Address by Marius Llewellyn Fransman, Deputy Minister of International Relations and Cooperation and Provincial Chairperson ANC Western Cape delivered at the Progressive Professionals Forum (PPF) at Kelvin Grove, Newlands, Cape Town at 18:00 on Monday October 21 2013

Programme director;

Honourable Minister Rob Davies

Leadership of ANC PEC,

Leadership, members and supporters of the PPF;

Ladies and gentlemen;

It gives me great pleasure to address this gathering on the occasion of the launch of the Western Cape Chapter of the Progressive Professionals Forum. Allow me at the outset to express my gratitude to the leadership and membership of the PPF for this opportunity to share some thoughts and perspectives.

Most of you would have followed the public debate in the media over the past few days regarding the role of the DA government in pursuing an anti-transformation agenda in respect of the provincial state property portfolio. I would like to focus my remarks on this topic today. However, before I do so i would like to just say a few words regarding the Progressive Professionals Forum.

Professionals constitute the heartbeat of the Western Cape economy. This is by and large because the services sector is one of the top contributors to the provincial GDP in fact according to the Provincial Economic Review Outlook Report released two days ago, it contributes 32.7% of the total GDP ranked 2nd in size after agriculture.

I raise this not because of any mundane reason but for the fact that the transformation agenda has taken root to such an extent across a broad spectrum of the economy and social life of the Western Cape that it merits some more profound research and analysis. It would therefore be interesting and instructive to look at the following:

i. The size and ownership profile of the services sector.
ii. The key transformational goals and challenges.
iii. How the sector engages with the state, province and city, in particular.
iv. In respect of the latter, to what extent the DA government has marginalised
 black professionals in terms of employment, procurement and out-sourced .contracts, promotions, and skills development and training.

As we traverse this second phase of our transition to economic freedom, you as professionals constitute an important front of struggle as we confront the many challenges head on. Undoubtedly, many if not most of you have been the victims of the DA governments policy of white economic empowerment and ensuring that for them privilege is perpetuated at all costs.

The Progressive Professionals Forum must therefore be congratulated for its visionary stance and for taking up the advocacy of the interests of this important stratum of our society. Such forums enable us to mobilize like-minded people to identify with a common and shared interest in terms of networking and professional advancement and faciliatates the mobilization of a critical mass of professionals in the service of a people's path to power.

We are now crossing the threshold of more than three centuries of history of plunder, pillage and persecution that has shaped the physical and spatial realities within which we find ourselves. Many may ask what the fuss is all about ? The answer is simple. The problems faced by the historically disadvantaged with reference to questions of land and the built environment are deep rooted. It is compounded by the fact that two decades of democracy has produced limited results in terms of transforming the relations of property ownership.

The mainly white land and property owners have significantly increased the value of their asset base through organic growth (increase in value over time), new investment in infrastructure assets (expansions, upgrades and refurbishments), and green-fields investments (building new buildings).

As the axiom goes "no dominant power elite will give up power willingly". Given the vested and invested interest within this sector now valued in trillions of rands it is no wonder that there is stasis in engendering change. To understand this phenomenon, let's for a moment take a step back and zoom into the structure, size and make-up of the global property market. Global Industry Analysts,(GIA)Incorporated recent industry report estimates that the Global Real Estate Market will reach US$24.7 Trillion by 2015.

A February 2006 Progress Report of the Panel of Experts on the Development of Policy on the Regulation of Ownership of Land in South Africa by Foreigners [Non-Citizens], The national division of land ownership in South Africa reveals that 76,2% of the total land surface of the country is privately held, and that the rest is held by the state (20,4%) or in trust on behalf of the state (3,4%).

The South African property sector is worth R4.9-trillion, according to research released by the Property Sector Charter Company in Johannesburg in September 2013. The report says "By determining the size of the South African property sector, we are moving towards a proper baseline measure to assess market size and its components, the scale of different services and activities within the sector."

According to the Charter Council's study, only 1% of the country's land is urban and residential, about 73% is natural pasture, approximately 12% is agricultural and the remaining land is comprised of conservations and reserves. It also indicates that about two-thirds of the property owned in South Africa is residential and worth R3-trillion, while commercial property is worth R780-billion.

The report further states that "undeveloped land that is zoned for development is valued at R520-billion and publicly owned property, including national, provincial and local government and state-owned enterprises, is worth R570-billion."Retail property has the highest value of the commercial property sectors in South Africa at R340-billion, followed by office properties at R228-billion and industrial properties at R187-billion," Charter Council report further says that "Representing a small comparative value of R25-billion is hospitality, leisure and 'other' property."

Let's look at some other features of the South African real estate market. According a Business Day Report of May 2013, the South African listed property market is 48 times the size it was 12 years ago, the unlisted sector remains substantial, holding some of the country's most prized assets. Furthermore it states that ‘the market capitalisation of the listed sector has grown from R5bn in 2001 to R240bn today."

Furthermore, Jess Cleland, South Africa research director at Investment Property Databank (IPD), says the IPD estimates that about 54% of the country's professionally managed investment property is listed - referring to property held to receive rental income. This means "a significant portion of the market is unlisted".

This is where the proverbial tackie hits the tar as Thomas Matlala, president of the South African Institute of Black Property Practitioners, says in the same report of May 2013 that while the sector has seen transformation since the 1990s, only about 5% of government leases are through BEE participants.

If this is correct, then we must look much closer at what we know about the Western Cape real estate property sector and its transformation. Much of the debate over the past week or so has centred around the details of ownership in the property sector and the imperatives of transformation. Here is what we know. According to the 2008 Annual Report of the Western Cape Department of Transport and Public Works the Western Cape Government owned and managed a property portfolio of R50 billion.

What is our approach and framework of engagement? Our approach is governed by The Constitution of the Republic of South Africa, Act 108 of 1996, in inter alia section 9 on equality (and unfair discrimination) in the Bill of Rights, states the imperative of redressing historical and social inequalities." This is further defined in the transformation charter as contemplated in the Broad-Based BEE Act (No 53 of2003) (BBBEE Act) and the dti Codes of Good Practice on BBBEE and lays the basis for the development of a code of good practice for the property sector, as envisioned in Section 9(1) of the BBBEE Act;

The Property Transformation charter further aims to promote the objectives contained in section 2 of the Broad-Based Black Economic Empowerment Act 53 of 2003 as these relate to the Property Sector and in particular, but without limitation:

3.1 Promote economic transformation in the Property Sector in order to enable meaningful participation of black people including women;

3.2 Unlock obstacles to property ownership and participation in the property market by black people;

3.3 Promote property development and investment in under-resourced areas which enhances basic infrastructure, encourages investment and supports micro and small enterprises;

3.4 Achieve a substantial change in the racial and gender composition of ownership, control and management and enhance the participation of black people, including black women and designated groups in the property sector;

3.5 Promote employment equity in the property sector and encourage diverse organizational cultures; [the charter lists ten other aims]

In view of this, our position is that one must look at the transformation of the entire value chain in the property sector and ask the DA government the following questions:

1. What is the value of all property deals over the past four years?

2.  Who are the companies that participated in these deals?

3. What is the empowerment status of each company?

4.  What is the duration of each lease agreement?

5. What is empowerment status of each professional service in the value chain? For example lawyers and conveyancers etc.

These are issues which we must hold the DA government and Premier Zille accountable for because over the past four years they have single-handedly killed off more black contractors, black SMMEs and women entrepreneurs through reverse empowerment of the privileged white companies; They also put an end to Mama's specials in the property development sector. Under their watch road-construction only goes to the privileged few; property leases are the privet' of mainly white privileged property companies.

Ladies and gentlemen: as a consequence the empowerment indicators and women empowerment in the Western Cape has suffered severe reversals. This has resulted in the ANC being inundated with complaints and calls for intervention. For this reason we have called for an Imbizo for Black Property Developers, Black and Women Construction companies, Black entrepreneurs, contractors and other affected parties to engage on this crisis and consider what corrective measures to institute when the ANC is in power again in 2014.

We call on you to take up this campaign in all earnestness and ensure that the DA government is held accountable for the maverick style in which it approaches the sensitive issues of transformation.

I want to close by highlighting one final point which demonstrates what we have been saying about the DAs sophisticated designs for bringing back Apartheid. Over the past few days there has been a shift in the terminology that they use to describe the type of society that they wish to create. Premier Zille in her address on the DAs Land reform policy green paper, MEC Winde in his Provincial Outlook Report and Economic Overview alludes to it. The Mazibukos, Maimane's and Seremane's have been quiet on the matter.

After two election manifestos that have failed the historically disadvantaged majority of people in the Western Cape, and all the hot air that they have been spewing about the Equal Opportunity society that they wish to create, they have now by stealth slipped in a change towards creating an "open opportunity society". Well, the fact of the matter is without transformation, redress and restitution, an open opportunity society is an apartheid society of unequal access to opportunities based on the historical imbalances in the structure of the economy at all levels. This is the type of society that the Zille and DA government advocates.

The African National Congress (ANC) strives for the realization of a National Democratic Society that is non-racial, non-sexist, democratic, just an in which all can enjoy prosperity. This is what we have been striving for throughout our history and to this end we have expended all our efforts over the past two decades. We must take back the Western Cape in 2014 to take forward this progressive agenda, and I call on all progressive players individuals and organization in the run up to 2014 to take your rightful place in the ranks.

I thank you!

Issued by the ANC Western Cape, October 22 2013

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