Despite holding a massive state property portfolio, the government continues to spend R6 billion annually on private leases—a financial drain compounded by systemic procurement irregularities. Addressing the National Council of Provinces ahead of a departmental budget vote, the Minister of Public Works and Infrastructure outlined a troubling landscape of delayed projects, dysfunctional systems, and a severe lack of consequence management.
Emphasizing that the current operational status quo is untenable, the Minister detailed ongoing efforts to safeguard public funds, investigate wrongdoing, and enforce strict accountability. The address highlighted how stalled infrastructure initiatives directly hinder service delivery to communities. Additionally, the Minister strongly condemned the exploitation of the Expanded Public Works Programme (EPWP), noting that ghost employees and gatekeeping practices are siphoning opportunities away from unemployed citizens and stripping the programme of its intended dignity.
The state’s extensive property portfolio, originally intended to curb wasteful spending, has instead become a hotspot for inflated leases, weak systems, and poor contract oversight. Investigations by the department’s anti-corruption unit have exposed a tactic described as “self-created emergencies.” According to the findings, officials allow standard planning to fail and delays to accumulate, subsequently manufacturing a false sense of urgency to bypass proper procurement scrutiny.
This tactic was clearly illustrated by a 2023 five-year lease agreement in East London, valued at nearly R70 million, which was secured for the then-Department of Public Enterprises. The contract was finalized even as the department faced reconfiguration and closure, rendering the building unnecessary for its original purpose. Consequently, the property has remained entirely unoccupied.
The consequences of this unused lease materialized in 2025 when the National Prosecuting Authority’s Independent Directorate Against Corruption (IDAC) required new office space. While a legitimate procurement process had already been executed to house IDAC at a CSIR facility in Pretoria, a preliminary probe by the anti-corruption and fraud awareness unit revealed that this submission was improperly stalled. This blockage artificially manufactured an urgent need for alternative accommodation, which was then used to justify moving IDAC into 146 London Road—the exact same vacant East London building tied to the defunct Public Enterprises lease.
As a result of these irregularities, the department is now facing a breach of contract claim resulting in damages exceeding R15 million. The Minister confirmed that legal counsel is being sought to navigate the crisis, warning that such cases expose the state to severe financial risks, categorizing the fallout as potentially unlawful, fruitless, and wasteful expenditure.