"High profile cases of alleged over-pricing in relation to leases, renovations of ministerial houses and security provisions for the residence of the president … all tell the same story; collusion and corruption are endemic within some elements of the department," he said on Wednesday.
"It is not enough to lament. It cannot be business as usual."
He said as a result of the turnaround strategy, one deputy director general was dismissed and a former acting director general as well as the head of property management were facing disciplinary hearings.
Other officials would also face disciplinary proceedings.
"There is still a long way to go. Rebuilding public works is a process, not an event," he said.
"Those who have illicitly gained from the previous chaos … will resist change, but only the guilty need fear the turnaround process."
40 cases investigated
The Special Investigations Unit had investigated 40 cases related to the department.
Thirteen were finalised, and the unit's recommendations were implemented.
One of the cases concerned leases in Braamfontein, Johannesburg, where the department paid R28-million for six unoccupied buildings.
"The department has begun civil proceedings against the landlord to recover the R28-million," Nxesi said.
"Two officials were implicated; one was dismissed, and the other resigned before the disciplinary hearing."
In another case, the head of property management would face a disciplinary hearing related to a R6.3-million lease.
With regards to the Skilpadshek, Golelo and Lebombo border posts, the investigations unit found there was wasteful spending of R3.5-million.
"Seven officials are to face disciplinary action for authorising payments without supporting documentation," the minister said.
There was an irregular lease related to the South African Police Service in Pretoria, and the department saved R1.86-billion after a fraudulent lease with Transnet was cancelled.
Regarding the prestige portfolio, which deals with ministerial houses, R4.7-million was paid for a development in Pretoria without supporting documents.
"I have recently requested the Special Investigations Unit to focus on … the prestige portfolio in Cape Town," Nxesi said.
"I suspect that similar irregularities of corruption, inflation of bills of quantity, and fruitless and wasteful expenditure are likely to be discovered."
An investigation into the renovation of the department's head office in Pretoria had also begun.
"Preliminary investigation has shown that the initial budget for the contract to renovate the building in 2009 was R59-million," Nxesi said.
"However, when the project was completed in August 2011, the cost had sky-rocketed to R325-million."
He said the department was working closely with the unit on the security upgrade to President Jacob Zuma's Nkandla home, in KwaZulu-Natal.
"The findings and recommendations of the task team have been announced. I have since met with the Special Investigations Unit to request them to further investigate the matter."
In January, Nxesi said government spent R206-million on security upgrades and consultants for Nkandla.
He said the task team investigating the spending found irregularities in the appointment of the 15 service providers and consultants who worked on the project. – Sapa