REPORT OF THE PORTFOLIO COMMITTEE ON HOUSING

OVERSIGHT STUDY TOUR TO THE NORTHERN CAPE:  9 - 11 OCTOBER 2006 

 

 

A.         INTRODUCTION

 

The Portfolio Committee on Housing undertook an oversight visit to the Northern Cape from 9 – 11 October 2006.  The committee was divided into two groups.  The other group went to the Eastern Cape.

 

B.         TERMS OF REFERENCE

 

As part of the committee’s oversight responsibility, the committee’s main aims were to check the progress, pace of housing delivery, challenges experienced by the province and to ensure that government gets value for the funds voted in the province.

 

The Committee hoped to engage with the MEC, Director-General, Provincial Head of the Department, officials from the municipality and members of the public.

 

C.         DELEGATION

 

·         Ms ZA Kota-Fredericks         ANC (Chairperson)

·         Ms NB Dambuza                 ANC

·         Mr ZS Mkhize                      ANC

·         Mr AC Steyn                       DA

 

APOLOGIES:

 

·         Mr L Modisenyane   ANC

·         Ms L Chikunga                    ANC

·         Mr RB Bhoola                      MF

 

SUPPORT STAFF:

 

·                     Ms N Giba – Committee Secretary

·                     Mr S Makeleni – Committee Assistant

 

D.         FINDINGS

 

DAY 1:  9 OCTOBER 2006

           

Briefing by Mr Boeboe van Wyk, MEC of Housing and Local Government

 

Service delivery and the lack of financial viability at municipalities pose a real challenge in the province.  The main challenges are the blocked housing projects, due to amongst other reasons, irregularities by building contractors.  The solution was to remove them from the projects and institute an investigation against them.

In the 2005/06 financial year, the provincial allocation was cut by 20 million due to a decline in the population size.  Some funds from this allocation had to be used to cover costs incurred in the 2004/05 financial year, because this budget was used up at the end of October 2004.

There are weaknesses with respect to checks and verifications on subsidies and data lines are being upgraded and further investigations are taking place to improve the situation.

Cross boundary processes went smooth, but the North West province must still take full responsibility of projects in the 2007/08 financial year.

 

Presentation by Ms R Soodeyal, Executive Manager, Provincial Department of Housing

 

In the last financial year, the department over-budgeted in order to eradicate blocked projects and implement new projects.

The province has a 40 000 housing backlog, of which 19 000 was acquired from the North West province in the cross boundary process.  About 46 million used to unblock projects.  A meeting has been arranged for March 2007, to deal with cross boundary issues.

Most projects have existing infrastructure, but a few need infrastructure development.  The Ou Boks settlement is not an informal settlement, it needs re-planning and redevelopment.

The department builds 36 to 40 square metres houses, in relation to the national norm of 30 square metres.  95% of provincial housing has a full water-borne system.

The capacity building unit of the department is not fully fledged.  The department needs to fill vacant posts to save money used on consultants.

The internal audit unit started with investigations on the Housing Subsidy System (HSS) after the Scopa report was released.

Municipalities are used as developers in housing projects. This is due to their knowledge of where development needs to take place and they operate with Project Managers employed by the department.

Challenges experienced by the department ranges from difficulties in subsidy allocations, quality of houses to capacity problems at regional offices and municipalities. 

 

Interaction with the Mayor and Municipal Councillors – Sol Plaatjie Municipality

 

Municipal houses built before 1994 (old stock) are falling apart. 

Current projects are left incomplete and contractors vanish before completion. 

Intervention requested from the department on the slow pace of housing delivery at some areas, quality of houses, title deeds to be granted to rightful owners and the criteria used to choose contractors for projects.

The greatest challenges of municipalities are:  beneficiaries renting out houses to foreigners, non payment of rates and tempering with electricity.

 

Site visits: 

 

·         Housing Support Centre in Galeshewe – An initiative of the provincial housing department with its main responsibilities as the construction of low-cost housing and the promotion of small contractors.  The centre initiate, conceptualize and implement projects of the department.  It is divided into two sections, namely, housing development and subsidy processing.  The centre is also responsible for the maintenance of waiting lists.

·         Greenpoint housing project – Project exist for only 7 months. Complaints by beneficiaries on the quality of houses and the water and sanitation system eg cracked walls and no drinking water in the kitchen or outside the house and no proper inspection done on the houses before occupation.

·         Hull Street: Social Housing project (2004) – This is an accredited social housing institution (company) established to cater for those who do not afford to buy a house or those not qualifying for a housing subsidy (rental stock).  Receive funds from the Netherlands as to-up loan.  About 127 houses are built to date.  The second phase (rent to buy), which consists of 373 housing units would commence in February 2007 and would be provided to those who cannot access bonds at banks.   Families were identified and trained on the use of alternative sanitation, grey water handling and the advantages thereof.  

 

DAY 2:  10 OCTOBER 2006

 

Interaction with the Mayor and Municipal Councillors – Phokwane Municipality

 

The municipality experiences capacity problems, as a result the Department of Provincial and Local Government (DPLG) has intervened by deploying two engineers to this area.  The involvement of municipality only started in 2004, the Provincial department was dealing directly with housing provision.  Currently in the process of building 123 housing units, which were outstanding from 2004.  For the 2006/07 financial year, will build 131 houses.  The Jan Kempdorp project was scaled down from 900 to 647 subsidies, due to financial constraints.  Funds were transferred to the contractor in advance but the contractor disappeared with government funds.  NHFC has been introduced to this municipality to negotiate the possibility of providing a loan and NHBRC with the supervision of projects, Thubelisha to assist in unblocking these projects.

Funds were allocated for the Pampierstad project of 274 units in the 1995/06 financial year, a project inherited during the cross boundary process.  Some of the houses were built and building stopped due to a legal process in progress.  Project started again on the old allocation and there were problems with the contractor, who was underperforming.  Investigations are underway.  The North West government is not in a position to top-up funding for the completion of this project. 

 

Site visits:  Hartswater and Pampierstad

 

  • Bonita Park 75 project – Project was started in 2001 for 75 housing units and was one of the blocked projects.  Money was transferred to individual beneficiaries in advance, and they would in turn hire a conveyancer to drive the process.  Also, a particular counsellor received money on behalf of the beneficiaries. Despite all the irregularities that have taken place, construction has started again and would be completed by early December 2006.
  • Bonita Park 223 project – Divided into two phases, the first being 100 housing units which have been completed.  Funding is available for the outstanding 123 units and construction should start in the week of 16 October 2006.  One of the houses is used as a workshop and the beneficiary stays in a shack at the back of the house.
  • Thagadipelejang 413 project – In 2003, a contractor was paid upfront R3,5 million rands to build houses.  Contractor vanished with all government funding, leaving the area with 77 foundations, without a single house built.  Legal proceedings are underway and a Project Manager has been appointed to continue with the building of 130 housing units.  The DPLG intervened and is conducting investigations into this irregularity.  In turn, the contractor is suing the municipality for R10 million rands.
  • Pampierstad 900 project – Project located on a cross boundary site (Northern Cape and North West).  Project was started in 1995. About 400 housing units still need to be completed.  The area is not electrified, but there are agreements between Department of Minerals and Energy and Eskom to install electricity and water by 2008/9, provided that the area is 80% occupied.  In the interim, 385 houses would be electrified.

 

Meeting with stakeholders/public at Sol Plaatjie Municipality

 

In attendance:  MEC van Wyk, PC on Housing Members, Mayor of Sol Plaatjie Municipality, Councillors and ward committee members, Thubelisha, NHBRC and NHFC.

 

Summary of concerns raised by the public:

 

  • Irregularities in the tendering process when contractors are identified and the involvement of government officials as contractors.
  • Poor workmanship on houses built, the use of poor quality material and the vanishing of contractors.  Some houses with no water and sanitation facilities or electricity.
  • Ward 25 with no RDP projects since 1994 and the problem of backyard dwellers in the area.
  • Irregularities in housing contracts, the sale of RDP houses and the abandoning of houses by beneficiaries, conversion of houses into spaza shops, the owning of more than one house.
  • Rebuilding of houses damaged by disaster in 2001/02.
  • Consideration of accessibility for the disabled when houses are built.
  • Inspection of houses after completion.

 

  Summary, in response to the concerns raised:

 

  • Houses built prior 1994 were not registered on the NHBRC.  Any defects would be investigated and rectified and all other concerns are noted.
  • Any information on fraudulent activities by government officials need to be reported to the department.
  • The National Department is currently running an investigation into the issue of backyard dwellers and the province would initiate such workshops.
  • The disabled beneficiaries get a higher subsidy than the normal subsidy to cater for their accessibility in their homes.

 

 

 

 

DAY 3:  11 OCTOBER 2006

 

The committee met with the Premier of the Northern Cape, Ms Dipuo Peters in a briefing session.

 

Interaction with the Mayor and Municipal Councillors - Dikgatlong Municipality

 

The decision to approve subsidies lied solely with the department and there was no communication with the municipality.  Currently, the relationship is improving because ward councillors are directly involved in subsidy applications.

Houses built by Grinaker Construction cannot be repaired by the municipality because these were built on wrong locations. This project would be prioritized and NHBRC would be brought on board. 

Some of the farm worker houses are bigger due to farmers making a contribution to the allocated subsidy by the department.

For all new projects, the department would make funds available and for the 502 project, NHFC would be brought on board to fast track the project.

 

Site visits:

 

  • Longlands 100 project (Phase 1) -  This is an old project built on old specifications (40 square metres).  Houses built in 2005 on a site which was previously meant for mining.  As a result of mining dynamites, these houses have see-through cracks all over.  The Environmental Impact Assessment (EIA) never detected the area for proximity to dynamites.  Builder disappeared and a local builder was appointed to complete the project.  Specifications as prescribed by the Building Inspector were not followed by the contractor in the building of the foundations of these houses.  Houses are built with full water and sanitation system.  The department, together with the Department of Minerals and Energy are involved in an investigation on this project.
  • Phase 2 of the project consist of 42 square metres houses and these were started recently.  These houses are a typical example of what the government specifies on the BNG strategy.
  • Khoisan Community and exhibition centre.
  • A tour of the Northern Cape Provincial Legislature.

 

E.      COMMITTEE CONCERNS AND RECOMMENDATIONS

 

The committee expressed dissatisfaction in the quality and size of some houses built and the number of incomplete projects.  As a result, the committee has undertaken to come back and check on progress on these challenges.

In order to ensure quality housing delivery, the committee’s oversight role need not be compromised and therefore recommended that:

 

    • The committee needs information on the progress made in the investigations undertaken by the National Department of Housing and DPLG on incomplete projects.
    • The use of municipalities as developers, the appointment of councillors as contractors and the alleged involvement of department officials in the fraudulent subsidy allocations, should be thoroughly investigated.
    • Negotiations should take place between MEC’s about the cross boarder projects.
    • Critically important is the introduction of pilot projects and the formation of partnerships to solve the existing housing problems.
    • All housing projects undertaken should be aligned to the new BNG strategy, eg, with basic installations and closer to social amenities and the department should dedicate a portion to backyard dwellers.
    • The department should strongly consider the “in situ” upgrading as a measure to expedite housing delivery.
    • The minimum standard of houses built need to be adhered to.

 

F.      CONCLUSION

 

The committee commended the province for the progress done so far, notwithstanding the fact that challenges exist with respect to projects.

 

 

 

 

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MS ZA KOTA-FREDERICKS                                           DATE

CHAIRPERSON:  PC ON HOUSING