Eastern Cape Housing Cooperatives, in particular Amalinda Housing Cooperatives; Fitcher's Corner Progress Report on land bought by Thubelisha; & progress made on rectification of Ducats in East London, Ndlambe Municipality, Alfred Nzo District Municipalit
Chairperson: Ms B Dambuza (ANC)
Date of Meeting: 02 November 2010
The Department of Human Settlements briefed the Committee on the Eastern Cape Housing Co-operatives. The Department informed the Members about the project’s background and highlighted the many challenges that the Department was facing especially with reference to the Amalinda Project. Among these challenges was the occupation of some of the houses, allocated to families who had saved enough money, by people who had failed to save the required amount. Other challenges were a lack of funding, capacity, office space and infrastructure, and a mismanagement of funds.
Members criticised the Amalinda Project’s lack of progress in its 10 years of existence. The same problems continually recurred and were not solved. Members expressed their disappointment about the lack of training and commitment in the co-operatives, the contradictory figures in the report, and the poor management and planning of the project in general. They enquired why more houses were built in urban areas than in rural places. Members also wanted to know why unemployed families were expected to pay to obtain a house and whether such families did not qualify for fully subsidised houses. Members were also concerned with the lack of aid and guidance given to the families to aid them in saving the required amount. Questions were asked around the Swedish funding that the co-operatives had received and why the funding was terminated.
Provincial input centred on the responsibilities of the co-operatives and other role players and explained how things had turned out as they had. Non-savers occupying houses, as well as the problems surrounding leadership of the co-operatives, were identified as the biggest hurdles standing in the way of successful completion of the project.
Members emphasised the importance of visiting the area in order to determine exactly what the situation was. The lack of time frames set for progress and completion of the project was a further concern. Questions were asked about the board of the co-operative. Members expressed their disappointment and concern over various other management and monitoring issues.
The Department then declared that it had decided to establish a project management capacity unit to operate at national level and to ensure that all the projects were properly managed according to set management plans. Since everything the Department did was project-orientated, the sector could not succeed without better management capacity. The Amalinda project was badly managed but the Department would improve the situation by putting a proper management plan in place. The project management unit would be accommodated in the budget of the next financial year.
Members commended this idea.
The Department briefed the Committee on the progress on rectification of houses in certain areas of the
Members were concerned about places that were not mentioned in the presentation. Generally, the Members were not impressed by the report, as they thought that it contained contradictory information as well as some gaps. They enquired about the large amounts of money being spent on assessments, the need to appoint new contractors in various areas as well as the role of the National Home Builders Registration Council. They emphasised the importance of oversight. Members further requested a report from the intervention team. Members also highlighted the need for the Member of the Executive Council to be present at such meetings and to account for what was going on. The Department agreed with this suggestion.
Presentation on the Eastern Cape Housing Co-operatives
Mr Thabane Zulu, Director-General, Department on Human Settlements, explained that his team would present on the Eastern Cape Housing Co-operatives, but a Director of the Eastern Cape Department of Human Settlements had been invited to attend and offer input on the subject matter.
Ms Noligwa Tembani, Director of Rental Housing, Department of Human Settlements, explained that her purpose was to respond to the question of the Committee on the challenges facing the Eastern Cape Housing Co-operatives, specifically the Amalinda Housing Co-operative (Amalinda).
Co-operatives had housed 8 900 families in urban housing and 1 100 in rural housing. A housing co-op was a legal association formed for the purpose of providing homes to its members on a continuing basis. There was one secondary housing co-operative in the
The Amalinda Co-operative was formally registered on 30 June 1999 with a membership of 198 households of which the majority were unemployed, or having irregular income. Women represented 80% of household members. The average household income was less than R1v500 per month. The total number of houses in the first project was 195. The Amalinda co-operative settlement project involved 216 housing detached units in
Ms Tembani then proceeded to give an exposition of the challenges that Amalinda was facing. She explained that a list of names of beneficiaries had originally been approved by the Government in 2002 and people were given time to save. About 55 people who had not saved the R2 070 by the final cut off date, were removed from the allocation list by the ELHMC and replaced with new members who had saved. The ELHMC then asked the Provincial Department of Housing (PDoH) to remove the non-savers and replace them with new savers. The PDoH did not do this as it claimed that the original list of approved beneficiaries must receive houses. In the meantime about 20 new savers who were not approved by the PDoH had moved into some of the houses that were being built. A court case between the illegal occupiers and the PDoH ensued. The court ruled in favour of the illegal occupiers and they were allowed to stay in the houses. The subsidies had consequently been approved and the non-savers’ names were removed from the subsidy approved list. While this was happening, about ten of the original non-savers had also moved into some of the houses that were being built. A negotiated solution could not be found as the 10 non-savers refused to move out of the houses that they occupied. To date, no solution to this problem had been reached.
Ms Tembani continued by listing other challenges. There was a lack of funding, proper communication and an accounting system. There were also no proper office space, systems and administrative support. Finally, there was a mismanagement of funds as well as limited capacity.
However, the local municipality (
Mr R Mdakane (ANC) noted how the co-operatives were set up to fail due to a lack of adequate training and non-commitment. If, however, they were managed well, they could assist greatly in addressing the shortage of housing in communities. There should also be a system of governance in these areas. He highlighted the fact that governance and training were very important issues that needed to be addressed. He also noted how the Department was currently not doing well in the area of providing housing in the
Ms D Dlakude (ANC) said that she was satisfied with the level of female representation, but asked what the Department was doing regarding people with disabilities and the elderly. Secondly, she asked whether the Department had a strategy aimed at teaching people how to save money and aiding them in the process, in order to enable them to save the required R2 070. She also wanted to know whether the Department considered people’s circumstances and the reasons why they were unable to save the required amount of money, before removing them from the housing programme. Thirdly, she asked whether the Department offered the beneficiaries of these housing projects training in property management which could assist them in keeping their properties clean and managing them effectively.
Ms M Borman (ANC) fully concurred with what Mr Mdakane had stated. She referred to the fact that the co-operatives had housed 8 900 families in urban housing and 1 100 in rural housing and asked the date to which the figures related. She further enquired about the discrepancy in the figures mentioned in the presentation in so far as the presentation firstly said that the number of houses in the project was 195 but then stated that the project involved 216 housing units. Thirdly, Ms Borman asked whether a management plan was not established between the co-operatives and the Government at the beginning when the Department approved the policy. Lastly, she enquired as to the way the required money was saved and managed by the beneficiaries of the project, for instance, whether there was a special bank account that was managed by the Department.
Mr A Steyn (DA) remarked that the project had been set up for failure because the process in terms of which the houses were allocated to people was wrong. He said that, in terms of the presentation, many of the families who were to receive houses in terms of the project were unemployed. Such families should have qualified for fully subsidised houses and they should not be required to pay any money for their homes. Secondly, he also referred to the fact that there were 195 subsidies, but 216 units to be built. According to Mr Steyn this meant that the co-operative was looking for problems, as it was obvious from the outset that there would be a lack of funds to complete the project. Lastly, he noted that the housing programme had been established in 1999 and that the Department had been struggling with the same problems for 10 years. He asked how the Department would accelerate progress in future.
Mr K Sithole (IFP) referred to the fact that the process of finding a negotiated solution to the dispute between the non-savers and the PDoH was unsuccessful as the non savers refused to move out of the houses they had occupied. He asked whether the process of negotiation was still underway or whether the Department currently had no process in place. Mr Sithole also asked how many houses were not completed yet. Lastly, Mr Sithole enquired about the difference in the amount of houses provided in rural areas, in comparison to the houses in urban areas and asked why this gap existed. Did it mean that the focus was not on rural areas even though rural areas predominated in the
Ms N Mnisi (ANC) thanked the Director-General for the honest report. She noted that housing projects also contributed in the area of job creation. Secondly, she said that the Amalinda project was clearly not sufficiently capacitated and asked how the Department expected delivery without capacity. She stated that this was a big problem that needed to be corrected. Lastly, she asked who was responsible for the management of the Amalinda project.
Mr A Figlan (DA) also referred to the difference in housing in rural areas and urban areas and wanted to know to what period of time these figures related to. Secondly he said that People’s Housing Process (PHP) was mentioned and that this inevitably involved the community and a facilitator from the Province. In this regard he asked where the municipality was and whether it was also involved together with the Eastern Cape Provincial Government. Lastly, he asked what the purpose was of the amount that had to be saved in order to qualify as beneficiary for the project. He said that savings in the context of PHP meant that the person wanted a bigger house.
The Chairperson said that the Committee needed an explanation on the Swedish funding. She asked why it was stopped. She said that there had to be a person or an entity to be held to account and she believed that entity to be the Department. Secondly, she asked about the dispute between the National Home Builders Registration Council (NHBRC) and external funders.
Mr Sithole referred to the lack of co-operation between the PDoH and the co-operative mentioned in the presentation and asked what the present status was.
Input by the Eastern Cape Department of Human Settlements
Mr Zithulele Rayi, Director of the Eastern Cape Department of Human Settlements, offered a provincial perspective on the matter as some of the questions posed by members also related to the role and contribution of the Provincial Department.
Mr Rayi proceeded to talk about the rules and responsibilities of the Provincial Department, the
A second issue raised by Mr Rayi, was one of leadership in the co-operatives. He remarked that within co-operatives there had to be annual elections, which had not been taking place for the past ten years in the case of Amalinda. Accordingly, illegitimacy of the board of directors was a possibility. However, the Provincial Department needed continuity of the board, because the current board possessed the important information and the Provincial Department had been working with it through the past ten years.
A further challenge that the Provincial Department was faced with was the fact that people were not paying rates to the
Another challenge was that people preferred to obtain ownership over the houses built for them. However, if they were granted ownership, it would defeat the whole objective of the co-operative, while co-operatives could go a long way in addressing backlogs in housing development. Mr Rayi also acknowledged that capacitation was needed on a large scale.
Mr Sithole asked how it is possible that the matter could not have been resolved in ten years. He added that the Government should be regulating the project in order to make sure that it was capacitated. Furthermore, he emphasised the importance that the area must be visited again in the following year by the Committee so that the people themselves could give some input. Mr Sithole explained that this was important, because he believed that Parliament was sometimes detached from what happened at ground level.
Ms Dlakude asked whether the people were offered some leadership on how to save money and noted that saving was difficult even for people who had enough money. Secondly, she referred to the R1 million worth of material that was stolen and the fact that no arrests had been made in relation thereto. She wanted to know whether there was indeed any material bought with this money and asked for an update on the progress of the investigation.
Ms Mashishi stated that she was concerned about the lack of time frames set for completion of the project and emphasised the importance that the Department must push for the completion of the project.
Mr J Matshoba (ANC) said that the people who had saved must get their houses. He also said that it was necessary for the Committee to visit the people involved in the project in order to find out exactly what was going on.
Mr Sithole enquired why there had been no change in board members for 10 years.
Mr Steyn emphasised his first question about the identification of the appropriate beneficiaries for the project. He then referred to page 2 of the Memo of the Eastern Cape Department of Housing to the Portfolio Committee on Human Settlements and expressed his hope that the reference to “55 200 square metre houses” was erroneous. Lastly he asked how R1 million’s worth of material could just disappear.
The Chairperson said that the problems were a result of the lack of policing over housing co-operatives. She referred to the
Mr Figlan requested that the Committee be provided with the relevant documents in advance, so that Members could study them in detail and prepare their questions.
Mr Zulu apologised and undertook to provide the Members with the relevant documents at least three days in advance.
Mr Zulu remarked that it was difficult to respond to all the comments and questions raised and emphasised the importance of being as honest as possible. He noted that the issue of project management capacity remained crucial and that the Department was headed for disaster if something was not done about the current lack thereof. Hundreds of the projects attempted by the Department had never been completed and properly handed over as closed projects. He explained how everything that the Department did was dependent on project management capacity as the Department worked on a project basis. He declared that he would make it his own responsibility to ensure that the issue was addressed. He explained that he had made a departmental decision that a project management capacity unit would be established which would operate at national level and would ensure that every project was properly managed. The sector could not succeed without better management capacity, because everything that the Department did was project orientated. Every project that was started from now on would also be required to have a management plan. The current project was terribly managed and he would fix it with a proper management plan that would be put in place.
Mr Zulu said that he was not going to address every issue raised by every Member, because all their questions related to poor management. He declared that he agreed with all the issues that were raised.
Ms Borman commended his plan of establishing a project management capacity unit and asked when the Committee could expect such a unit to be put in place.
Mr Zulu responded to this by saying that the wheels of Government move very slowly, but that it was his intention that by the next financial year the Department would be operating according to a more defined structure. The project management capacity unit would first have to be approved by the Department of Public Service and Administration. However, provision would have been made for it in the budget for the next financial year.
Ms Ndlakude also thanked Mr Zulu for his approach. She raised her concern about contractors who did shoddy work in one area and then just jumped to the next province. She mentioned Kusile Africa Holdings as an example of such a contractor.
Ms N Mnisi (ANC) said that the report really served as an eye opener of how important it was for the Department to push certain processes. The report showed that there was a disjunction somewhere and that better project management was crucial. Accordingly, the Committee was looking forward to the project management capacity unit to be put in place.
Mr Zulu said that he wanted the unit to be run directly from his office so that he could monitor it properly.
Presentation on the progress made on rectification work in certain areas in the Eastern Cape
Mr Zulu commented that it was difficult to do this presentation after the discussion that just occurred, because rectification would not have been necessary if the project had been managed effective in the first place.
The Chairperson added that in fact, R1.3 billion had been allocated to the project and accordingly the Committee wanted to know where the money was.
Mr Johan Wallis, Chief Director, Programme Implementation Support, Department of Human Settlements, outlined progress on the rectification work in the areas of Ducats in East London,
Mr Wallis presented information on the following areas:
With reference to Fitch’s Corner in
Mr Figlan noted that the Province was very vast and many places were not mentioned, for example Ilinge, Cala, and Elliot. He said that such places should also be included in a report like the present one. He further noted that the Eastern Cape Member of the Executive Council (MEC) for Housing should also have been present.
His second question related to the fact that houses were being demolished and that new houses are being built almost next to them. He said that this was a waste of tax payers’ money. Thirdly, he emphasised the importance that the
Mr Sithole remarked that the
Ms B Vatiswa (ANC) noted that if it was not for the fact that the Director-General had come up with the project management capacity unit, the Committee would have left the meeting very disgruntled due to the poor state of affairs. She said that there seemed to be no accountability or sensitivity for waste incurred and that things were allowed to go haywire. Care should be taken that the omitted areas mentioned by Mr Figlan be visited as well. She asked what happened to the previous operators and how many have been made to account for the losses that they caused and how much have been collected from them. She further asked whether it had been investigated whether assessing contractors had no connection with present or past operators as sometimes these people were the ones who are causing the problems, while still making money out of it.
Ms Ndlakude emphasised the importance that oversight must be done so that the Committee could be sure what the Department was talking about. Secondly, she asked why the same contractors who built the houses, were asked to do the rectification as this amounted to a waste of money and time. Thirdly, she asked what was being done about the illegal occupation of the houses. Fourthly, in the light of the fact that the Department had the resources and the contractors, she asked why it was taking so long to do the rectification. Lastly, she said that the reference to the road and storm water rectification in Matatiele was not the problem of the Department of Human Settlements.
Ms Vatiswa commented on the big wrong that needed to be corrected and said that the Department had been facing the same problems for ten years now. These problems were escalating, because nothing was being done about it. She further asked why the completion date for the Matatiele project was only in 2013.
Mr Matshoba emphasised the deficiency of the report due to the fact that the compilers thereof had not been to the
Mr Steyn asked whether the assessment was done by NHBRC and when it was done. The reason for his question was that if it had been done two years ago, the funding required, as noted in the report, would already be outdated. Secondly, he raised the issue about the previous contractors. He noted that the Minister promised that these contractors would be brought to book. Not one of the houses was built properly and were there any retentions? Thirdly he wanted to know whether anyone was being held responsible. Lastly he referred to the instances where the report stated that the required information could not be obtained from the Province. He lamented the fact that so much money was spent on assessments, but that it was still unclear how much the project itself would cost.
Ms Borman said that the Department was in a very serious situation. She noted that there was no money allocated to that which needed completion, but that completion dates were set already. She asked where such money would come from and how it was being budgeted for. The Committee needed an accurate report in these instances so that the Committee could actually monitor the figures and the management. Ms Borman then said that it was time for the Department to attempt an exercise, like this one, but accurately, of all the units in the
The Chairperson noted that the MEC was not happy about the presence of the intervention team. She also wanted to know with regard to the
Mr Matshoba asked the Director-General to return to the Committee at a later stage with a better report and accompanied with the Head of Department.
Ms Vatiswa remarked that the Committee also needed to see the report from the intervention team that had been to the
Mr Mdakane warned against the danger of not counting and monitoring the building and rectifying of houses closely enough and said that if the Department was not careful it would be rectifying the same buildings over and over again, which would be a waste of time and money. He noted that the members and staff of the Department should really respect the Committee, but also assist it to deal with the serious challenges the Department was facing. He said that it cannot be expected of the Committee to support a budget with no information to assist it. He further noted that the Committee must meet with the MEC and other key persons for discussions on some of the issues. The intervention team must also assist the Committee in some instances.
Mr Mdakane further raised the point that all the houses that have been built so far needed rectification, after the contractors had been paid millions to build the houses. He said that at the current pace the Department would never meet its target.
Mr Mdakane said that he was convinced that where the report was silent on costs, it was because the costs were too high and the Province accordingly wanted to hide it.
He further commented on the fact that the Committee would need a better report the next time. He said that it was for the sake of the poor people that they fought corruption, because in the end it was the poor people who suffered.
He also enquired as to the criteria used to appoint contractors.
Lastly, Mr Mdakane highlighted the importance of dealing with the issues as these were issues that resulted in much protest from the public. He also said that the Department would have to work with the MEC in order to solve the problems that they were faced with.
Ms Borman said that with the Money Bills Amendment Procedure and Related Matters Act 2009 (Act No. 9 of 2009), Parliament had a bigger responsibility towards the way in which money was spent. She disagreed that the Department had to pass the budget and said that if the money could not be spent responsibly, it must go somewhere else. She noted that, in the last budget, the Department could not tie the money up with what was being projected, therefore the Department and the Director-General as head thereof needed to ensure that the Committee had a proper grasp of the facts before they approved the budget so that the Committee could be sure that the money was spent wisely and properly.
Mr Matshoda said that the Committee should ask itself why the NHBRC was being paid and what exactly was being done by the NHBRC.
The Chairperson said that the question should be whether the NHBRC had the capacity to manage the project. and if it did not, she wanted to know what the Department was going to do about it.
Mr Zulu said that the Department had debated whether the housing projects should be managed at national or provincial level. The final discussion was still to be had, but he argued that the responsibility of rectification as intervention of Government must be assumed at national level, because one could not expect of the same people who had made the initial mistakes to be able to rectify the situation properly. Accordingly, the national Department should be allowed to establish its own mechanism of procuring intervention at national level. He further commented on the extensive backlog for rectification and said that it was indeed a bad state of affairs.
Mr Zulu said that he would take the report to the Minister and also impress upon the secretariat to submit the exact recommendations of this Committee, because the Committee had touched on very important policy issues.
He further noted that a problem with expenditure patterns did exist. The Department was currently working on the final report for the midterm review, to make sure that the Department was doing well. He remarked that all he could say at this stage was that the Department was not doing well.
Mr Zulu explained that the power and functions of the provinces remained an issue. He said that there were obligations at national level, but that implementation occurred at provincial level. He explained that the Department had requested a project list from all the provinces and to date four provinces have not yet responded (including the
The Chairperson asked Mr Zulu to take the Committee’s recommendations to the Minister.
The meeting was adjourned.
- Department of Human Settlements. Eastern Cape Housing Co-operatives. Presentation
- Eastern Cape Department of Housing. Update on Amalinda Housing Project. Memo
- Department of Human Settlements. Presentation on the progress made on rectification work in certain areas in the Eastern Cape
- Research Unit. Eastern Cape Housing Cooperatives: Amalinda Housing Co-operative, a summary