Provincial hearings on Human Settlements budget & strategic plan 2009/10

Meeting report

The Chairperson assured the representatives from the provinces that the Committee would work closely with all stakeholders to achieve the housing objectives as Human Settlements was a critical portfolio. Only collective work would be able to overcome the complex challenges faced by this portfolio.

Limpopo presentation
The MEC, Mr Soviet Lekganyane, presented the province’s Integrated Sustainable Settlement Plan. He prefaced by commenting that as Limpopo was a very rural province, all programmes focussed on the movement of people and the economic growth of towns and certain identified economic growth nodes.

Certain Challenges from slide 7 were identified: Limitations in acquiring suitably located prime areas that promoted integrated sustainable human settlement. Government owned land was peripheral and located far from social and economic amenities.

There were other challenges such as delivery capacity constraints due to the fact that few contractors could deliver on a large scale. Bulk infrastructure was inadequate, and old sites were not serviced by municipalities.

Increased migration to economically growing towns such as Polokwane and Greater Tubatse also created challenges for planning.

Slide 9 continued this theme with the need for certain strategic interventions: forward planning was needed as responses to problems were currently piecemeal. Rural development, contracting strategies and Public-Private Partnerships were other critical interventions.

The MEC informed the Committee that Limpopo had spent 100% of last year’s budget and had already spent 31% of their current budget. The challenge was, however, that the budget did not include expenditure on bulk infrastructure.

In terms of progress in the 2008/09 financial year, the backlog in informal dwellings and the overall housing backlog had been reduced to 188 262 units. Other achievements included 6421 houses which were transferred through the Discount Benefit Scheme; the establishment of a call centre to deal with housing queries and the deployment of project managers with technical skills to all municipalities.

The MEC concluded by referring to slide 17 and the priority projects for 2009/10:

Residential Integrated Programme/Phased development approach
Rural Housing Programme
Sites and Services Programme
Farm Worker Housing 
Community Residential Housing (Hostel Redevelopment)
Community-driven Housing
Emergency Housing
Completion of incomplete projects
Planning (Housing IDP Chapters, Housing Demand Database, Land Audit)
Municipal support (Accreditation)
Transfer of properties (EEDBS)
Subsidies for Military Veterans

There were certain challenges such as a dearth of private sector finance and a deadlock on the size of houses to be provided for military veterans.

Discussion
The Chairperson thanked MEC Lekganyane, adding that one of the key questions was the credibility of the Integrated Development Plans (IDPs) which seemed to have been done merely as a perfunctory exercise.

Ms G Borman (ANC) congratulated the MEC on delivering to budget. She asked for clarity on the allocation of houses, as if there were not specific allocation criteria this could permit corruption. She also asked whether job-creation strategies had been identified and quantified, with reference to the President’s target of 500 000 new jobs created by December 2009. She endorsed the MEC’s comments that it was wise to plan before undertaking projects but asked for clarity as to what an ‘upgrade’ on existing housing actually meant.

Mr A Steyn (DA) expressed dismay that local councillors were able to influence planning strategies. He asked whether simply following the movements of people instead of forming new economic hubs where development was needed was justified. He was concerned that the strategic challenges which had been identified were not new and required clarity on the upgrading of informal dwellings, since the numbers given did not match those submitted by the province. He also queried the figure given of 40 new project managers, wondering whether they were qualified and competent.

The Chairperson asked if the social and housing rental programme was running and whether the National Home Builders Registration Council (NHBRC) was involved in the various programmes.

Mr Lekganyane agreed that many of the issues were not new, especially the problem of funding bulk infrastructure because the housing grant could not fund reservoirs, sewerage treatment plants and the like. Instead, these should be funded by the MIG but since this matter had never been resolved, a conflict remained which delayed housing delivery.

The allocation of houses was sometimes problematic because local concerns did clash with IDP plans on occasion. In terms of upgrading, this involved relocating and rebuilding. The MEC agreed that rural revitalisation was necessary as rural areas did have growth potential but the Department had to be proactive in terms of anticipating migration. The project managers were garnered from technicons and universities who were then absorbed as interns and utilised for three years. He assured Ms Borman that the NHBRC team was closely involved with the project managers and inspectors of Limpopo province, indeed inspections were performed in concert.

The Chairperson asked whether there were problems with backyard dwellers and if people with disabilities and child-headed households had been taken into account.

Mr A Steyn expressed confusion as to why the Department of Human Settlement and Local Government could not plan together and he wanted to know if there were any units not registered with the NHBRC.

Ms Borman (ANC) suggested that the Committee could assist in motivating funds for bulk infrastructure and she asked whether unskilled workers were being up-skilled to become bricklayers or plasterers, plumbers and the like.

The MEC responded generally to the queries. He stated that the problem with bulk infrastructure was illustrated by Makado where there was a need to build a pipeline to the Nandoni Dam, a treatment plant and a reservoir which fell within the ambit of the Department of Water Affairs. There was a challenge in terms of houses enrolled under the NHBRC which only began from 2003. The discrepancies in statistics were not problematic if the deviation was low which the MEC believed was the case. Discrepancies arose because the Department was given statistics which would be subsequently updated by the end of the first quarter. Up-skilling was taking place and the Sakhasonke Contractor Development programme had been involved in this regard. The next step was to secure accreditation for this training.

Gauteng presentation
Mr Anthony Green (CFO Dept of Human Settlement, Gauteng) and Ms Benedicta Monama (HOD) presented. Ms Monama prefaced the presentation by commenting that the creation of decent work and sustainable livelihoods were the overriding imperatives of her department. These objectives would be accomplished through alleviating poverty and accelerating housing development. Job-creation was always brought about by housing programmes and Ms Monama was proud of a fully fledged construction company which was staffed by former Expanded Public Works Programme (EPWP) candidates.

She referred to her Department’s short term priorities in the first slides. They included a summary of planned projects for 2008/09, mixed housing development, the eradication of informal settlements, houses for military veterans, urban renewal, alternative tenure and the 20 PTP (20 Priority Township Programme).

The challenges facing Gauteng were:
An annual increase in the housing backlog; the fact that grants for housing were not resident in the Department of Human Settlement; migration and urbanisation; land invasions; the high cost of private land; the increased cost of higher density developments and the need to replace hostels.

The targets for the current financial year had been revised because of changing economic conditions, the increased cost of materials and revised subsidies. They included:
The formalisation of informal settlements; an alternative tenure programme which allowed for self-building and rental by tenants; urban renewal and the 20 PTP which aimed at improving townships and bringing in economic development; the upgrading of Bekkersdal, Evaton and Alexandra through building roads, storm water drains, clinics, new houses and the tarring of roads in all older townships.

The achievements of 2008/9 were outlined, most notable of which was that the revised targets had been exceeded because the Department had attracted funding not used by other provinces. This meant that 80 469 units had been delivered against the 61 496 target. Thus, in most aspects of housing expenditure, spending amounted to 100%.

One of the major challenges for 2009/10 was that the Department would need 15% more than the R2 443 271 924 which had been allocated. Certain essential items were not covered by this figure and they were:
NHBRC enrolment fees; operations capital; funds for outreach initiatives; the provincial Urban Renewal Plan; the Gauteng Partnership Fund (which enabled contractors to raise further funding for projects); housing asset management; professional fees; Servcon funding and emergency intervention.

In terms of the current budget (2009/10) 28% had been spent so far and the Department intended to finalise existing projects.

In explanation of the fact that 99% of the total budget had been spent, Ms Monama told the Committee that the provincial Treasury had taken over the expenditure which led to some payments being delayed.

Discussion
Mr Steyn (DA) wryly observed that despite a lot of information, little had actually been said. He was confused by the discrepancy in the figures given by the provincial department and the national department and also by the fact that targets could change so frequently. This seemed to indicate a lack of planning. He requested more information on certain contractors which had not been paid and on the Gauteng Partnership Fund, which if it could really leverage R1 billion in funding with R250 000 seemed like a sound idea.

Ms Borman (ANC) also commented that the presentation was not particularly helpful. If the previous years were compared to each other on the same slide this would be more informative. She queried what the R54 million for the NHBRC meant in terms of actual numbers of enrolments and asked for a clearer understanding of the additional costs which were incurred by ‘high-rise’ buildings.

Ms Monama replied that the deliverables did not match the revised targets because the subsidies had been reduced. Contractors often worked according to the original target and the shortfall was then covered by additional allocations. Thus, existing budgets had been exhausted and the Department had to wait for clearance before all the contractors were paid. This also explained why some contractors remained unpaid, though the outstanding payments only related to April and May of 2009. 

Mr Steyn remained unconvinced by the explanation of the discrepancy in the housing numbers and required more detail on the costs incurred by high-rise housing.

Ms Monama replied that there were proven technical reasons because the buildings would be subjected to greater stress and if the Committee so desired, such information as well as a breakdown of the R54 million for NHBRC enrolment could be provided.

Mpumalanga presentation
MEC Madala Masuko began his presentation by stating that the challenge that Mpumalanga had set for itself was the clearing of all backlogs.

The acting HOD, Mr Dhlamini referred to the Summary of expenditure for the 2008/2009 financial year, stating that 99% of the budget had been spent. He was pleased to report that Mpumalanga had exceeded its target of 14 821 houses by building 15 181 houses. The Integrated Housing and Human Settlement Grant had also been spent. In terms of the Housing Demand database, Ehlanzeni had been completed while Bushbuckridge was currently 80% complete. The Gert Sibande and Nkangala District Municipalities were currently at 80% as well and the expected date of completion was the end of June 2009.

The notable items in the budget allocation for 2009/10 were the large increase in compensation of employees as well as the 26% increase in the Conditional Grant which represented 82% of the total allocation.

A number of slides followed relating to the MTEF priorities. They were briefly:
The completion of incomplete units  and upgrading of informal settlements; rectification of pre 1994 RDP houses (replacement of asbestos roofs) as well as 1994 – 2002 RDP houses; the provision of housing and housing subsidies for veterans; the conversion of hostels to community residential units; the backlog in housing for rural dwellers and farm workers; social and economic facilities (13 were needed, 6 had been completed); the fight against crime and corruption where contractors or officials had committed fraud; the provision of decent work; the filling of critical posts and the building of 9 164 housing units.

He then referred briefly to the 100 Days Plan, the priorities of which were funded by the Equitable Share and the funding allocated for administrative support. 

Discussion
Mr Steyn queried the large increase in the compensation of employees. He expressed concern that the department did not have an actual database detailing demand for houses as he was aware of houses standing empty in some areas which were in excess of the actual demand. He asked from where the funding for community halls and day-care centres was coming.

Ms Borman expressed appreciation that the MEC was present. She required clarity on the total number of houses to be repaired in the rectification process, whether the Department was also having problems with the size of veterans’ houses and if fraudulent contractors would be barred from future contracts. She thanked the MEC and acting HOD for the detail in their presentation.

The Chairperson wished to know if there were any blocked projects and what had become of the land purchased last year for about R90 million.

The MEC responded that the amount allocated for employee remuneration had increased because of a lack of capacity, especially technical capacity. A total review of the organogram had been undertaken and the changes had been benchmarked with other provinces and been approved by the Department of Public Service and Administration, with an allocation of R35 million for the purpose this year. The backlog figures for housing delivery would be obtained from the demand database in future but the Department was currently relying on Statistics SA figures which were somewhat outdated, the Department’s own survey indicated the numbers were higher.

The building of community halls had been funded by the Conditional Grant. Concerns were raised in terms of the size of veterans’ houses but the Department was unable to move out of current parameters (45 square metres) unless a new policy was promulgated. Mr Dhlamini assured the Committee that fraudulent contractors would not be given future work and had been blacklisted.

There were currently no blocked projects and various task teams had been set up to address problems in acquiring land in areas of high economic growth such as Mbombela, Govan Mbeki, Steve Tshwete to name the most prominent. In Bushbuckridge a task team had been set up and both Mpumalanga and Limpopo would play their part in the completion of projects due by December 2009.

The MEC assured Mr Steyn (DA) that the increase in the staff complement was due to the fact that no housing unit had actually existed in the past and there was no technical or professional expertise at all. All the existing staff were administrative personnel.

The Chairperson adjourned the meeting, reminding the members that the next meeting of the Committee would take place on 23 June