Gauteng Provincial Government would like to inform the citizens of the province and all its stakeholders of the executive decision taken by Cabinet to dispose of residential immovable assets that have been identified as not being at the core of the business of the government.
The custody and maintenance of these assets, in the form of vacant and improved residential properties, are a financial burden on the scarce public resources that are expected to service various competing needs of Gauteng residents. The identified properties do not contribute to the generation of revenue for the province and would be put to better use best sold to the public and interested entities.
The disposal of the properties will be implemented in line with the mandatory legislative prescripts such as the Government Immovable Asset Management Act of 2007 (GIAMA) and the Public Finance Management Act (PFMA). The disposal will be based on the competitive market values of the property.
The province is currently consulting with all stakeholders and taking necessary steps to communicate its intention to dispose. Properties identified for disposal will be sold in their current condition on an “As is” or “Voetstoots” basis. This means that the province will not undertake any improvements on the identified properties.
The province has therefore appointed an Auctioneer to undertake the disposal process from a provisional list of four hundred and thirteen (413) properties of which seventeen (17) have been cleared for the first batch to be disposed. This number has a potential to increase or decrease based on the outcomes of our consultations with user Departments.
I therefore wish to announce that the first public auction will officially open on Monday, 5 December 2016 and close on Monday, 12 December 2016. The first auction will feature these 17 properties which mainly consist of vacant stands located in Heidelberg and Mogale City.
Potential buyers are encouraged to register on our Auctioneer’s website – www.tirhani.co.za – before the official opening of the auction. The official residence of the Premier of Gauteng Province will also be auctioned during this period. Potential buyers are encouraged to contact the Auctioneer to view the property or obtain further details.
Furthermore, I wish to announce that the method of disposal will not be the traditional live auction where potential buyers are gathered under one roof and the property is auctioned in a matter of minutes. Rather, the province has opted for an online auction disposal methodology.This includes provision for an internet-based platform for a pre-determined period of time with each lot sequentially closing at a given time. We are convinced that the on-line auction will provide for a transparent, auditable, convenient and competitive asset disposal process.
The Auctioneer will manage the entire process, including in-loco inspections, marketing, communication and ultimate disposal using electronic online auction methods.
Prospective buyers will bid online from the security and comfort of their offices or homes. Other benefits of the online auction is that it will enable buyers to bid against each other with the system acting as an invisible auctioneer and regulating bid increments and the entire bidding process.
Bid prices are updated in real time as bidding progresses and the highest bidder wins at the close of the bidding process. Given that the online auction opens for eight calendar days, bidders will have the advantage to review their decisions, seek advice or second opinion before updating their bid submissions and taking final decisions.
Furthermore, education and assistance will be provided to those wishing to participate by are unfamiliar with the process. In this regard, we have established an information help desk on the Ground Floor at our at No. 18 Rissik Street offices, here in the JHB Central Business District (CBD). We will also be working with localised estate agents to established help desks to provide further assistance to the underlying communities.
I wish to assure the people of Gauteng that the disposal process will be done in a transparent, accountable and fair manner. Furthermore, we will make sure that the process does not favour any one person over another.
Regarding those properties that are occupied, the Department is taking steps to ensure that the occupants are given a fair opportunity to participate in the process. We are currently consulting with all stakeholders and taking all the necessary steps to communicate our intention to the affected households.
Some of these properties are occupied by government employees, while others have been improved over time by the occupants. Some occupants are legal and compliant tenants who have entered into valid lease agreements with the Department. Equally, some occupants are non-compliant and are staying in these properties without valid leases.
However, as we proceed with our decision to auction, we will ensure that each case is resolved amicably on its merit. Occupants who have expressed an interest to purchase will not have to participate in the auctions, but will be given the Right of First Refusal (ROFR) to either buy the properties they are currently occupying outright for the sworn open market valuation value, or to match the price of the highest bidder at the close of the auction. The province believes that such a disposal strategy is in the best social and economic interest of the communities and will also give people the opportunity to own and improve property.
In cases where the households are not interested in purchasing or unable to afford, the property will be auctioned to the highest bidder. However we will take appropriate interventions to ensure that those properties are vacated peacefully in order to avoid violent evictions and acrimonious legal actions. We will also make sure that we provide appropriate support to ensure that our interventions are as humane and possible.
The appointed Auctioneer has been instructed to undertake extensive marketing and communication in this regard.
We are of the view that the decision to dispose all non-core and non-strategic residential immovable properties will not only save the province upkeep costs such as maintenance, rates and taxes, security and devaluation through wear and tear as well as acts of vandalism, but will also raise much needed additional resources to fund Gauteng’s priority programmes.
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent. Sign up here.