Ministers and MPs owe Public Works Department R4m in rent

Amid a bank overdraft of R3 billion, the Department of Public Works and Infrastructure is owed about R14 billion by clients including R4 million by current and former parliamentarians.

This was revealed by Minister Dean Macpherson in written response to parliamentary questions from ANC MP Carol Mokgadi Phiri.

Macpherson said the department was faced with significant and structural weaknesses.

“We should not underestimate the scale of the problem we face in bringing this department into financial and operational viability.

“This is also not something that is going to be done quickly, but given a term in government, I believe we can bring the department and its entities into a full clean audit, coupled with a healthy financial outlook,” he said.

Macpherson stated that the financial problems faced by the department included an overdraft of more than R3 billion.

“The Property Managing Trading Entity (PMTE) is technically bankrupt.

Client departments owe us nearly R14 billion. Current and former members of Cabinet, and current and former Members of Parliament owe us approximately R4 million.”

Macpherson said he has been hard at work to understand the nature of the weaknesses that have been raised by the Auditor-General of South Africa (AGSA), who identified, among others, lack of improvement shown on implementing the matters raised on material irregularities and weak controls in IT systems.

“This is why we have also set about to turn these around by developing a clear road map to improve governance and financial health.

“This will be led by our Governance, Risk and Compliance Branch, and we will work with the AGSA on live auditing and to implement interim financial statements to deal with issues as they arise,” he said.

The minister also said they were not going to wait until after the fact where there was little to do.

“Our path to clean audits is non-negotiable. It will be tough, and it will be uncomfortable for some.”

Macpherson said some of the measures to be taken include digitising and automating the department’s systems to curb irregularities and inefficiencies and making tender systems transparent, among others.

Meanwhile, the department has an immovable asset register that comprised of 27 150 land parcels and 81 120 buildings.

“The total value of these properties is recorded as R153 billion as of 31 March 2024. Approximately 2100 land parcels are still to be vested in the rightful custodians,” Macpherson said.

He, however, said he did not have sufficient confidence in the numbers and did not believe that the valuation was an accurate representation of what the department owned.

“In fact, the number of properties and land parcels are most likely far higher and far more valuable. To be honest, I am not sure that after the state trying to ascertain this for the last 30 years under previous administrations, it would be correct to expect this to be done in 12 months.”

Macpherson also said due to the complex nature of a registry, the department may also have to accept that it may never fully know what it owned.

“This will no longer be used as a smokescreen for not disposing of assets, especially those that the state does not require or leverage high value assets for infrastructure investment.”

The minister stated that he recently met with a number of companies in the technology space, financial institutions, investment funds and others that presented to the department how best to deal with their asset portfolio and how to ensure they have an accurate representation of what was owned.

“We discussed at length the available options to us, and we will soon be looking to go to market for service providers to provide us with credible options to risk-manage what we own, what we should own and with an accurate, realistic asset value.”