R49 Million spent on “Critical” Bhisho precinct, with no tangible results

The Department of Public Works has blown through R49-million on the anticipated Bhisho Precinct, which is aimed at alleviating the issue of office space for several provincial departments, but has nothing to show for it.

In the interim, while the tender process for the precinct is plagued by delays, the provincial government is currently spending in excess of R238 million a year on office rental.

I will be asking follow-up questions from the MEC of Public Works, Pemmy Majodina, for clarity on the numerous delays, the most recent of which has pushed back the planned groundwork to October next year.

In a response to a previous parliamentary question, Majodina said the Bhisho Office Precinct has already been delayed by more than a year. The project, launched in April 2017, initially went out to tender in May where 122 interested parties showed interest.

Despite this, when the tender closed, not one bid had been entered, forcing the Department to seek a limited bidding process from National Treasury, which was approved in respect of State-Owned Enterprises (SOE’s) namely: The Public Investment Corporation (PIC), the Development Bank of South Africa (DBSA) and the Independent Development Trust (IDT).

The Department has also since appointed a Transaction Advisory Company, as required by Treasury, and have appointed a professional design team within the project, consisting of architects, quantity surveyors, engineers and town planners. To date, the Department has already paid out R49-million.

See: IQP 33 Q 448

The new tender with the SOEs, was set to close on 20 October 2018, but subsequent to Majodina’s response, it has come to light that the tender has again been extended, now running to April 2019. This has also delayed the anticipated construction commencement date from April 2019 to October 2019.

The Bhisho Office Precinct is being driven as a Public Private Partnership, which will see a financier/developer that will construct and operate the Precinct of a concession period of 25 years, after which the Department will own the precinct.

The ongoing delays in getting the project off the ground means that more taxpayers money is being wasted on rented office space, which is spiralling out of control.

Premier, Pumulo Masuale, in response to written questions by the DA, has confirmed that the province is paying in excess of R238 million on rental space a year.

The biggest spenders are:

  • The Department of Health – R 61 million.
  • The Department of Human Settlements – R 34 million.
  • The Department of Transport – R 27 million.

Instead of having a forward-thinking vision of reducing costs and increasing value for money in terms of public expenditure, the provincial ANC-run government remains short-sighted.

The Democratic Alliance will continue to hold the government to account to ensure that public money is spent in the most efficient and effective way possible. Only a DA government will focus on speeding up service delivery and ensuring a government that is clean, accountable and transparent.