The South African government is planning to redevelop Telkom Towers in Pretoria at a cost of between R1.8 billion and R2.2 billion. Public Works and Infrastructure Minister Dean Macpherson stated that the project would involve refurbishing all nine buildings under a rehabilitate-operate-transfer model. The redevelopment aims to provide 106,000m2 of gross leasable area to maximize state revenue.
The project has raised concerns among parliamentarians, who argue that the government must account for losses already incurred before committing to another major investment in the complex. The state has already spent about R1.4 billion acquiring, renovating, and maintaining the complex, with a further R776 million in financial losses attributed to historical mismanagement.
The South African Police Service (SAPS) was initially identified as a potential user of the complex, but it has failed to fully occupy the building. In 2024, Parliament noted that about 90% of renovations had been completed, yet the building remained uninhabitable. The committee has raised concerns over SAPS's failure to occupy the complex and questioned the continued cost of private leases while state-owned buildings remain vacant.
Portfolio Committee on Public Works and Infrastructure chairperson Carol Phiri emphasized that losses linked to the property must be accounted for. She stated that the Public Finance Management Act (PFMA) requires that losses be determined, money be recovered, and those responsible be held accountable. The committee has repeatedly requested a forensic investigation into Telkom Towers.
The committee also requires Parliament to be given the necessary information to assess the proposed partnership and exercise its oversight role. South African Property Owners Association chief executive Neil Gopal suggested that the redevelopment could make commercial sense if the project is financially viable and supported by sufficient market demand.
Gopal added that a market study would be needed to determine whether the precinct requires more commercial use. He also recommended that the government examine the return on investment and consider whether the redevelopment should be undertaken in phases. The approach is not new, with Intersite, a state-owned entity, having successfully implemented a similar model in the 1990s.
The Department of Public Works and Infrastructure will issue a Request for Information to test private-sector interest in the redevelopment and assess its commercial viability and bankability. The RFI will be followed by a Request for Qualification process to identify companies with the technical and financial capacity to undertake the redevelopment.
Key points
- The South African government plans to redevelop Telkom Towers in Pretoria at a cost of up to R2.2 billion.
- Parliamentarians have raised concerns over past losses and financial viability.
- The redevelopment aims to provide 106,000m2 of gross leasable area to maximize state revenue.
