The South African government is considering a further investment of up to R2.2 billion in the redevelopment of Telkom Towers in Pretoria, despite having already spent R1.4 billion on the complex. The proposed redevelopment involves the refurbishment of all nine buildings under a rehabilitate-operate-transfer model, which would provide the state with 106,000m2 of gross leasable area to maximise revenue.
Public Works and Infrastructure Minister Dean Macpherson announced that the department would issue a Request for Information to test private-sector interest in the redevelopment. The project aims to allow government departments currently housed in costly private leases to return to state-owned buildings and create an opportunity for the Public Works and Infrastructure department to provide accommodation to private-sector tenants.
However, parliamentarians have raised concerns over the R776 million in financial losses directly attributed to the historical mismanagement of the property. The South African Police Service (SAPS) was identified as a potential user of the complex before it was transferred to the state in 2016, but in 2024, Parliament noted that about 90% of renovations had been completed, yet the building remained uninhabitable.
The Portfolio Committee on Public Works and Infrastructure chairperson, Carol Phiri, emphasised that the losses linked to the property must be accounted for and that those responsible must be held to account. Phiri insisted that a forensic investigation into Telkom Towers is necessary to quantify the losses and start recovery processes before the new model is advanced.
The South African Property Owners Association chief executive, Neil Gopal, suggested that the redevelopment could make commercial sense if the government establishes that the project is financially viable and supported by sufficient market demand. Gopal added that a market study of whether the precinct or node requires more commercial use would also be needed.
The proposed redevelopment's financial model would likely be governed by National Treasury guidelines and recommendations on public-private partnerships. Macpherson stated that the Request for Information would test the project's commercial viability and bankability, including funding assumptions and conditions for private-sector participation.
The department's approach involves a Request for Qualification process to identify companies with the technical and financial capacity to undertake the redevelopment, before qualifying bidders are invited to submit proposals. The redevelopment of Telkom Towers is part of a broader precinct-scale approach, which may include Public Works House and the Central Government Offices.
Key points
- The South African government is considering a R2.2 billion redevelopment of Telkom Towers in Pretoria despite R1.4 billion already spent and R776 million in reported losses.
- Parliamentarians are demanding accountability for the losses linked to the property and insisting on a forensic investigation before the new model is advanced.
- The proposed redevelopment's financial model would likely be governed by National Treasury guidelines and recommendations on public-private partnerships.
