The Department of Public Works and Infrastructure is set to issue a Request for Information (RFI) for the redevelopment of the Telkom Towers precinct in Pretoria, in a move aimed at transforming the dormant government-owned property into a productive, income-generating asset.
Public Works and Infrastructure Minister Dean Macpherson said according to current estimates, the redevelopment of Telkom Towers is expected to cost between R1.8 billion and R2.2 billion and will involve the refurbishment of all nine buildings in the precinct.
“Once completed, the department will have 106,000 square metres of gross leasable area that can be used to maximise state revenue through existing or new clients,” Macpherson said.
Addressing a media briefing in Pretoria, Macpherson said the project would provide an opportunity to bring government departments currently housed in costly private leases into quality state infrastructure, while also creating capacity for the department to supply accommodation to the private sector.
“The redevelopment is expected to contribute to the creation of more than 5,300 direct construction jobs. These are jobs that support families, grow communities, fix broken metropolitans and drive economic activity which South Africa so desperately needs,” he said.
Macpherson said the RFI will test the incorporation of adjacent government assets into the feasibility study, supporting integrated planning and urban revitalisation in accordance with the Tshwane Inner City Regeneration Programme (TICRP).
“This work means that we will be able to formally publish the RFI as soon as next week. By issuing this RFI we are taking a crucial step in the journey to make Telkom Towers productive and we are doing that now.”
Macpherson said the RFI will seek market input on technical approaches to refurbishing and upgrading the asset to meet regulatory and government accommodation standards.
Macpherson said the department had spent approximately R1.4 billion acquiring, renovating and maintaining the complex, with a further R776 million in financial losses directly attributed to the historical mismanagement of the property.
“After spending the Department found itself in a deeply troubling situation of having to maintain something with the potential to be a world-class asset yet remained completely dormant,” he said.
Macpherson said the property's continued dormancy had left it vulnerable to vandalism, theft and occupation by criminal elements, while significant amounts had been spent on security.
The Minister said the redevelopment of Telkom Towers formed part of a broader effort to reform how government manages public assets and large-scale infrastructure projects.
“This mission speaks to the heart of the matter – where institutional culture requires a complete overhaul and a path of deep correction so that public funds can never be wasted to the extent that they have been.
“In order to change the strategic direction of this department, it requires the intentional strategic decision to fundamentally change how government does its business and approaches large-scale projects,” he said.
Macpherson said the department had finalised a Memorandum of Understanding (MOU) with the Infrastructure Finance and Implementation Support Agency (IFISA), paving the way for the RFI to be issued to the market.
“I can now confirm that we have finalised the MOU with the Infrastructure Finance and Implementation Support Agency (IFISA) and will be finalising the RFI in the coming days.”
“It will also test public-private partnership (PPP) delivery models, including contract structuring, packaging and lifecycle approaches, as well as the commercial viability and bankability of the project.
“The process will further inform risk allocation, affordability and value-for-money assessments, while exploring operations, maintenance and capacity transfer models to ensure sustainable long-term asset performance,” Macpherson said, adding that the department intends to pursue a rehabilitate-operate-transfer model that will ultimately see the precinct fully occupied by government departments in the City of Tshwane.
According to Macpherson, the properties being considered include Public Works House (PWH) and the Central Government Offices (CGO) building.
“Public Works House, the department's own head office, is currently not operating at its intended capacity. Its refurbishment is expected to cost approximately R2.2 billion and would unlock 63,768 square metres of gross leasable area while creating approximately 5,700 construction jobs.
The CGO building is estimated to require R560 million for refurbishment, which would unlock 41,739 square metres of gross leasable area and create approximately 1,600 construction jobs.
Taken together with Telkom Towers, the three projects are expected to create more than 12,700 construction jobs and unlock approximately 212,000 square metres of gross leasable area.
“The department will actively play its role in driving inner city rejuvenation and ensuring that government departments return to the centre of Pretoria and are located in government buildings. This will ensure that we cut down on costly private sector leases and return that money to departments to be used for service delivery,”
Macpherson said government could not afford to allow the opportunity presented by the redevelopment to be lost.
“We can never allow complacency, delays and excuses to further categorise how the state functions and how it allows bureaucratic processes to prevent economic development such as this project to prosper.”
The Minister said the project formed part of wider reforms aimed at improving the way the department operates and utilises state-owned assets.
“Public Works and Infrastructure is on a path of irreversible reform in how we operate and utilise the assets of the state which are the peoples' assets,” he said.
He said working with the private sector, generating revenue and reducing the department's R6 billion leasing portfolio were central to the reform programme.
“Our work with the private sector, revenue generation and reduction of our R6 billion leasing portfolio is central to this work. It forms part of the many initiatives we are undertaking to review our R150 billion asset register and open these properties up for investment.”
Macpherson said the Telkom Towers redevelopment marked an important step in demonstrating that the department's reform agenda was taking effect. – SAnews.gov.za
