Last week, the Portfolio Committee spent hours interrogating the departmental budget, the more we probed, the more I realised that we hear the same thing over and over, and at the end of the day nothing has happened or there's no changes except the billions on the balance sheets. It is evident that the department is having major challenges. Minister, you require greater oversight combined with a sound legislation, if you wish to stem the current financial losses or troubles, even the wasteful expenditure within this department.
My first concerns regarding the department's mandate, is that it is supposed to be the custodian and portfolio manager of government immovable assets. I am concerned that the department's legal authority as a landlord of the state is somewhat weakened in term of its mandate due to the absence of empowering legislation that provides the necessary authority to act decisively.
While your department is responsible for collecting management fees and ensuring that the maintenance management budget is ring-fenced, the absence of legislations allows the department and Property Management Trading Entity and the Independent Development Trust to spend funds without having been able to recover anything from other departments. As a result, it becomes difficult to complete the infrastructure projects, and that also threatens the sustainability of the department.
This also results in a failure to unlock the financial values of immovable assets held by government which is required for the maximum benefit of our country. Your department is also responsible for spearheading the verification of debts owed to
municipalities, by national and provincial governments. But according to the Financial and Fiscal Commission report, both national and provincial governments have failed to pay the municipalities.
Shockingly, the top three defaulting departments is Public Works at R2,7 billion, followed by Basic Education and Rural Development. The leading provincial department defaulter is also Public Works at R2,5 billion, that amounts to 69% of the provincial department debt to the councils. My second concern regarding the ministerial houses, in a response to a DA parliamentary question, the former Minister revealed that your department spent more than R45 million on the maintenance of ministerial houses in Cape Town and in Pretoria.
This opulence clearly indicates that the skewed priorities in your department and is an insult to our poor and unemployed citizens. Why these renovations have been taken at such a great cost while the country's economy is ailing? Someone must be held accountable, Minister. The taxpayers have spent millions on
those mansions, whereas it costs the Ministers and Deputy Ministers personally between R900 and R1 200 per month.
But what is more disgusting today than the misuse of those funds, even today, currrently about R1,2 million is been owed to the department because Ministers didn't pay. How did this happen? Your department failed to create debit orders from their salaries, due to your own incompetence of the department. Now I ask you Mr Minister: How is your department planning to recovering funds from those Ministers and MPs who have resigned?
Lastly, I would like to talk about the Property Management Trading Entity, PMTE, which was established in the 2015-2016 financial year. Its main responsibility is to manage immovable properties as well as the accommodation of the client departments by implementing the Government Immovable Asset Management Act and managing the immovable Asset Register. The register needs to be updated and monitored regularly to ensure that it provides a true record of government immovable assets across all spheres of government in order to provide an accurate balance sheet for government.
To do this, the PMTE was allocated about R16,7 billion. I accept that there have been improvements especially in the leasing portfolio. However, the entity still faces challenges because other client departments have failed to make sure that they pay on time and secondly, PMTE structure itself, it also doesn't allow it to do its work efficiently due to the lack of required specialist skills that we mentioned here, which includes the chartered accountants, property lawyers, etc.
Currently, PMTE is having an acting Head which is also bringing instability. The Auditor-General is also concerned about the PMTE that it had a bank overdraft of R2,3 billion as of 31 March 2018. So, the liabilities of PMTE exceed the assets. Currently, it is bankrupt. So we need your direction, hon Minister. [Applause.] [Time expired.]