Owner Database to explore the possibilities of some sort of exemption by National Treasury (provisions of PPPFA);
2. Bid document are amended with clauses preventing fronting through partnerships;
3. Engagements with relevant external stakeholders, especially financial institutions such as Ithala, KZN Growth Fund and other financial institutions in order to assist previously disadvantaged groups;
4. 51% of all Facilities Management Services must be outsourced to the categories listed above;
5. The Department reserves the right not to award to bidders who have current leases with the Department to the cumulative value of R80m;
6. Where a party intends submitting a bid on its own behalf for its own benefit utilizing the property owned by another party/entity/individual, that party is required to submit an original mandate from the owner of the property authorizing the use of the property by the bidder, as well as a shareholding /partnership agreement, setting out the relationship between both parties and how the benefits of the lease, if awarded, will be shared between the parties;
7. Additionally, 30% subcontracting to be enforced on buildings above 900 m², with stringent controls in terms of preventing fronting;
8. Leases below 900 square meters will be ring fenced for the previously disadvantaged communities.

Source: Government of South Africa

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