eThekwini Metro and the Department of Public Works and Infrastructure have signed a memorandum of understanding (MOU) to “optimise state assets” that have become eyesores and derelict dens of crime.
Minister of Public Works and Infrastructure Dean Macpherson, KwaZulu-Natal MEC for Public Works and Infrastructure Martin Meyer and eThekwini Metro Mayor Cyril Xaba signed the MOU in the city this week.
Macpherson also released a list of the first 16 buildings owned by state departments, including housing and national and provincial public works, for which requests for proposals from investors would soon be released.
“This will allow the private sector, other state agencies or nonprofit agencies, to engage us with ideas on how to utilise these properties towards truly benefiting the people of eThekwini, either through repurposing or redevelopment,” Macpherson said.
“The days of state buildings standing empty, attracting crime to communities and chasing away investment, is coming to an end. The days of the state hanging onto properties it doesn’t need — or is unable to maintain — is coming to an end.”
Macpherson said the signing of the MOU was a “historic moment” marking “a big policy shift” that it gives “truth to our vision to use public assets for public good”.
“This is the first concrete step we are taking towards fixing this great city and restoring it to its rightful place. Today, we are showing the residents of the city that we are no longer talking but that we are taking decisive action towards unlocking economic growth and creating jobs in eThekwini and the greater KwaZulu-Natal,” Macpherson said.
“This will be the first time in history that any such action is being taken and marks a sharp ideological shift from what has been done in the past.
“We have put our ideological differences aside and decided to do what is in the best interest of the residents of eThekwini and the greater KwaZulu-Natal … It is this kind of action which is possible under the new spirit of collaboration under the government of national unity,” he said.
His department would be “an economic delivery unit” if it attracts additional infrastructure investment to South Africa to grow the economy and create thousands of jobs.
He said research by international institutions, such as the World Bank, the McKinsey Global Institute and the International Monetary Fund, shows that state efforts to increase infrastructure investment by 1% can contribute to domestic economic growth of between 0.4% and 3%.
eThekwini is “ripe for infrastructure projects” that could be completed in conjunction with Infrastructure South Africa as grant funding can be leveraged to deliver projects.
“Infrastructure South Africa has also developed an infrastructure pipeline valued at over R64 billion in the country which covers critical sectors such as housing, water, logistics and energy,” Macpherson said.
He said if state properties started generating income, the department would have more funds available to maintain and build schools, hospitals and other critical infrastructure across the country.
Buildings for repurposing
Among the buildings identified for repurposing are the historical public works building at 230 DR Pixley Kaseme Street; the police barracks at 29 Somtseu Road; a house at 347 Lilian Ngoyi Road; the old Excelsior police residence at 97 Peter Mokaba Road; Palm Beach Hotel at 106 Gillespie Street; Dokkies Campus at 321 ZK Mathews Road and The Seaman’s Institute building at 154 Mahatma Gandhi Street.
“Imagine properties such as the police barracks in the Durban waterfront no longer standing empty and being an eyesore, but either being used by a state agency that needs it, or by the private sector that refurbished it into housing,” Macpherson said.
“Imagine the former hijacked Excelsior Court in the Berea no longer forcing residents to be hostages in their homes but rather a modern residential development that generates rates for the city and a building that takes pride of place in the community.
“Imagine the number of historic buildings either owned by the national or provincial department, or the city, being repaired through a partnership with the private sector and used for both public and commercial users.
“This is the first time this would ever be done in the department of public works and infrastructure and will soon be replicated countrywide,” Macpherson said.
He said the MOU was a signal to the property and private sectors that the government is serious about “crowding in private sector investment into state assets”.
“We are no longer going to see empty and neglected buildings which attract crime. Instead, we will start to see beautifully maintained public buildings that are utilised by the private or public sector that drives investment and creates jobs,” he said.
Milestone for Durban and the country
Xaba said the signing of the MOU was “an important milestone” that gives practical meaning to the government’s district development model demonstrating what can be achieved by working together as “social partners”.
He said the ceremony marked the culmination of several initiatives the city has embarked on to maximise public sector assets and drive economic growth, such as the inaugural Property Conference in April, which brought together organs of state, including eThekwini metro, the provincial and national departments of public works and infrastructure, the Passenger Rail Agency of South Africa Transnet and Ithala Bank.
Xaba said there were 560 852 properties within the eThekwini metro jurisdiction covering 246 000 hectares, valued at over R709 billion.
The State, through eThekwini metro, national and provincial public works, Prasa and Ithala owns 72 911 properties, or 13% of all properties within the metro.
eThekwini metro owns 53 516 properties, covering 90 000 hectares; national public works owns 3 037 properties, over 2 364 hectares and the provincial department owns 12 062 properties on 6 788 hectares.
Xaba said, collectively, the signatories of the MOU own a combined 68 615 properties, covering 99 152 hectares.
“With such a large property portfolio, it is inevitable that some of the properties have no obvious relationship to current and future service delivery requirements and can be regarded as surplus, as they are unused, underutilised or abandoned. This leads to them being vulnerable to hijacking and illegal occupation,” he said.
Xaba said this is why, in 2021, the metro took a resolution to adopt the Proactive Land Release Strategy which presented a new approach to surplus land.
“While, previously, the metro would wait for someone to show interest in the said property, which resulted in us incurring costs in respect of security and its upkeep, the new strategy brought about a dispensation where land is kept for its productive and best use,” Xaba said.
Surplus land is now able to generate revenue, attract investment to the metro, improve and preserve municipal assets, ensure transparency in the manner in which properties are disposed of and achieve socio-economic transformation.
“We have identified a total of 149 properties for disposal and 91 have either been released already or are currently out for [request for proposals]. Our target for this financial year is to release 50 properties,” he said.
“In September this year, we released 34 properties to the market, inviting proposals from the private sector to develop and redevelop properties and that the request for proposal process will close next month.”
Xaba said the city had attracted a total investment of R2.2 billion from successful bidders on developing those properties that have been released since 2021, creating more than 5 000 jobs during construction and 1 300 jobs upon completion.
He said from the 30 properties released in 2023, the metro has achieved the following:
• R1.9 billion in investment with R1.6 billion spent on the beachfront;
• 520 jobs will be created during construction;
• 629 jobs will be created upon completion and
• R56.8 million total rental income payable to the metro in the first year.
“eThekwini metro has attracted a capital investment totalling R4.1 billion from the private sector to our municipality using our own surplus, underutilised properties, which are now going to be put to good use.
“The signing of this MOU confirms our commitment to strengthen partnership with all spheres of government and the private sector to ensure that the government utilises state assets to promote economic growth. It also demonstrates our resolve to rejuvenate our city and improve public safety,” Xaba said.
Durban Chamber of Commerce and Industry President Prasheen Maharaj said the chamber had worked with the local government to revitalise the inner city for many years.
“Most of the work that needs to be done has to do with urban management; crime and grime; security; cleanliness; these bad buildings that we’re here to discuss today and rough sleepers,” he said.
“The current state [of eThekwini] is sufficient motivation for the city, for the province and for the country to recognise that the reputation of our beloved city is open to destruction if these issues are not adequately addressed.
“While we acknowledge the improvement in the Durban Business Confidence Index, we are aware that we still have certain service challenges. We need to address issues such as these bad buildings if we want to sustain the positive trajectory we have seen in the business confidence index and we are here, as business, to support [the city],” he said.
