The government has no idea which properties it owns

South Africa’s government, the country’s biggest real estate owner, doesn’t have an accurate record of its property portfolio or how it’s being utilized, and a protracted attempt to audit it has so far failed to rectify the situation.

While official records show the state owns about 88,000 buildings and five million hectares of land, which together are estimated to be worth R155 billion, Public Works and Infrastructure Minister Dean Macpherson said he had little faith in the valuation or that all the assets had been accurately recorded or captured.

“I am not happy with, and have very little confidence in, the asset-management register that has been presented to me because a lot of it does not make sense,” he told reporters in Cape Town on Wednesday.

“One property is valued at R5 million when I know that should have a 200-million-rand valuation.”

The minister, who is a member of the main opposition Democratic Alliance and was appointed to his post in June when a coalition government took office after the May 29 elections failed to produce an outright winner, said he and his advisers are still wrestling with how to address the problem.

One option is to establish a property management trading company, which would enable the government to leverage its assets to help finance new infrastructure development.

President Cyril Ramaphosa said in a March speech that South Africa needs to spend at least R4.8 trillion by 2030 on transport, water, and other infrastructure to meet its needs, with two-thirds of that amount required from the private sector.

He called for the country to be turned into a construction site to help accelerate economic growth that’s averaged less than 1% over the past decade.

The value of South Africa’s planned investment projects jumped to an annualized R793.7 billion in the first six months of this year, compared with R193.2 billion last year, Nedbank Group Ltd. said in a report this month.

The government and public corporations account for about three-quarters of the projects.

According to Macpherson, a new government office has been established to help fast-track mega-infrastructure projects. The office will also help cut red tape and attract domestic and foreign investment.

“Infrastructure South Africa will help all spheres of government to help manage and package projects that have a value of 1 rand billion and above” he said.

“This is a way to radically rethink how infrastructure projects are dealt with and how government finances them.”