Minister Dean Macpherson has confirmed that landlords are claiming over R50 million in damages linked to disputed leases, while highlighting ongoing failures affecting DIRCO, COGTA, and other departments across the public sector.
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Public Works and Infrastructure Minister Dean Macpherson says failures in state leasing processes are creating what he described as “self-created emergencies”, exposing government to legal disputes, financial losses, and irregular expenditure.
Macpherson was speaking during a media briefing on Wednesday ahead of his Budget Vote and said the department would outline reforms aimed at improving oversight, strengthening procurement compliance, and addressing systemic weaknesses in public property management.
He said the department could not be rebuilt without confronting internal dysfunction.
“We cannot build a capable department on top of broken systems,” Macpherson said.
Macpherson said the reform agenda underway in the department was aimed at improving accountability, protecting public money, and addressing long-standing institutional failures.
He said the department could not be rebuilt without confronting internal dysfunction.
“We cannot build a capable department on top of broken systems,” Macpherson said.
Macpherson said the Property Management Trading Entity (PMTE) remained a key concern, describing it as financially unstable and operationally weak.
He said the PMTE had not achieved a clean audit since 2014 and that its overdraft had doubled to nearly R4 billion over the past 20 months, raising serious concerns about financial sustainability.
Despite government owning thousands of buildings and large portions of land, Macpherson said the state continues to spend approximately R6 billion annually on private leases, many of which raise concerns around compliance, procurement integrity and value for money.
“This is not an abstract dysfunction. It is showing up in real lease transactions affecting real client departments and creating real risks for the state,” he said.
Macpherson said lease breakdowns and delays were affecting several departments, including the Department of International Relations and Cooperation (DIRCO), Cooperative Governance and Traditional Affairs (COGTA), the Department of Women, Children and Persons with Disabilities, the Department of Forestry, Fisheries and the Environment, and the Judicial Inspectorate for Correctional Services.
He said 15 lease agreements returned on 10 December had not yet been resubmitted with required amendments, while other leases dating back to May and October 2025 remained unresolved.
Macpherson said internal investigators had identified a pattern described as “self-created emergencies”, where delays and poor planning are used to justify bypassing normal procurement scrutiny.
“The state cannot continue to tolerate a system where poor planning, delays or internal obstruction are allowed to create an emergency,” he said.
He said the failure to finalise accommodation at a CSIR facility contributed to urgency that was later used to justify alternative arrangements for the National Prosecuting Authority’s Investigating Directorate Against Corruption (IDAC).
Macpherson also referred to a lease involving IDAC, where internal findings pointed to accommodation planning failures linked to the broader procurement process.
He said the R69.5 million lease at 146 Lunnon Road in Pretoria was concluded for the then Department of Public Enterprises despite the building never being occupied following restructuring.
Macpherson confirmed that landlords are now claiming damages of more than R50 million against the department linked to disputed lease arrangements, which may expose the state to further legal and financial risk.
He added that government would defend the matter but stressed the need for stronger oversight and consequence management to prevent similar failures.
Macpherson said the department’s broader reform agenda was also aimed at addressing governance weaknesses across state systems and improving how public assets are managed.
He said the reforms were necessary to ensure that public property transactions are legally compliant, properly planned, and aligned with public interest.
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