• The Director-General, Mr James Maseko and his management team

• Distinguished ladies and gentlemen and captains of the Property Industry

• Ladies and Gentlemen

The New Partnership for Africa's Development (NEPAD) has identified infrastructure development as integral to poverty alleviation and economic growth. Social infrastructure such as houses, local roads, schools and other public buildings improves the quality of communities and reduces poverty. On the other hand, economic infrastructure like airports, commercial roads and accommodation, shopping malls and the hospitality infrastructure stimulate commerce and contribute to economic prosperity.

The construction and the property industries are indispensable to infrastructure development and both industries contribute directly to the development goals of the country. Historically the government has had a constructive relationship with both industries, relying on them to supply products and services in meeting the demands of development and growth.

Successive apartheid administrations however, usurped this relationship and used to further advance the system which gave rise to lopsided development with resources accruing to only one section of the population. Racially motivated legislation, such as immigration labour laws, notorious Groups Areas Act, and Land Acts systematically deprived many people access to fixed property and created a population of landless masses. Property ownership as a fundamental right and an important tenet of a free enterprise system was sacrificed at the altar of apartheid.

Ten years ago the whole nation turned its back on apartheid and set out to reverse its negative effects. The transformation of our society and our economy became the government's main focus to entrench democracy, cultivate patriotism, promote growth and alleviate poverty, and empowerment hence our announcement today to launch a process that will culminate with the

transformation of the property industry and the adoption of a transformation charter.

The National Department of Public Works (NDPW) in conjunction with the private sector has embarked on a process of establishing a transformation charter in the property sector. The charter, accompanied by a scorecard to gauge the performance of business against set targets, will serve as a strategic framework for effective transformation over the next decade and beyond. The process will help accomplish a greater sense of unity through cooperation but also address

economic and social problems associated with the property sector. The role of the NDPW is to lead all the tiers of government that have interests in the property sector. The Department expects the industry to set stretch targets to achieve the charter objectives. However should this not be achieved the Department would be forced to intervene in whatever way appropriate.

It is imperative that the NDPW plays an active role within the development of the property charter because as a custodian of government's immovable property, the Department is a key player in the property sector. Over the decades government has built an enormous fixed property portfolio through the acquisition of land and buildings as part of the public infrastructure to execute public service obligations. These fixed assets include, but are not limited to government office accommodation, official residences, and functional accommodation such as prisons, courts, police stations, military basis, hospitals, schools, clinics and libraries. Valuation for this property is ongoing but conservative estimates put the value at one hundred and twenty billion rand (R120 billion).

Consequently the South African government is considered the biggest single property owner in the Southern Hemisphere with the largest fixed asset portfolio. It is with this resource in hand (and good intentions in mind) that government is committed to ensuring:

• Universal access to housing
• Land redistribution, land reform and land tenure
• Management of fixed assets for the acceleration and enhancement of essential public service delivery
• Promotion of Broad-Based Black and Women Economic Empowerment through Fixed Property Management, Control and Ownership

It is common knowledge that by the beginning of 2004, government had managed in the preceding ten years to build one point six million houses and 700 new primary health clinics while 39 687 land claims totalling 781 648 hectares had been successfully settled. In the same period the government, through the National Department of Public Works, spent almost ten billion rand to plan and implement 7 692 construction projects involving national departments. In 2003/2004, just over a billion rand was paid in leases by government to the private property sector. The Department manages almost five thousand lease contracts as part of providing accommodation to government and its departments.

In a demonstration of a sense of maturity, the industry has come together to enter into discussions to draft a transformation charter that seeks to cultivate an environment that promotes Broad Based BEE and brings about meaningful changes in ownership, control, skills development, employment equity, procurement, enterprise development and corporate social investment. The property sector aims to address amongst other things the issue of the lack of development in the former homelands, and black townships.

Through the "Property Sector Transformation Charter Committee" and its secretariat the industry that will ensure the representation of all property related organisations across racial and gender lines. Seven (7) national bodies are actively participating to ensure the most inclusive outcome possible. These are the South African Institute of Black Property Practitioners (SAIBPP), the South

African Property Owners Association (SAPOA), the Women's Property Network (WPN), the Estate Agents Affairs Board (EAAB), the South African Black Technical and Allied Career Organisation (SABTACO), the SA Council of Shopping Centres (SACSC) and the Institute of Estate Agents of South Africa (IESA). Organised labour has also been invited to participate in all the structures. Nedlac should also be contacted to find means of involving all other social partners.

The Property Sector Transformation Charter Committee acknowledges that there are major challenges and identifies transforming a sector that is complex and yet very fundamental in creation and accumulation of wealth, as paramount.

Appropriate structures have been established to facilitate the widest possible involvement in the discussions and other forums. To this end the PSTCC brings together all constituencies to debate and finally reach consensus on the charter drafts. Technical teams have also been established to enable in depth understanding of the various focus areas of black economic empowerment and

how they should apply in the context of a property charter.

The Steering Committee will benchmark with and draw from the experiences of other sectors that have successfully launched their charters. Care will also be taken to align the property charter with the construction charter and the financial sector charters, where relevant.

The stakeholders have committed to a process that is consultative, inclusive, representative, and participative and stakeholder driven. They have pledged to work together in a spirit of mutual respect and to collectively make available the resources that are required to manage the process. They have further committee to ensuring that the final Property Charter will be unifying and will promote development and sustainability. We expect to launch a finalised charter in the

second half of 2005.

The success of the charter therefore depends on the full cooperation between government departments and private sector organisations involved in the property sector as well as full commitment of established business. As government we have committed ourselves to effective public private partnerships and will continue within the spirit of the Growth and Development Summit to engage one another in finding appropriate solutions to all our common problems.

Thank You.