SA Allocates R7.8 Billion to Public Works to Accelerate Infrastructure Reform and Asset Recovery

South Africa’s Department of Public Works and Infrastructure will receive an allocation of R7.8 billion for the 2026/27 financial year as government intensifies efforts to overhaul infrastructure delivery, improve management of state assets and unlock investment through large-scale public infrastructure reforms.

Tabling Budget Vote 13 on Wednesday, Minister of Public Works and Infrastructure Dean Macpherson outlined an ambitious reform agenda focused on infrastructure investment, urban renewal, anti-corruption measures and improved governance within public property management systems.

Government said medium-term funding for the department totals approximately R24.6 billion, with major emphasis placed on restoring credibility and efficiency within infrastructure institutions while reducing long-standing waste and underutilisation of state assets.

Majority of Funding Directed Toward Transfers and EPWP

According to the department, approximately R6.4 billion of the allocation will go toward transfers and subsidies, including support for public entities and conditional grants linked to the Expanded Public Works Programme (EPWP).

Meanwhile, the Property Management Trading Entity (PMTE) — responsible for managing government property assets — is projected to generate approximately R18 billion in revenue during the year ahead.

The funding forms part of broader government efforts to stimulate infrastructure-led economic growth while addressing unemployment, urban decline and state inefficiencies.

Infrastructure South Africa Positioned as Key Investment Driver

Government identified Infrastructure South Africa (ISA) as a central mechanism for unlocking large-scale infrastructure investment and improving the state’s ability to prepare credible, investment-ready projects.

At the recent South African Investment Conference, ISA helped secure a US$1 billion investment pledge — equivalent to approximately R17 billion — linked to a proposed bioethanol production facility.

Officials also confirmed that the Minister of Finance has approved the formalisation of ISA, with draft legislation expected to be gazetted for public comment within the next two months.

Analysts say the formalisation of ISA could become a major milestone in improving infrastructure planning, coordination and investor confidence in South Africa’s infrastructure pipeline.

Johannesburg CBD Set for Major Infrastructure Revival

Among the department’s flagship projects is a new R769 million Deeds Office currently under construction in Johannesburg’s inner city.

Government described the project as the first new high-rise development in Johannesburg’s CBD in more than 20 years, signalling renewed efforts to revitalise the city centre and stimulate urban regeneration.

The development is expected to:

• Reduce government rental costs

• Improve service delivery

• Contribute to inner-city renewal

• Support broader economic activity in Johannesburg’s CBD

Officials indicated that the project is scheduled for completion in October.

Government Targets Long-Delayed Infrastructure Projects

The department said it has prioritised unblocking delayed and stalled infrastructure projects through its Strategic and Special Delivery Unit.

Progress highlighted includes:

• Handover of the Durban Forensic Science Laboratory to the South African Police Service within 12 months

• Movement on the Sarah Baartman Centre of Remembrance, where a contractor has finally been appointed after delays lasting more than a decade

Government said these interventions are intended to improve project execution and restore confidence in public infrastructure delivery systems.

Independent Development Trust Undergoing Recovery

Minister Macpherson said the Independent Development Trust (IDT) — previously associated with corruption and operational instability — is showing signs of recovery.

According to the department:

• The IDT’s confirmed project order book has grown to R6 billion

• Monthly cash flow has tripled

• During 2025/26, the IDT completed 279 social infrastructure facilities, exceeding its target of 244

The improvements are being presented as evidence of efforts to stabilise state infrastructure institutions and strengthen governance.

State Properties Repurposed for Social Development

The department also outlined plans to repurpose unused state-owned properties for social and developmental purposes.

During the past financial year:

• More than 46 government-owned properties were made available for:

  • Shelters for victims of gender-based violence and femicide

  • Skills development centres

Government additionally confirmed that it is proceeding with the disposal of 801 unused state properties in an effort to reduce inefficiencies and unlock value from dormant assets.

Crackdown on Corruption in Construction Sector

The department highlighted intensified anti-corruption efforts within the construction sector.

According to Macpherson:

• The Construction Industry Development Board (CIDB) removed 52 contractors from the Register of Contractors for fraudulent activity over the past 22 months

The Minister noted that only two contractors had been blacklisted during the previous 22 years, describing the recent actions as part of a broader effort to restore accountability within the industry.

New EPWP Reform Programme Introduced

Government also announced reforms to the Expanded Public Works Programme through a pilot initiative called Working on Infrastructure.

The programme aims to address both unemployment and infrastructure maintenance challenges by offering:

• Longer-term employment opportunities lasting eight to 10 months

• Skills development

• Workplace experience

• Digital recruitment systems designed to reduce political manipulation and gatekeeping

Officials say the initiative reflects growing efforts to align public employment programmes with infrastructure maintenance and skills development objectives.

PMTE Still Faces Deep Governance Challenges

Despite reform efforts, government acknowledged that significant governance and operational challenges remain within the Property Management Trading Entity (PMTE).

The department said the PMTE has:

• Never achieved a clean audit since its establishment in 2014

• Been affected by:

  • Weak systems

  • Inflated leases

  • Underutilised buildings

  • Financial pressures

Government further revealed that South Africa continues to spend around R6 billion annually on private leases despite owning thousands of buildings and millions of hectares of land.

Telkom Towers Audit Exposes Asset Mismanagement

The Auditor-General’s findings regarding Telkom Towers were cited as evidence of poor state asset management.

Officials said most buildings remained either:

• Unoccupied

• Underutilised

• Not used for their intended purposes

Government also disclosed that investigations uncovered approximately 60 individuals allegedly receiving salaries despite not being employed by the department, with most cases linked to KwaZulu-Natal.

Lifestyle audits of senior officials are also underway, although the department noted resistance from some officials.

Three Major Infrastructure Priorities for 2026/27

Looking ahead, the department identified three major priorities for the coming year:

1. Establishment of the South African National Property Company

The proposed entity aims to shift government from passive property ownership toward active asset management.

Officials say the company will seek to:

• Unlock value from state assets

• Reduce reliance on private leases

• Support affordable housing

• Promote mixed-use developments

• Advance urban renewal projects

2. Expansion of EPWP Reform

Government plans to deepen reforms under the Working on Infrastructure initiative by improving:

• Digital recruitment systems

• Participant verification processes

• Long-term work opportunities

3. Small Harbour Reform

The department is also prioritising reform of small harbours to stimulate coastal economic growth.

Government said frameworks are being developed to determine the most effective use model for each harbour to support:

• Fishing industries

• Tourism

• Transport

• Small business development

Government Promises Continued Reform Push

The department said the year ahead will focus heavily on:

• Fighting corruption

• Strengthening governance

• Stabilising public entities

• Accelerating infrastructure delivery

Officials acknowledged that resistance to reform remains deeply entrenched in parts of the system but insisted government remains committed to overhauling infrastructure governance and improving public asset management.

As South Africa seeks to stimulate economic growth, attract investment and modernise public infrastructure, the reforms outlined in Budget Vote 13 are expected to play a central role in reshaping how government delivers and manages infrastructure over the coming years.