N2 Gateway Project: Minister of Human Settlements & Western Cape Premier's briefing


06 Aug 2009

Presenters: Minister of Human Settlements Mr Tokyo Sexwale, and Western Cape Premier Ms Helen Zille

The Minister of Human Settlements, Mr Tokyo Sexwale, and Western Cape Premier, Ms Helen Zille, issued a joint statement on their discussions pertaining to the issue of the N2 Gateway Housing Project. Mr Sexwale explained that the joint briefing illustrated the spirit of co-operation between the national and provincial spheres of government, as required by the Constitution, and was a way of avoiding intractable and protracted legal proceedings on the issue of the N2 Gateway Housing Project. Every reasonable effort would be made to resolve the land dispute between the national and provincial government by mutual co-operation without the need for litigation, as litigation would delay service delivery to communities who urgently required housing. He indicated that the Premier of the Western Cape had pointed out that there were legal problems with the N2 Gateway Housing Project, in that there were elements of unlawfulness about agreements on the project, and the measures taken to transfer land from the provincial to national government organs. She had made definite proposals to the Minister about how these problems could be resolved. He had then responded that because this was a national Housing project, it was a unique situation, and he would act speedily, review the agreements in respect of the alleged irregularity, including possible violation of the Constitution, obtain a legal opinion and consult with Cabinet on Tuesday. He wanted to avoid an intractable legal situation that would not benefit anyone, especially the homeless persons whose livelihood depended on a speedy resolution to this matter. The N2 Gateway Housing Project would cost in excess of R1.5 billion, and any further delays would jeopardise the roll out of these funds, which had to be used by a certain date otherwise they would revert back to National Treasury. 

Ms Zille commented that she was enormously encouraged when inter-governmental relations worked well as envisaged by the Constitution. She commended the Minister for his accessibility, the fact that he had listened carefully to her, and his efficient office arrangements that contributed to successful inter-governmental relations. She agreed that the service delivery must move as fast as possible, and all were committed to pushing it in the right direction, to setting matters in place and implement them. However, the obstructions must be removed in order to make delivery happen to the people who needed it the most. Without those obstacles being removed, the matter could not proceed, no matter how much effort was put into the matter. Therefore, all legal requirements and co-operative governance processes must be put in place, to allow that momentum be gathered and delivery occur. The legal and constitutional framework was in place to protect people’s interests. She and the Minister had completely agreed on this legal framework, and they now had to get the legal team together to decide exactly where the obstacles lay, what form they took, and how to remove them.


Q: A journalist asked for an explanation of the illegality that was referred to in the statements.

A: Ms Zille responded that on the day before the elections there had been a transfer of land from the Province to the national government. This had not followed the proper process in terms of an existing Memorandum of Understanding, and it was her belief that this made the transfer unlawful and equally unnecessary.

Q: A journalist asked the Premier whether she meant, by referring to “rectification” of the problem, that the land would be returned to the Province.

A: Ms Zille responded that she meant that the issue would be addressed in terms of being legalised and regularised. It was contended that the current agreement for the transfer of the land  was unlawful, and there was a desire to have that rectified, so that there were correct agreements in place to roll out this project successfully.

Q: A journalist asked what should have been done to make the transfer legal.

A: Ms Zille responded that there was a Memorandum of Understanding in existence to the effect that the Provincial government would co-operate with National Government and with the City of Cape Town to facilitate the project. They wanted it to work, noting also that the Constitution provided for three spheres of government and required them to work together on projects like this. If the Memorandum of Understanding was followed correctly, the legal basis for this would be in place, and there were no extraneous initiatives required to make it work.

A: Mr Sexwale also responded that both he and the Premier were new in their offices, although the Premier was acquainted with this issue in her former capacity as the Mayor of Cape Town. Although the Premier indicated that she thought there was illegality in the action that had been taken, the Minister still had to apply his mind to this, and understand what the content and nature of the Memorandum of Understanding stated. A cursory reading of that Memorandum, and a brief contact with one or two players who had been involved, indicated to the Minister that it seemed as if the parties had acted legally, or at least believed that they had acted legally. It was also true that because the agreements had been signed a week or so before the election, this created the impression that it was done for political reasons. However, other people said that there had been a discussion around the Memorandum for nearly 18 months before it had been signed. He still had to find out what the legal significance of this matter was, in light of what had been pointed out by the Premier.

Q: A journalist asked who had signed the contract for the transfer of land from the provincial to the national government.

A: Mr Sexwale responded that he and Ms Zille would not want to use this press conference in order to start pointing fingers. This was not to say that they were glossing over the matter or sweeping things under the carpet.

A: Ms Zille added that it was the City of Cape Town's prerogative to decide how to follow-up on the forensic audit that was requested, and that question would be best answered by the Mayor of the City. This question went to the heart of why it was important to get the legalities right. This was the reason why she was holding discussions with the Minister, to ensure that all the legal requirements would be in place in the next phase of the project. When she had raised the issue the last time she had been removed from the project. However she had been given a totally different reception by the Minister on this occasion, and there was now a joint commitment to get things right.

A: Mr Sexwale also added that he intended to discuss the issue with the Mayor as well, in the context of finding a common solution.

Q: A journalist asked the Minister and the Premier whether they would settle out of court as an indication of their commitment to avoiding delays in service delivery. The journalist also asked how concerned they were that a prolonged legal battle could worsen service delivery protests.

A: Mr Sexwale responded that both he and Ms Zille wanted to avoid that happening as far as they could. They wanted to take people's interests to heart and they wanted to avoid a protracted situation. The matter was part of inter-governmental relations, and it was preferable that it should not end up in a legal wrangle. In addition, because this involved national government funds, a protracted delay might result in the blocking of the funds, which would have to be sent back. The Minister did not foresee that the parties would not be able to agree on this issue, and their commitment was very clear. It was about ensuring that the houses to be handed over remained strong and standing, not falling. He and the Premier did not want to play party political games or political football with this issue, as it was about the people. The Premier was there to serve the interests of the province, and it was not in anybody's interests if she could not discharge her responsibilities. Both genuinely believed in finding sustainable solutions that would be in the interests of the people.

A: Ms Zille repeated that the last time that she had raised her objections, she had been removed from the project. This time, however there was a commitment to ensuring that the entities could all deliver, and she and the Minister were in full agreement that this matter needed to be resolved quickly. She had been welcomed with an open door. A team of lawyers was looking at the issue and was committed to resolving them. That was exactly how inter-governmental relations were supposed to work in terms of the Constitution. Just as the Minister had said that he was committed to ensure that they could deliver, so she too was equally committed to ensuring that she could deliver. Both were committed to ensuring that every cent of the R1.5 billion was poured into providing service delivery and human settlements to the people who needed it the most in the province. They also knew that if they did not get the legal framework right, they would start very enthusiastically but would hit a brick wall very soon. Mr Sexwale and she had agreed not to drag this issue through interminable dispute resolution processes. They wanted to get this resolved quickly. Their purpose was not to put stumbling blocks in each other’s path, but to find out what was lawful and then proceed on that basis.

Q: A journalist asked whether the R1.5 billion spoken about by the Minister was budgeted for the current financial year.

A: Mr Sexwale responded that R400 million had been rolled out for the project for the current financial year. The R1.5 billion was the total amount that had to be rolled out for the project.

Q: A journalist noted that the N2 Gateway Housing Project was supposed to have been government's flagship housing initiative, and was about how to tackle housing problems in a different manner. However, problems had arisen with people complaining about government not communicating, and now there were the issues of illegality. The journalist asked if the current discussions would be changing the way that the Department of Human Settlements did its business in future, in terms of the relationships with provinces and similar issues.

A: Mr Sexwale responded that there was a commitment and he was prepared to listen to the provincial leaders. The new Department of Human Settlements wanted to do things differently,  so that it would not just provide housing but an environment where people could play, pray, live in closer proximity to their workplaces, be provided with facilities, and have a generally more holistic approach. The positive aspect that he had seen about this project was that, despite all the problems, there was still housing being delivered. He drew an analogy with a situation where people might protest about lack of transport, and the providers would deliver bicycles and think that the matter was closed. However, the providers then started to face other problems when the people then began to demand pumps, wheel spokes, and lessons on riding a bike. These new problems were still preferable to the old situation where people had nothing. However, it must be remembered also the quality must be right, and delivery must be seen to happen. He had been reminding small business contractors that even though they were favoured, they still had to do the right job, otherwise their contracts would be awarded to other people. The Ministry and Department of Human Settlements was committed to ensuring that things were done the right way.

Q: A journalist asked the Minister whether, despite all these problems, government would still replicate this project in other parts of the country.

A: Mr Sexwale responded that this essentially had been a pilot project. There was still a need to study it and see the shortcomings so that, wherever it would go from there, there would be a better idea of how it would work. There were areas requiring huge improvements - for example with regard to empowering people on how to maintain the property, so that they could understand that government could not just give assets or that they could just claim rights, without also taking on responsibilities. There was also a need to check on some of the contractors because some of the houses had structural defects as result of poor workmanship, and had damp walls. It was a national pilot project and he did not want to start another pilot project.

Q: A journalist asked the Premier, in the event that this piece of land was not transferred, how this would that affect the ability to deliver housing for the poor.

A: Ms Zille answered that not all of the land was for the N2 Gateway Housing Project. The other land was for a variety of purposes, including land restitution, which was a very important process with which they were currently involved. There was therefore a variety of land pockets, all of which could be productively used to provide housing for the poor. It was her belief that it would be possible to make a huge success of the second phase if the legalities were put right, and bearing in mind the lessons that had been learnt from the mistakes that had occurred in the initial phase of the project.

Q: A journalist remarked that the problems encountered with the N2 Gateway project would at the end of the day cost the taxpayer money, if someone was paid to do something and then another person had to be paid to fix that problem. The question was what was planned to stop these kinds of problems.

A: Mr Sexwale responded that this was a problem that he had raised with the Director General of the Department. Consideration had been given to whether the Department could take legal action, in certain instances, against some of the contractors. However it had been found that some of them were small contractors and at the end of the day the Department was likely to spend more instituting the legal action and pursuing it than it would cost to rectify the problems in some other way. This would have ensured that people would not be able to get away with delivering less than they had been contracted to do and burdening the taxpayer with unnecessary costs. Another problem was that the regulator was not doing its work properly in terms of site inspections and security to avoid theft and abuse of building materials. He had noticed that houses were cracking easily because a lot of cement simply disappeared. There had to be someone who was checking each project to make sure that matters were being done correctly. There were some contractors who would try to get away with criminal behaviour, because they wanted to roll out government funds in a certain way in their contracts. He wished to put a stop to such behavior. The regulator had to be on the ground to ensure that people were held accountable to what they had contracted to do. However, it was not possible to solve all these problems with the wave of a magic wand, and despite the steps that would be taken, there were still likely to be some problems. The parties involved wanted to make sure that the problems were minimised.

The briefing was adjourned.


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