The Department of Public Works (DPW) will go ahead with ”fruitless expenditure” on a site worth R10-million, despite not knowing who will use it.
Bewildered public works officials, who spoke to the Mail & Guardian on condition of anonymity, said the department’s acquisition of property with no immediate user will be a violation of the Public Finance Management Act.
The Pretoria site was initially earmarked for the Department of Environmental Affairs and Tourism (Deat), which contributed almost R2,2-million towards its acquisition. It then pulled out last year, citing lack of progress on the part of public works, according to Deat spokesperson JP Louw.
”It goes without saying that we are trying to [get] the money back from them,” said Louw.
But public works spokesperson Lucky Mochalibane said: ”Deat has not withdrawn its request to DPW to acquire new accommodation. Deat’s request for accommodation at this or any other site is still a subject of discussion between the two departments.”
Public works staffers are puzzled by the acquisition, saying that, as an asset manager for the state, the department only has a budget for its own requirements. All of its expenditure is derived from the budgets of departments requiring property.
Even more mystifying, they said, is that public works is already trying to dispose of R800-million worth of its assets.
A staff member suggested that the department’s insistence on buying the site is probably a face-saving exercise after having committed to paying consultants just more than R6,5-million for work done in relation to the acquisition of the site.
”Nobody wants to take the rap for spending R6-million fruitlessly. How will they justify it to Treasury? It will definitely be an auditor’s query,” said an official.
The M&G has seen an undated departmental memo warning the director general about consultants’ fees.
”The entire project expenditure as indicated amounts to about R3,8-million excluding any claims for damages and possible interest charge from [a town planning company],” the memo says.
Public works normally signs a memorandum of understanding with any beneficiary departments, in terms of which the department needing the property binds itself to fulfilling obligations that might arise from the acquisition.
In the Deat case, no memorandum of understanding was signed, the M&G understands.
”Although no written memorandum of understanding existed between the two departments, it is incorrect either to assume or conclude that no agreement existed between the two departments,” said Mochalibane.
He also said it was incorrect to assume that just because there were no immediate takers, the site would be redundant.