The public works department has stumbled from one scandal to another and has had three ministers and a number of suspended senior managers since 2009.
Nxesi told journalists on Tuesday afternoon that they were making real progress in tackling the immediate and systemic challenges and have put in place building blocks to rebuild the department.
He revealed that 23 of the 40 investigations by the Special Investigations Unit (SIU) on irregular leases and projects have been completed and this has resulted in successful disciplinary actions, dismissal of six officials including a deputy director general and court actions to recover monies wrongly paid by the department.
Nxesi said they were awaiting reports from a disciplinary hearing involving one deputy director general and one chief director.
The SIU has also completed investigations into the Prestige projects in Pretoria, relating to renovations of ministerial houses and have recommended that officials involved be disciplined.
“We have now extended the investigation to Cape Town where approximately R100-million was spent on renovating 11 ministerial houses.
“The Prestige projects constitute a major area of collusion and irregular expenditure which has attracted negative publicity – deservedly so,” said Nxesi.
Cancellation of two high-priced projects
He said they have taken firm control of Prestige by centralising it, implementing a new structure and creating a direct reporting line to the newly appointed director general.
This has resulted in the cancellation of two high-priced projects, saving the department R18-million, said Nxesi.
The minister said that in light of these recurring problems, they have started to enhance investigating capacity within the department.
In the short term, as part of the funding for the turnaround, an internal audit was empowered to commission forensic investigations and some 19 investigations have been completed.
The department is also establishing an internal compliance and enforcement unit – as advised by the South African Revenue Service – as part of a separate risk management branch.
Nxesi said they were establishing a separate supply chain management branch, where they will work closely with the national treasury to review and strengthen supply chain management processes.
The department is also, for the first time, developing an immovable assets register.
'This is a real game-changer'
Nxesi said the state land reconciliation with the deeds office records has been substantially completed and the asset register updated – led by auditing firm Ernst & Young, which was working with an official in the department. This involves checking the records of some 180 000 land parcels, ascribing custodianship to the responsible department or level of government and starting the vesting process where necessary.
“The figures we now have will form the basis of a physical verification process due to commence in July 2013.
“The aim is to substantially complete the immoveable assets register by March 31 2015,” he said.
The department still has to allocate custodianship to some 4 500 land parcels, and approximately 24 000 land parcels need to be vested.
“My main point although this is a lengthy exercise, I am very confident that we are on track for the creation of an asset register that will, for the first time ever, accurately reflect the state’s assets.
“Let me make a further point that this is a real game-changer. With a sustainable register of state immoveable assets in place, we will have at our disposal the tools to leverage this massive property portfolio for economic development,” said Nxesi.
State property has an estimated value of R30-billion – approximately seven times the value of the largest private property portfolio.
Nxesi will deliver the department’s budget in Parliament on Wednesday morning.