Mbulelo Tshangana, the department's director-general, told Business Report last week that the department had drafted an agreement with Transnet Properties to dispose of these properties to the Housing Development Agency or the Social Housing Regulatory Authority.
Tshangana emphasised that they were considering these properties, some of which were hostels, on an individual rather than a blanket basis.
He said these were non-core Transnet land parcels, but that the Department of Education also wanted them, because it wanted to develop student accommodation.
“It’s big and it’s on our radar screen. But in some cases they wanted to charge us R150million for some of the parcels and when we looked at them we felt we should only have to pay R10m instead of R150m,” he pointed out.
Tshangana said some of the properties were “poisoned chalices”, because they were contaminated and that the Human Settlements Department would have to clean them up first.
In some instances, they would have to evict the beneficiaries, which meant providing alternative accommodation, he said.
Tshangana added that the disposal would also be a book-balancing exercise for Transnet and it would not want to release them for free, because of the carrying value on Transnet’s balance sheet.
He said there was a debate with Transnet about the cost-recovery mechanism, but at a technical level agreement had been reached on what needed to be done.
“It’s at the level now where the ministers can take a decision,” he said.
Tshangana added that Transnet was also keen to do some joint developments on the land parcels, because it wanted to get revenue out of them, while they had recommended other parcels be transferred to the cities and municipalities because the hostels could easily be converted into community residential units.
He said the Human Settlements Department was open to joint or co-development with Transnet. “They will rely on us to package the projects, which is one thing we have mastered over the years.”