Eastern Cape Department of Human Settlements Intervention Close-Out Report; Harry Gwala Informal Settlements; Report on North West Housing Corporation; and Joe Slovo Constitutional Court Progress Report: Department of Human Settlements: Briefing on progre

Meeting report

Introduction
The Chairperson opened the meeting and welcomed the Hon. Ms Zoe Kota-Fredericks, Deputy Minister of Human Settlements, Mr Thabane Zulu, Director-General, Department of Human Settlements (DOHS), Mr Martin Maphisa, Deputy Director General, DOHS, Mr Leshabe Rampedi, from the National Intervention Team, DOHS, Advocate Jan Tladi, DOHS, Mr N Chainee, General Manager, Intergovernmental Relations and Stakeholder Management, DOHS, Ms F Matlatsi, DOHS, and Ms Julie Bayat, Chief Director: Priority Projects, DOHS; and also Mr Taffy Adler, Chief Executive Officer (CEO) of the Housing Development Agency (HDA), and Mr Xolani Tshaka, Project Manager of the Joe Slovo Project. The meeting was important in terms of the Committee's oversight role and the agenda dealt with critical issues which had engaged the Committee in recent months. She tabled the agenda and called for any additions.

Ms T Gasebonwe (ANC) asked that Makhaza and the recent removal of the controversial toilets by the City of Cape Town be added to the agenda. The Chairperson agreed, but asked the Department to give a synopsis, noting that sanitation fell under the Committee's mandate.

Mr Zulu requested a postponement of the presentations on the Scottsdene Self Help Scheme and the Housing Development Agency (HDA). The Scottsdene report needed further research and the Department had not been able to engage with the HDA on funding models and proposals and thus had no concrete proposals to present to the Committee as yet.

Ms G Borman (ANC) agreed to the request to defer the reports if the Department was not ready but asked why postponements were requested at such a late stage

Mr R Mdakane (ANC) proposed that Mr Zulu’s request be accepted.

The Chairperson accepted Mr Zulu’s request, and noted that a fully informed report was preferable to an incomplete one.

Mr Zulu apologised to members and committed his Department to submitting reports seven days in advance of a meeting and to establishing a system for effective engagement with the Committee in the future.

Presentation on Eastern Cape Department of Human Settlements Intervention Close-Out Report
Mr Rampedi said that the Department’s presentation was to inform the Committee on the status quo and respond to the issues raised and recommendations made by the Committee on its oversight visit to the Eastern Cape from 04 to 10 October 2009.

The Committee had noted, among other things, that people in most houses were living under life threatening conditions. Dividing walls were full of cracks, wobbling, and not firmly grounded. This was very frightening and people feared that their houses might fall down at any minute. There were also no showers in the houses. Moreover, the architecture of the houses did not take into account the privacy and the dignity of the people.

Mr Rampedi said that, in particular, the purpose was to present a report on the progress made in the Intervention in the Eastern Cape Department of Human Settlements programme in terms of Section 100(1) (a) of the Constitution of the Republic of South Africa (1996).

The Eastern Cape had experienced declining performance in housing delivery and expenditure since the 2004/05 financial year. Over a three-year period the Eastern Cape had lost over R1 billion due to non-expenditure.

On 16 April 2008 Cabinet approved the Intervention in terms of Section 100(1) (a) of the Constitution (1996) as well as the Housing Act. The Intervention was scheduled to last for the 2008/09 financial year. On 29 April 2009, having considered a report from the Minister, Cabinet resolved to extend the period of the Intervention to 31 March 2010. In compliance with Cabinet’s decision to extend the Intervention, the national Department of Human Settlements deployed personnel and other resources to fulfil this mandate. In addition, the Minister of Human Settlements issued Directives to the relevant Member of the Executive Committee (MEC) as prescribed by Section 100 (1) (a) of the Constitution of the Republic of South Africa.

In order to give optimal effect to Cabinet’s decision, a joint team comprised of both national and provincial officials was established. The team was supplemented by professionals from the private sector spanning different professional fields such as: engineering; project management; town planning; land surveying; financial analysis and geographic information systems. These experts were physically deployed to the six districts.
 
A number of areas had been identified as weaknesses, including project management, the model of service delivery, problems with long term planning, and the recognition of areas where financial management had to be improved.

The turnaround strategy had yielded positive results. In the 2007/08 financial year the Eastern Cape spent R375 million, in 2008/9 financial year (the year of the intervention), R900 million was spent, and in the 2009/10 financial year R1.3 billion was spent as a result of the intervention. As illustrated in a month by month expenditure graph for the 2009/10 financial year, expenditure occurred throughout the year as projects had been properly implemented.

Progress to date in terms of housing units and services delivered showed that as at March 2010, the provincial statistics for houses completed indicated 17 306 completed units and 11 327 stands serviced. MEC targets for the year were 19 000 units and 7 790 services. While the final audited figures were yet to be released, interim financial reports indicated that the entire budget, of R1.313 billion, had been spent for the first time in many years.

Various measures had been taken to ensure that the issues raised by the Committee were being attended to and were in accordance with the Breaking New Ground (BNG) policy framework. A project Readiness Matrix was developed and adopted by the Eastern Cape Department of Human Settlements. This Matrix outlined essentials which had to be addressed before projects were implemented. These include an Environmental Impact Assessment (EIA), the identification of beneficiaries, and the availability of services such as water, sanitation and electricity. A credible five year Multi-Year Housing Development Plan (MYHDP) had been submitted to the national Department of Human Settlements. This user friendly application would enable officials to analyse projects in terms of readiness and implementation using various criteria and key indicators.

Urgent priorities were the rectification programme and the unblocking of blocked projects which were a result of poor workmanship by contractors, use of inferior construction material, lack of adequate planning and technical input, lack of supervision, construction and project management. The rectification programme was aimed at addressing these problems and the provincial Department had engaged the services of the National Home Builders Registration Council (NHBRC), Stimele Bosch Africa (SBA) and Lilitha Project Manager to undertake the project management process.

Challenges facing the rectification process were to quantify the amount of rectification work required, the assessment of all blocked projects and those not enrolled with the NHBRC and budgetary constraints. The budget required for rectification was R1.5 billion and currently only 10% of the conditional grant (on average R130 million per financial year) went to the rectification programme. Projected estimates indicated that it would take ten years to complete work on already assessed houses. With inflation and escalating costs, projects still to be assessed would not be rectified in the next ten years given the current budgetary allocations. 

In conclusion Mr Rampedi cautioned that compliance with the mechanisms instituted should be closely monitored. Therefore project managers would be located in each region and be required to give monthly reports to ensure accountability and to ensure that delivery was sustained beyond the intervention process, which had now ended. Impetus should be given to development in the rural areas and to vulnerable groups.

All projects must comply with the BNG policy, and basic services such as water and sanitation must be in place as stipulated. Recognition had to be given to the fact that schools and clinics and other infrastructure were necessary for integrated community development and that other partners had to be brought on board.

Beneficiary management was a difficult undertaking, but the Eastern Cape had established a unit to attend to this and communities should be part of the planning and implementation phase of developments. Mr Rampedi reiterated that provinces would have to take responsibility for implementing and driving projects and not just transfer funds to municipalities for this purpose. Only municipalities which had the capacity should be entrusted with this function.

Environmental legislation and regulations which obstructed projects and timely delivery were currently being reviewed by the relevant departments. Regular meetings ensured a good working relationship which facilitated interdepartmental cooperation. Corruption and alleged corruption in the sector were also being dealt with and a unit was examining material supply in the industry.

Mr Zulu commented that the tool analysis developed during the Eastern Cape Intervention would prove relevant to other provinces challenged with similar problems and the Department would be adopting it to deal with that eventuality.

Discussion
The Chairperson thanked Mr Zulu and Mr Rampedi.

Ms D Dlakude (ANC) wanted more clarity on rural housing and on the areas of weakness identified by Mr Rampedi. She asked what measures were in place to overcome these problems which, she noted, had been there for a long time, and asked who was responsible for ensuring that a project was not abandoned.

A Member was concerned at the multiple challenges facing the Eastern Cape and the lack of capacity at municipal level. He asked what happened in municipalities where there was no capacity and was there deployment of staff from the provinces to implement the control measures identified by the report.

Mr A Figlan (DA) hoped that there was good communication between the Eastern Cape and the municipalities because it was clear from the Committee's visit that there was no communication. He hoped that the problem of the Eastern Cape’s dumping money on the municipalities at the last minute was over. Furthermore he asked how many houses had been completed in the rectification process, where this rectification taken place, and if the issue of the beneficiary list had been resolved.

Ms M Njobe (COPE) expressed her concern about the poor quality of the houses, the high number of abandoned and incomplete projects, and low capacity in the rural areas. She asked what the Department’s plans were when the necessary conditions and capacity for project development were not present. The principle was correct but people deserving housing should not be disadvantaged. She commented further that people did not appreciate housing of a poor quality and this lack of pride resulted in neglect, as they were disappointed by the poor quality and the kind of settlements established. She said that, despite Government's good intentions, RDP housing was conspicuous in the rural areas for poor quality and neglect. People had got contracts but were obviously not qualified to do the job. She asked how they had been given those projects. Contradictions in the system had the result that people in the area expected to be the beneficiaries even though they lacked the capacity and the skills to the detriment of acceptable quality. A solution had to be found whereby previously disadvantaged persons could participate while involving those who had the capacity and could pass on their skills.

Ms V Bam-Mugwanya (ANC) commented that previously the Committee had requested interpretation on the acronyms in presentations. She was concerned with the lack of capacity of municipalities. She queried whether consultation with the rural community had taken place and if there had been any consideration of the technologies implemented as the RDP houses had not improved rural communities but had detracted from the rural landscape. She asked why traditional technologies for housing construction had not been pursued. In terms of the redetermination of contracts and the Minister’s commitment to pursuing corrupt operators, she asked what gains had been made in bringing culprits to book and nabbing offenders. Many of the corrupt operators were belligerent and did not want to return and reconstruct.

Mr Zulu responded on the lack of capacity and the various dimensions encountered in the intervention process. Clearly there was a lack of technical capacity. However, accountability was often a bigger problem than capacity. What mattered was the value that one was able to draw from whatever capacity was present. The Eastern Cape had decided to open regional offices. Officials would be held accountable for on-the-ground performance and would not merely complete generic reports. The issue of physical dumping was being dealt with. Payment was made on the basis of physical delivery and no longer transferred into trust accounts. Before the intervention, most spending was done at the end of the financial year but it was now charted month by month according to plan. The management of the beneficiary list was a challenge nationally and probably more acute in the Eastern Cape. A chief directorate on beneficiary management was being established. The Department was also launching a national demand database. This would indicate progress on the waiting list.

Mr Rampedi added that all projects in the Eastern Cape were accounted for. The Department had produced specific interventions where necessary. In the medium term the prospects were positive. In terms of capacity, competencies of people should be developed.  

Mr Maphisa responded on issues on rural development. In terms of rural housing, there was a policy and discussions on both on farm and off farm interventions were in progress. There was also consultation about tenure. There was an engagement with communities in traditional areas. These communities had indicated that housing designs should suit the environment; rondavels were a favoured design. There were discussions with commercial farmers on off-farm and on-farm housing. The investment of Government in private land and tenure rights was negotiated with consideration to the balance of interests. It was necessary to be more flexible in rural areas as land was cheaper and more readily available and larger units were possible. However, service provision was more difficult and the subsidy should be used to augment the provision of services, such as roads.  Policies had been established, and agreements were being finalised to facilitate delivery, including affordable rental accommodation.

The Deputy Minister noted Members’ concerns about the provincial and municipal responsibility for housing delivery. Where there was low capacity in providing housing, a hands-on approach had to be adopted.  Municipalities played an integral role by providing grants and passing plans but municipalities had to stop diverting funds from housing delivery. This was necessary to ensure value for money from transferred funds. Shoddy work by some emerging contractors would not be tolerated. There was a national incubator process to capacitate emerging contractors and the upcoming Emerging Contractors Conference would assist in developing competencies. With corrective measures in place to ensure the delivery of quality housing there was a call for previous contractors to return to Government. She concluded by calling for Members to desist from talking about RDP houses as these houses were 'Breaking New Ground' houses in accordance to the policy change to ' Breaking New Ground '(BNG).

Ms Borman stated that the presentation had captured the concerns of the Committee. These concerns had been on the agenda for some time. Referring to the figures given in the presentation, she noted that the figures in the Service Delivery Graph did not add up and this was apparent when seen in conjunction with the Project Readiness Graph. A further concern was that while the Breaking New Ground Policy had been in inception since 2004, plans were still being put on the table and there were no projects in place for the Committee to start monitoring. She supported the project readiness and project management strategies established by the Department and saw their value as a pilot project for the rest of the country. However, delivery had to be speeded up on the ground.

Mr R Bhoola (MF) noted that the Minister had instituted a national investigation on corruption and asked if the Department had found any irregularities. If so had any perpetrators been convicted or charged? Referring to the HDA, he observed that there was a lot of overlapping with the Department's mandate and he asked what role the HDA played in assisting poor municipalities. He was perturbed by the prevalence of non-compliance with regulations that emerged in reports, such as poor quality, projects abandoned, and not completed, despite the BNG policy. He also asked about the responsibility of the municipality, regional offices and the presence of project managers. Were these structures not doing their job?

Mr A Steyn (DA) concurred with Mr Bhoola’s sentiments and those of other Members. He found problematic the continual citing of lack of capacity as a factor in non-delivery. Thus the ‘Areas of Weakness' indicated in the presentation were a reflection on the lack of responsibility and accountability of officials. Lack of compliance with acceptable practises meant that people were simply not doing their jobs. People were employed without the necessary competencies or were simply incapable of performing their jobs. An intervention should be considered not only in the Eastern Cape but nationally. He was seriously concerned that the statistics in the presentation were not accurate as demonstrated in the inconsistencies in the figures given in Housing Delivery Trends Graph and milestones recorded as at March 2010. He expressed his dissatisfaction with generic statements such as ' Bulk of Service providers paid on time' and the non-adherence to ministerial directives, which, he remarked, were a problem throughout the country. He requested that a deadline be set for the Policy documents to be adopted by Treasury and not listed as 'In progress' as stated in the Report. Monthly reports were important but there had to be a process after the reports were completed. Finally, he was not convinced that the establishment of a Chief Directorate for Beneficiary Management was a solution to the complex problems of beneficiaries. The core issues were still not being dealt with, Councillors and Developers were still allocating houses against policy directives and implementing the Chief Directorate would be a lengthy process. 

Ms A Mashishi (ANC) asked for elaboration on public participation in the Beneficiary Management process.

The Chairperson mentioned that discussion was subject to time constraints and that there would be further opportunities to engage with the Department.

Mr Zulu responded on the critical issue of quality assurance in the houses that had been built. He acknowledged the challenges and said that NHBRC was adopting a new approach and decentralising responsibility to the provinces and regions where projects were taking place to ensure proper monitoring and evaluation To ensure that interventions were not made at the end of the project, monitoring and evaluation would take place be on a quarterly basis. There was a commitment by the Department to the proper management of projects. The MEC and her team were also undertaking physical visits to projects.

The Chairperson stated that the Committee needed more information on the rectification process and on the number of units that had been rectified.

Mr Rampedi replied that a system had been established to ascertain where money had been allocated and at which stage of the project, such as planning, foundations and top structure. The Eastern Cape should take the leading role and be proactive, if the municipality did not have the capacity to put in bulk infrastructure. If the rate of delivery was not good enough, the Eastern Cape should intervene, support and initiate, because otherwise delivery might never take place. There should be no houses which required rectification. He proposed giving the number of units to be rectified and the cost implication at the next meeting. He stressed that the community must be at the centre of the project and run the process and not be passive beneficiaries on its completion. Community involvement at every stage would benefit quality management and prevent the signing off of shoddy work, as has happened in the past. Finally, where problems existed with the lack of capacity, it depended on how resources were allocated. More resources could be made available for human capacity.

The Chairperson commented that the Department faced serious challenges when municipalities were not ready to respond to the communities’ need for housing. People were expecting delivery from Government. She requested that the Department examine the Committee’s recommendations as given in its report on its oversight visit to the Eastern Cape and respond to the specific issues raised. The Department could respond in writing and meet with the Committee at a later stage.

Mr Mdakane proposed that Members who were from the Eastern Cape should make an oversight visit on some of the projects. He commented on the 'no development without infrastructure' clause and noted that many rural areas lacked this infrastructure. He was concerned that the Department could not supply the figures for the number of units to be rectified and the cost implications thereof. The Committee could not perform its oversight function unless it was given accurate information. Reflecting on the report, he observed that what was on paper often was not what was happening in reality. This was what the Committee had discovered on its oversight visit. He encouraged the alignment of projects between the Department of Human Settlements and the Department of Rural Development and Land Reform. 

Mr Zulu said the Department would present a report on investigations to the Committee in the future.

Report on the outcome of the Harry Gwala Informal Settlements Constitutional Case
The Chairperson noted that Members had been concerned about the Minister's visit, of which they had received no feedback.

Adv Tladi reported that the Minister had visited Diepsloot and not Harry Gwala. Adv. Tladi stated that the Department had last reported on the subject to the Committee on 04 November 2009, at which stage the Constitutional Court judgement had still been pending. The judgement was delivered on 19 November 2009 by which the appeal by the residents of Harry Gwala Informal Settlement was dismissed. The applicants were Johnson Matotoba Nokotyana and all the residents of Harry Gwala Informal Settlement, a class of persons contemplated in section 38 of the Constitution. They had originally brought an application before the Witwatersrand Local Division against the Ekurhuleni Metropolitan Municipality in 2003, seeking to obtain an interim order that, pending the decision on whether Harry Gwala Informal Settlement should be upgraded in situ, the municipality should be ordered to comply with its constitutional and statutory obligations in terms of the Constitution and the Housing Code read with the Housing Act.

The relief sought was for the following basic services: communal water taps, temporary sanitation services, refuse removal facilitation and high mast lighting in key areas to enhance community safety and access by emergency vehicles.

The Witwatersrand Local Division had granted the applicants the relief sought in respect of refuse removal sanitation and communal water taps but had dismissed the application for temporary sanitation facilities and high mast lighting. Subsequently the matter came before the Constitutional Court by way of an application for leave to appeal against that decision.

The Constitutional Court preliminarily issued an order joining the MEC for Local Government and Housing, Gauteng; the national Minister of Human Settlements; and the Director-General of the national Department of Human Settlements as the second, third and fourth respondents respectively.

The judgement of the Constitutional Court was that the appeal was dismissed on the basis that Chapters 12 and 13 of the National Housing Code were not applicable in the situation of the Residents as these chapters specifically deal with emergency situations and upgraded townships respectively. The Residents’ direct reliance on several constitutional provisions was also found to be vague, insufficiently specified and inappropriate. The Court held that it would not be just and equitable to make an order benefiting only those who caused sufficient embarrassment to the authorities by litigation and not the many others in a similar situation. The Court considered the view that for the Municipality to provide interim services as demanded by the Harry Gwala Informal Settlement Residents would amount to discrimination against many other similarly situated communities under its jurisdiction. That could only be done on the basis that the circumstances of the Harry Gwala Informal Settlement Residents were exceptional and unique. The delay by the Gauteng province for a speedy decision on the application for upgrading was found by the Court to be the most immediate reason for the dilemma and desperate plight of the residents. The Court emphasized that as long as the status of the Settlement was in limbo, there was little that could be done to improve their situation regarding sanitation, sufficient lighting to enhance community safety and access by emergency vehicles, as well as a range of other services. The MEC for Human Settlements, Gauteng was ordered to take a final decision within 14 months of the date of the Court Order on the Ekurhuleni Municipality’s application in terms of Chapter 13 of the National Housing Code to upgrade the status of the Harry Gwala Informal Settlement. The MEC was consequently ordered to pay the costs of the applicants in the Constitutional Court.

Actual progress was that in 2006 the Gauteng Department of Local Government and Housing appointed a service provider, VIP Consulting Engineers, to conduct a feasibility study for the proposed development of Rietfontein 115 IR in Benoni. The results of the study indicated that a total of 389 stands for housing development could be developed in Harry Gwala Informal Settlements. This meant that only 389 beneficiaries out of a total of 3000 families would be catered for in Harry Gwala. This necessitated that another portion of land be identified that would yield more stands to cater for the balance of the families. The Gauteng Department of Local Government and Housing identified the two portions of land for this purpose but there was private development taking place at present. 

Alternative land therefore still needed to be identified. The Gauteng Department of Local Government and Housing had instructed Professional Resource Team to conduct studies, as per recommendations of the feasibility study, for planning purposes of Rietfontein 115IR. The first was the EIA Scoping Proof of Submission. The Gauteng Department of Agriculture and Rural Development confirmed receipt of the Scoping Report and Plan of Study for Rietfontein 115 IR submitted by “Envirolution Consulting” on 09 April 2010. The second was the Submission of the Preliminary Engineering Design. The preliminary design report for water and sewers was in process and would be finalised once the draft layout plan had been accepted by the local authority. The preliminary designs would be utilised if the area was considered feasible for residential use by the environmental studies currently in process. The third was Specialist Study A: Flood Line Determination. The flood line for the study area had been determined and incorporated into the draft layout plan which was currently in process. The fourth was the Geotech Report (NHBRC Phase 1). The geotechnical report for the proposed development had been completed and its details incorporated into the possible formation of the draft layout plan.

The EIA approval was in process. All specialist studies had been completed and were being incorporated to form part of the full EIA Scoping report. The report was expected to be submitted by the end of June 2010.The incorporation of the specialist studies would inform the suitability of the area for residential use. The record of decision was expected by the end of October 2010.

Adv Tladi emphasised that there were serious constraints on the Harry Gwala land: potentially dolomite land; shallow undermined land with a shallow perched water table; a number of servitudes and power-lines; and natural wetland and water courses in close proximity.

Temporary services Installed were extra water points within a 200m radius, and chemical toilets – 1 toilet per 10 households.

The draft layout plan was in process and was expected to be completed by the end of May 2010.

The Department thanked the Committee.

Discussion
Ms Borman asked if the deadline of the end of May 2010 for the Draft Layout Plan submission had been kept. It would influence keeping the subsequent deadline for the Report at the end of June 2010.

Mr Steyn wanted to know about the current status of the interim relief granted by the Court and noted that Adv Tladi had mentioned toilets and water. He was concerned at the slow pace in identifying land, especially if only 389 families could be accommodated at Harry Gwala. He noted that there had been successive EIA and Scoping Reports and wanted to know why the first study had not identified the problems with the land. In regard to the other two portions of land that had been identified, he asked when the land had been identified and why there was development on the land at present if it had been identified previously.

A Member asked how many families had been removed to Chief Albert Luthuli settlement, and if the municipality had identified land. Much land in Ekurhuleni was privately owned.

Mr Chainee asked to respond, as he had been the Head of Human Settlements for the Ekurhulini Municipality and could give the historical progression of the case. In relation to the draft layout plan, this could only be completed once the feasibility study had been approved. Feasibility studies had been done originally and because of the findings, such as the land being an ash dump, dolomitic and shallowly undermined, a decision had been taken to relocate the residents to Chief Albert Luthuli Section 6 and a number of families had agreed to relocate. Some families had refused to relocate and had embarked on the court case to force the municipality to upgrade in situ. As a result of the Court case the province and the municipality had redone the feasibility study. The present feasibility study had found that only of 389 stands could be developed and the authorities were now identifying land for the balance of the 3000 residents. In the intervening period there had been a re-invasion of the area by new families. It had become a highly contested piece of land due to the fluidity surrounding the Court case. He suggested that the Portfolio Committee visit the area as it was a test for a range of issues and community dynamics.

Ms Gasebonwe thought that land had already been identified and that the necessary procedures had begun already.

Mr Steyn enquired about the deadline set by the Court in terms of the interim ruling

The Chairperson stated that this was not a totally new report and that some mixing of issues with Diepsloot was taking place. When the Committee had been awaiting the Court ruling there had been discussion of the issues and it had been asked if Members were going to rely on the courts to perform our mandate. She stated that we should respect the courts. However, Members had the Constitution and policies which provided the mandate for service delivery. She asked Mr Zulu to speak about issues raised previously and on which there was no progress.

Mr Zulu responded that he would do the necessary research and that he would ensure that decisions taken previously were implemented. He noted that there were two projects, Diepsloot and Harry Gwala and that there was some overlapping. He asked Adv Tladi to respond.

Adv Tladi said that the issue of the bullfrogs and the developer who wanted to sell land only if he became the developer related to Diepsloot. This area had become prime land and there had been an escalation in land’s value.

Mr Steyn reiterated the questions that he had raised previously, namely, the two pieces of land that had been identified and the final date of the relief granted by the Court.

A Member was not satisfied with the report tabled as the issue had been developing since 2003 and there was still no progress.

Mr Bhoola stated that he recalled that the Committee had been informed that agreements were in the process of being signed by the respective parties. He noted that it had become common practice for the price of land to be elevated when it was earmarked for low cost housing development. In addition to what had been stated by Mr Steyn, Mr Bhoola said that, when the Committee had wanted to discuss the Harry Gwala case previously, it had been sub judice which had precluded discussion. He was perturbed that the 14 month interim relief period granted by the Constitutional Court was not being taken seriously.

Adv Tladi stated that the effective date of the Court order was 19 November 2009, when the judgement was delivered. The deadline would be 14 months thence.

The Chairperson expressed her strong feelings about the apparent lack of progress in the Department’s delivery. This, she said, was a matter of conscience. The President had given a clear mandate to the Department to deliver housing and upgrade informal settlements and there was a budget, so what was obstructing delivery?

Mr Zulu replied that the Chairperson’s sentiments were quite valid and reflected on the Department’s broader mandate. He agreed that the seven year delay in the Harry Gwala case was unacceptable in dealing with one problem.

Mr Chainee said that it was regrettable that the planned relocation of residents to Chief Albert Luthuli Extension 6, which had been planned for 6 000 households, had been resisted. The land on which the Harry Gwala Informal Settlement was situated was unsuitable for habitation. It was situated on an ash dump that had been used by Iscor and the land was dolomitic, amongst other negative environmental factors. People had been influenced against their better judgement by the manipulation of the legal system. On the status of the two portions of land queried by Mr Steyn, it would be have to be clarified with the municipality. In terms of the Environment Management Act, an EIA had to be done before any development could take place. The presence of endangered species, which had red data status, such as the bullfrog, could delay projects. It took only one person to object to bring development to a standstill.

Mr Zulu responded that there was a working group to look at the review of legislation, especially in respect of EIA compliance, which frequently resulted in bottlenecks and the wasting of resources, and which made officials appear as if they were not performing their jobs.  

Mr Bhoola said that strategies to overcome challenges must be developed and that it was imperative for the Committee to visit to obtain a realistic picture.

Mr Steyn asked why the HDA was not involved, as it was the HAD’s core function and sphere of expertise to identify land for development. It had not been mentioned in the presentations on the Eastern Cape and on Harry Gwala.

Mr Mdakane said that they were dealing with very challenging issues and he noted that Ekurluleni was in the economic hub of the country and attracted many people. Housing was in great demand. He noted the trend for land owners to escalate land prices when it was being bought by Government for housing development. He agreed with other members that the Harry Gwala issue had taken too long to be resolved. He was concerned about the environmental impact assessments, and said that there were many problem areas when it came to human settlements such as wetlands and the impact of mining. He noted that it was known that if one wanted to get rid of an informal settlement one did an environmental impact assessment.

Progress Report on the North West Housing Corporation (NWHC)
Ms Matlatsi presented the progress report on the implementation of the EXCO resolution on the absorption of personnel of the North West Housing Corporation (NWHC) as part of the winding down process.

Ms Matlatsi apologized for the non-submission of the report by the province. A lot of effort had been made to communicate with the province and she had received information as late as the previous day which she could not include in the presentation but would do verbally.

Ms Matlatsi reported that the NWHC had been established mainly to complement the efforts of the Government to provide different forms of shelter to the communities. The Institution had faced various challenges as to its sustainability and in some instances credibility issues. EXCO had resolved that the NWHC be wound up and the Premier had since made a pronouncement during her State of the Province address. Two task teams had since been established primarily to manage the process, one to concentrate on financial and debt management, and immoveable and moveable assets. The second team would concentrate on the absorption of staff.  The two task teams comprised personnel from the Housing Corporation, and the Department of Human Settlements.

Ms Matlatsi reported that 55 staff members of the Corporation had been absorbed by the provincial Department for Local Government and Housing. Three staff members had taken severance packages. Five staff members had resigned, including the Chief Executive Officer and two Executive Managers. One staff member had retired through old age or disability. Five staff members had been lost through death. 40 staff members had been matched and their process of placement was being finalised. Seven contract staff who formed the core management or other staff have had been allowed to complete their contracts which ended on 31 March 2010 and had been informed accordingly. The Chief Financial Officer of North West had been appointed to oversee the winding down process.

Ms Matlatsi reported on the financial implications. The most critical matter was that some of the outstanding debts were of statutory nature and if not attended to promptly would have the potential of bringing the institution to liquidation.  In total the corporation was indebted to an estimated amount of R 147 million in the Mafeking area and this debt would be taken over by the province; Treasury would also have to be approached.

Ms Matlatsi reported on the sale of immovable property. The Corporation used two methods to sell its properties. With regard to rental stock, the current occupants would be given the first option. If the first option failed, then the properties concerned would be sold on the open market. With regard to vacant land, the first come first served principle applied. Buyers were to pay 10% after the deeds of sale were signed, and would be given three months to finalise the sale.

Property was to be sold such as the rental stock, old stock prior to 1994, and vacant land. Benefit schemes that entailed minimum interest rates, a goodwill discount, and keeping the balance of sales to R50 000 were part of the winding up process.

Ms Matlatsi reported on the status of Manueng in the Free State. This also formed part of the winding up decision taken by EXCO and the Corporation's operation in the Free State also had to be wound up. The agreement reached was that the Free State bought the property for an amount of R22 million voetstoots [without warranty]. The total indebted amount was thus R22 million and R147 million which amounted to R167 million after the sale of property in the interim had reduced the debt by an estimated R2 million. There was still a lot of information outstanding and a comprehensive report would be made to the Committee in the future.

Discussion
Mr Steyn asked about the relationship between the NWHC, Treasury, and the province. He also asked whether the NWHC could have remained liquid if it had been left alone.

Ms Borman asked about the credibility and sustainability of the Corporation.

Mr Bhoola was concerned that there were inconsistencies in the application of the policy on subsidies. It appeared that some people were being favoured above others.

The Chairperson noted that there were many critical challenges. Most importantly it had to be remembered that one was dealing with human souls.

Mr Zulu said that there could be no better time to come to this exciting and challenging Department. Human Settlements was at the centre of service delivery as demonstrated in its expanded mandate. He indicated that the subject of the present report was the results of a preliminary investigation.

Mr Maphisa explained what was referred to as old stock. This was state property that predated 1994. Often there were no title deeds when it came to township housing prior to 1994 and this created problems when it came to devolving property.

Progress Report on the Implementation of the Judgement of the Constitutional Court Case [on the Joe Slovo Informal Settlement]
Ms Julie Bayat, Chief Director: Priority Projects, DOHS, noted that the last report submitted to the Committee had been on 04 November 2009. This report had given the results of the socio-economic study, the typology of the housing units, densities, transitional housing arrangements and allocation of the housing units.

For the benefit of new Members, Ms Bayat gave a brief background to the original Constitutional Court ruling on the Joe Slovo Informal Settlement. This ruling had inter alia stipulated that housing opportunities should be provided to minimise the relocation of people and that consultative engagement was to be ensured to engender community consultation and buy-in.

Since the last report to the Committee on 04 November 2009, the Constitutional Court had, with the consent of all the parties, on 07 November 2009 postponed the filing of the report until 30 April 2010. Subsequently, the province and national Department had filed reports with the Constitutional court on 30 April 2010 and 03 May 2010 respectively.

The Constitutional Court had also been asked to grant an order whereby any further reporting obligation was deferred until the consultative process as outlined had been completed. This was to curtail legal costs occasioned by the periodic preparation and filing of reports.

The present undertaking was the Joe Slovo Phase 3 Component of the N2 Gateway Project. The key elements of the court ruling of social facilitation and community consultation were being adhered to at all levels.

A Joint Technical Steering Committee had been established with representatives of local, provincial, and national departments. Its main purpose was to instruct and inform external consultants on the drafting of a final layout plan, to consult with the relevant community members about the final layout plan, and to submit the final layout plan to the City of Cape Town for its approval. It was also to consult with the Department of Environmental Affairs and Development Planning and obtain the requisite environmental and planning approvals. Thereafter it was to consult with the City of Cape Town in respect of MIG funding, and lastly it was to establish the township. Once the above process was complete, the design phase would begin. The bulk infrastructure of roads, services, and electrical supply installations would be constructed. The Joint Technical Steering committee would also propose the allocation process by which current residents of Joe Slovo would be allocated houses.

Costing of the top structure would be done by the HDA once the final layout plan had been approved and funding made available by the province and the local municipality. Initial transfers to beneficiaries were expected at the beginning of August 2011.

There were possible variations to the original court order and these had to be taken to the Court. Should the ongoing engagement process result in an agreement between all the parties, such agreement would be placed before the Constitutional Court once finalised. The agreement might result in various variations from the terms of the current Court order.

Variations might be necessitated by the redevelopment process envisaging all the units to be built on the site of Joe Slovo Informal Settlement being allocated to people currently resident there or who were resident there but moved away after the launch of the N2 Gateway Housing Project.

These people would no longer require temporary accommodation in the form of temporary residential units as the proposed development would be in situ. The proposed development would be at a higher density to accommodate substantially more than the 1 500 persons referred to in paragraph 18 of the Court order.

The proposed final (amended) layout plan was still at the drafting stage by the provincial consultants and was yet to be workshopped with relevant stakeholders and residents. As such, the consultation process to achieve final agreement on all the remaining issues was still not complete.

Discussion
Mr Steyn wanted clarity on the type of units and the square metres that would be provided. Beneficiaries generally preferred their own free standing units. He asked whether members of the community understood that it would be double and triple storey structures.

Mrs Borman shared Mr Steyn's concern about the multi-storey units and said that there should be an education process and a body corporate or similar should be established. She asked what control measures had been established to identify beneficiaries as control would be critical during this period.

Ms Bayat replied that community acceptance was crucial. There had been extensive consultation with the community and it was aware of the plans for multi-storey units. Management of the units and open spaces was essential and education would take place on roles and responsibilities. In terms of control mechanisms, the community was comfortable with the fact that the project was planned for it, and that no outsiders were allowed in. The City of Cape Town was part of the process, but it had not been part of the legal action. The action had been brought against the province and the national Department, not against local government. The City was part of the process, but there was a difficulty as it had not been able to allocate funding.

Mr Adler clarified the roles and responsibilities of the different stakeholders. The province was the developer and the funder with funds provided by the national Department. The HDA had become the officially appointed project manager a year ago and the three tiers of Government were now working together. The City of Cape Town was party to decisions such as the provision of infrastructure and was part of the Joint Technical Steering Committee. A feature of the live-work double storey units was that the design could accommodate commercial usage on the ground floor and living areas upstairs. Three surveys had been done to establish who was in Joe Slovo and the present figures were stable.
 
Mr Tshaka noted that the project should be seen in the context of the Court ruling. There were various factions and a division between those who had taken legal action and the group who had been prepared to be relocated and there was engagement with both. The HDA and province had embarked on an inclusive process of engagement with the community engagement process. This included a Draft Social Compact document. There was a need for acceptance from the community. However, this was time consuming, but progress was being made.

The Chairperson asked the Mr Zulu if the Department had investigated the Makhaza problem.

Mr Zulu responded that the Department was aware of the problem but had not yet acted on it.

The Chairperson thanked all the participants.

The meeting was adjourned.