Private industry urges Government to accept help in curbing fruitless expenditure

The recent disclosure made by Public Works and Infrastructure Minister Patricia de Lille that the South African Government spent R5 billion on renting private buildings during the financial year ending March 2020, has highlighted how failing infrastructure forces government departments and institutions to procure reliable and compliant office space from private sector to a point of paying premium rates.

“The South African Government has a portfolio of more than 93,000 buildings. Many of these hold great historical value and should be more than adequate to accommodate the public servants and departments they were meant to house – provided that they were in a safe and habitable state. The fact that State departments needed to rent private buildings from landlords shows the urgent need for collaboration between the public and the private sector – especially when it comes to managing valuable property assets,” says Lydia Hendricks, Business Development Director at FM Solutions.

Hendricks explains that traditionally, Government’s approach to property management has been to steer funds towards upgrading derelict buildings at huge capital costs instead of directing enough funds toward preserving their assets.

Hendricks explains that traditionally, Government’s approach to property management has been to steer funds towards upgrading derelict buildings at huge capital costs instead of directing enough funds toward preserving their assets.

“Historically, the government was steadfast in managing their buildings themselves and applied a reactive approach. This meant that massive financial injections were needed to restore the structures to their former glory. In many cases, the renovation and repair projects were done long after disgruntled and frustrated departments had moved out to find more suitable and safe accommodation. Because some buildings were left vacant, the burden on the State’s coffers only became heavier,” Hendricks reports.

She also explains that the absence of a robust Facilities Management plan backed by a financial plan to preserve and extend the lifecycle of these assets, meant that the negative cycle continued unabated for many years.

“Owing to the size and complexity of managing buildings and assets at this scale, for many years decision makers at the top had no real data to know whether the state property assets were being effectively managed. The Government Immovable Asset Management Act (GIAMA) sought to address this, but the wheels churned too slowly. When conducting our conditions audits, we still find that some government departments have no clear understanding of what their asset portfolios need to include, nor what the true state of their assets are,” she reveals.

Hendricks advocates that fixing this problem starts with Government admitting that they need help and accepting guidance from professional Facility Management (FM) experts who will be able to give them a thorough understanding of the built-in systems, as well as develop a detailed recovery and restoration plan.

“A robust and measurable FM support plan will not only ensure building compliance, but also the sustainability and reliability of all Government’s operating systems. This includes the technology and the human resources that drive and manage it. FM is able to play a huge role in aligning service delivery and infrastructure. Because valuable assets are preserved and maintained, interruption to services are kept to a minimum and strategic objectives of the organization are met,” she says.

There are numerous ways in which partnerships between the public sector and private FM service providers will not only address inefficiencies, but will also result in immediate savings thanks to informed procurement decisions. Moreover, it can create more jobs in communities through the development of SMME initiatives, appointment of carefully selected local service providers and the training of in-house staff to run their facilities more effectively.

“I believe the current COVID-19 pandemic has brought us to the point of no return. Local and Provincial Governments are now willing to concede that they need help to in curbing ongoing fruitless expenditure, unlocking savings and turning ailing administrations around. Local governments in particular are facing serious financial deficits ahead of the start of the new financial year. Funds are required to continue operations, maintain buildings and drive the post-lockdown recovery of local economies and town centres. The only way they can do this is to join hands with the FM industry and form Public-Private Partnerships (PPP),” she implores.

“The challenges facing Government today stretch far beyond delivering frontline services, corporate strategy and income generation. More than ever before, they need to be resilient. This requires long-term thinking and deliberately improving capabilities in order to ensure they will be able to effectively deal with future challenges. During last year’s State of the Nation address, President Cyril Ramaphosa made it clear that his administration needed help to get the economy back on track. The good news is that it is not yet too late to turn the country around, but it is impossible for Government to do it alone. Going about business the same way will only continue to cost the tax payer billions of Rands and put thousands of jobs at stake. We therefore urge our country’s leaders to tap into the wealth of specialist knowledge housed in the private sector to develop workable, holistic and achievable plans that will provide the right solutions for the Government departments and the communities they serve,” Hendricks concludes.

Asset Magazine News Hub / 3 February 2021