The government will also develop a national price preference system to curb overcharging by service providers.

The review of lease agreements was announced by Minister of Finance Pravin Gordhan and his Public Works counterpart, Thulas Nxesi, in parliament yesterday. Nxesi, who took over at Public Works four months ago against a backdrop of an embarrassing scandal involving top politicians, said the objective of the audit was to:

• Identify irregularly contracted leases;
• Itemise debts to the department;
• Establish a reliable lease register; and
• Provide data for a review of the lease and property management system of the department.

The audit will be conducted with the Treasury.

Nxesi admitted that his department lacked the capacity to manage the government's massive lease portfolio and it was therefore necessary to ask for help from the Treasury.

Nxesi said the Special Investigating Unit had identified several questionable lease agreements, since referred to the National Prosecuting Authority.

Nxesi said he would ask the courts to nullify leases that had been entered into illegally.

"If our information is reliable and credible, we're talking [about] 3867 [leases] . and estimated annual rents of R3.1-billion - that's a lot of money," he said.

Nxesi said five officials in his department had been suspended and charged with misconduct related to irregularities in the leasing of office space .

The renting of office space by the government has been in the spotlight since the Sunday Times exposed irregularities in the leasing of a building by the police and Public Works from property tycoon, Roux Shabangu.

The questionable deal has led to the suspension of national police commissioner Bheki Cele and the dismissal of Public Works Minister Gwen Mahlangu-Nkabinde from the cabinet.

The parliamentary police portfolio committee said on Tuesday it was cheaper for government departments to build their own office than to lease space.