Human Settlements Beneficiary Occupancy Audit & Sanitation Projects: Departmental briefing; Development Bank of Southern Africa's assistance in capacity building

Meeting report

Chairperson’s Opening remarks
The Chairperson noted that there were many problems with the occupancy of State-provided homes. There had been complaints because houses were allegedly being allocated to beneficiaries who were not on the waiting lists. She urged the Department of Human Settlements (DHS or the Department) to assist in getting some scientific and accurate information on this. The Chairperson added that the Committee also needed accurate reports on sanitation problems, especially in light of recent problems in Western Cape and Free State with toilet structures, and to assist the Committee when conducting oversight.

Development Bank of Southern Africa (DBSA) involvement with Department of Human Settlements
Mr Ravi Naidoo, Group Executive: Development and Planning, Development Bank of Southern Africa, gave an overview of the Bank (DBSA) involvement with the Department. He noted that one DBSA strategy was to invest in assets that served the poor and enhanced broad-based wealth creation in the region. The strategic approach focused on national priorities, such as the creation of decent work and sustainable livelihoods, education and the improvement of health outcomes. DBSA’s own development agenda included promoting broad based economic growth, job creation, cooperation, and good governance, so DBSA’s mission was broad and closely aligned with that of government.

Mr Naidoo presented the diversity of DBSA’s loan book portfolio as at 31 March 2010. Around 50% to 60% was associated with infrastructure and human settlements. DBSA’s exposure to municipal sectors in South Africa included areas of water, sanitation, roads, drainage and energy, in which DBSA typically would support municipalities in the construction of sustainable human settlements. Examples of DBSA Human Settlements Investment Projects and Programmes were private equity funds to address gap housing market failure, inner-city rejuvenation, and housing/property development projects.

Mr Naidoo noted that DBSA’s involvement with the municipal sector had highlighted some critical human settlements challenges and blockages. These included the lack of appropriate human settlements policies and plans, unavailability of strategically located land and outstanding re-zoning processes. There was also a lack of, or sub-standard, feasibility studies, and a lack of project management expertise. Municipalities had inadequate provision of bulk services, insufficient equity to carry early project preparation costs, and most promoters did not have good credit records. Despite this, DBSA had managed to support, document and show-case some examples of successful human settlement projects, such as the Flora Park/Serala View Development in Limpopo, and Elliotdale in the Eastern Cape.

Mr Naidoo noted that the DBSA Board had, in 2008, approved the Bank’s Human Settlements Strategy. In 2010, DBSA repositioned itself to become a partner to the State by accelerating key infrastructure delivery programmes, as human settlements had been identified as one of the priority areas of investment. The Human Settlements Strategy had now been reviewed and the new strategic position aimed to address the implementation need, innovative funding models and partnerships, integrated development planning and project and programme management capacity. This was underpinned by principles of sustainability and integration. He cited the Cornubia project in Kwazulu Natal as one example of a mixed use, mixed income project.

DBSA’s involvement in human settlement development was captured in a Memorandum of Understanding (MoU) with the Department of Human Settlements. In terms of this, DBSA would support the implementation of the Breaking New Ground (BNG) policy, and help to implement the national framework for sustainable development through agreed pilot projects. DBSA would give hands on implementation capacity support to key DHS projects and unblock priority housing projects. It provided technical assistance and grant funding to support planning and capacity, bridging finance to accommodate fiscal flows, and research and knowledge sharing. The framework of support was concluded in 2009, and a National Joint Working Committee (NJWC) and National Strategic Working Committee (NSWC) were established. DBSA was appointed as implementing agent for the Eastern Cape Elliotdale Rural Housing Project of 1000 units, and had also assisted in the planning of the Eco-Village in Ba-Phalaborwa. Twelve experts, including planners, programme managers, and financial and technical experts, were deployed to provincial DHS offices, to assist with housing programmes.

Mr Naidoo gave a list of projects supported. In Gauteng, DBSA supported the Hostels re-development, and in the Western Cape, DBSA experts supported the Urban Renewal programme, the Our Pride Housing Project (821 units), the Nuwe Begin Housing Project (1900 units), the Old Mandela Square Housing Project, the Zwelethemba Hostel upgrade, the Watergate Housing Development, and the N2 Gateway Housing Development Project. Within the City of Cape Town, these experts assisted with the management of Khayelitsha and Mitchell’s Plain Housing projects. In Eastern Cape, DBSA assisted with the Duncan Village Redevelopment Initiative (DVRI) of 21 000 units.

DBSA and the Department were now discussing possible new areas of cooperation. It would support the implementation of the BNG policy and government outcome 8, “Creation of Sustainable Human Settlements and Improved Quality of Household Life). This would be achieved by creating partnerships between the government spheres and DBSA, to develop mechanisms for capability support. DBSA also wanted to mobilise funds from private and other funding institutions, including international institutions, to assist municipalities with the development of credible human settlement plans and projects. A Human Settlements Research and Knowledge Sharing Forum was also established.

Mr Thabang Zulu, Director General, Department of Human Settlements, added that this and other Departments’ relationship with DBSA was good. He also referred to the Cornubia project in Kwazulu Natal as an example of a successful project.

Discussion
The Chairperson said that the issue of capacity within provinces and municipalities was previously of concern. The Committee had been enquiring, for some time, what support DBSA was giving to provinces, since officials had reported capacity problems. The Committee was grateful for this information.

Mr Chuene Ramphele, Head of Operations: Siyenza Manje, DBSA, explained that DBSA had approached all provinces, and four had requested assistance. DBSA looked at the quality of expenditure on provincial grants, and assisted by creating a planning pipeline. The provinces were urged not to start their planning only at the beginning of the financial year, but to plan well in advance to allow implementation to start immediately in the new financial year.

Ms D Dlakude (ANC) asked whether DBSA was giving support only to urban municipalities or whether it had relationships with rural municipalities as well.

Mr Naidoo replied that DBSA was involved with about 200 rural municipality districts. DBSA had deployed 600 of its own employees to provincial government departments to assist with planning issues, especially in rural areas.

Mr R Bhoola (MF) asked whether DBSA had any engagement with the National Planning Commission (NPC).

Mr Naidoo replied that indeed DBSA did have a relationship with the NPC, and this involved looking at long term development.

Ms Pamela Sekhonyana, Specialist: Human Settlement, DBSA, added that DBSA was constantly engaging with the NPC. The areas of collaboration covered various programmes. Policy review work was under way and the NPC had requested DBSA to support. Special modelling was planned with the NPC within Outcome 8 forums.

Mr A Steyn (DA) said the MoU signed in 2008 was an important step. DBSA played a critical role, but he was worried that DBSA itself might become under-skilled if 600 employees were transferred to government offices.

Mr Naidoo replied that DBSA would not drive itself to the point where it was placed at a disadvantage by assisting others, as that would defeat the purpose of giving support to government structures. DBSA was instead focusing on collaboration and allowing transfer of skills over time, as a sustainable means of support.

Ms M Borman (ANC) asked what salary criteria were used to qualify people for houses in Flora Park.

Ms Sekhonyana replied that the Flora Park project was in line with the current trends and studies as to what was “affordable”. DBSA worked with commercial banks to acquire at least 80% pre-approval for owners. The qualifying salary bracket was between R3 500 and R10 000 per month.

Ms Dlakude asked whether DBSA focused on creating jobs in rural areas, especially for women and people with disabilities.

Mr Naidoo replied that indeed DBSA also focused on this and each project had its own targets of employment with regards to women and persons with disabilities. A report was available, showing quite substantial numbers.

Mr Bhoola was concerned that DBSA might have the same mandate as the Housing Development Agency (HDA) with regards to land acquisition.

Ms Sekhonyana replied that this was not a duplication of functions, as no programme was done on its own. DBSA was engaging with HDA, and although it did focus on synergies and prioritising land acquisition as well as how land was prepared, each organisation had its own functions. 

Mr Steyn commented that he was not seeing alternative technology and green infrastructure coming through as much as needed. He wondered if DBSA had the capacity to do all that was envisioned while still trying to help municipalities.

Ms Borman referred to slide 7 of the presentation that dealt with the critical challenges and blockages. She said the challenges included poor quality of production.

Ms Dlakude asked whether the re-development of hostels in the Gauteng area involved demolishing and rebuilding the hostels or just the reparation of these buildings.

Mr Ramphele replied that there was no particular programme set up yet. The Gauteng provincial department would state what it wanted. At the moment, there was a lack of expertise in this province.

Ms Borman asked how far research had gone, commenting that this seemed to be slow.

Ms Sekhonyana replied that research was still at its initial stages but DBSA welcomed any inputs and comments from role players.

Challenges of Illegal occupation: Department of Human Settlements briefing
Mr Phillip Chauke, Chief Director: Monitoring and Evaluation, National Department of Human Settlements (NDHS), explained that unlawful occupation was defined under the Prevention of Illegal Eviction from Unlawful Occupation of Land Act, No 19 of 1998 (the Act). “Unlawful occupation” occurred when a person occupied land without lawful right, and without the express or tacit consent of the owner or person in charge,. There was prevalence of this in new informal settlements and newly constructed but unallocated houses. The Act stated that a person occupying land without the owner’s consent was guilty of an offence and liable to a fine or imprisonment. If the land had been illegally occupied for less than two years then the Court could grant an order of eviction, if satisfied that it was just and equitable to so. However, if the illegal occupation had lasted for more than six months, then this or other land must be made available by the municipality or organ of State for relocation of the unlawful occupants.

Mr Chauke noted that, within 48 hours of having become aware of an illegal occupation, and after visiting the area with metro police, a council or private land owner would have to obtain an eviction order. If this was not done, then the council (both where the council or private landlord were involved) had to provide illegal occupants with basic services, as determined by the Extension of Security of Tenure Act and following the ruling in the Grootboom Constitutional Court judgment.  

Mr Chauke highlighted that local government had the responsibility of providing beneficiary information. Local government had to determine the number of informal settlements, the number of backyard dwellers and the overall housing needs in the area. A waiting list was then compiled. Projects were then packaged for possible funding from various sources, which might include housing needs to be answered by the Department of Human Settlements or social grants needs directed to the Department of Social Development.

A beneficiary occupancy audit was done in the 2009/2010 financial year on 262 686 households (10%) in seven provinces. Mr Chauke said that close to 70% of the total occupants did not have title deeds. This pre-empted the DHS in speeding up the title deed process.

Mr Chauke outlined the findings as follows:
In Free State, 30% of households had legal occupants. 2.2% were renting and 2.0% had purchased the houses. Only 23.2% of occupants had the registered title deeds and 99.8% had valid IDs. 79.0% of houses were found to be habitable, and 19.3% were not habitable, owing to major defects.

In North West, 26% of occupants were found to be legal, with 4.2% renting and 3.0% who had purchased these houses. 30.8% had registered title deeds and 99.5% had valid IDs. 78.1% of the houses were habitable, with 19.5% not habitable.

Mpumalanga had a legal occupancy rate of 19%, with 5.4% renting and 2.6% purchased. 22.3% had registered title deeds and 99.5% had valid IDs. 68.0% of the houses were habitable and 21.8% was not habitable.

In Gauteng, 30.8% of occupants were legal. 2.0% were renting and 1.6% had bought these homes. 97.5% of occupants had valid IDs and 52.2% of occupants had registered title deeds, which was higher than other provinces. 89.2% of houses were habitable and 1.7% were not habitable.

Western Cape had a legal occupancy rate of 31.3%, with 4.4% renting and 3.2% purchased. 54.3% of occupants had registered title deeds, the highest percentage of all provinces. 98.8% of houses were found to be habitable and 0.2% were not habitable, the lowest percentage when compared to other provinces.

In KwaZulu Natal, 52.5% of occupants in the sample were found to be legal, with 2.4% renting and 2.1% purchased. Only 33.9% of occupants had registered title deeds, and 99.2% had valid IDs. 97.1% of houses were habitable and 1.1% was not habitable.

Limpopo’s legal occupancy rate was 55.8%. However, Mr Chauke explained that the criteria for auditing this province were different, since many people had left the province because of scarce job opportunities, leaving relatives to take care of their houses.  There were 10.5% caretaker occupants and  7.1% were dependants. 11.9% of occupants were second owners of the houses. A total of 643 (2.9%) of houses were unoccupied and 8.4% were not built yet, according to projects. 82.9% of houses were habitable and 17.1% were not habitable.

Discussion
Ms Borman noted that, overall, the rate of legal occupancy was low. The National Home Builders Registration Council (NHBRC) had previously briefed the Committee about major defects, which were apparent in a number of houses. She questioned the accuracy of figures presented by the department.

Mr Steyn agreed with Ms Borman, adding that NHBRC had reported that up to 70% of units had to be demolished or rectified. He wanted to know whether any information was taken from illegal occupants, including what had happened to the legal occupants.

Mr Chauke replied that the legal occupancy rate averaged 30%. The term “legal” was used for lack of a better word, and those who were “not legal” may not necessarily be strictly “illegal”. Preliminary beneficiary lists were initially compiled, and those names were then processed for eligibility of income, which was then a salary of R3 000 per month. Those occupants who qualified for houses were supposed to be entered by provinces and municipalities on to a database, but when the allocations were done, it did happen that people might be given a house originally intended for someone else, or the strict order might not have been adhered to. The audit was done by matching occupants to whatever database was available, and this showed a low number of “legal” occupants.  

The Chairperson commented that the information in the presentation was not user-friendly and in the future such information should be made clearer.

Mr Bhoola said that the presentation was not compiled mathematically well. He was concerned about the correct reflection on the backlog of houses, commenting that the huge backlog was the very reason for illegal occupations and establishment of informal settlements.

The Chairperson also had a problem with the information presented, commenting that these figures did not tally with a similar report presented in July 2010. She also asked why Northern Cape and Eastern Cape were still not included in the audit, pointing out that Members had previously asked for information from these provinces.

Mr Chauke replied that the 2010 figures were preliminary, which explained why they did not match, as some data had been outstanding. Eastern and Northern Cape were not included, as they did not express an interest in taking part, since another unit had already done a similar audit, which should not be duplicated.

Mr A Figlan (DA) wanted to know when the audit was started.

Mr Chauke replied that the audit was started in the 2008/2009 financial year.

Ms Borman said that the figures presented did not make any sense as there were no targets to compare them with.

Mr Chauke replied that a total breakdown for each province was available in the detailed report, but agreed that these figures should have been included in the presentation.

Mr Steyn noted that the percentages did not add up to 100%.

Mr Chauke explained that the percentages would not add up because of the criteria used to do the audit and the types of questions asked to occupants. He repeated that a detailed report was available for members, if they needed to see what specifically was assessed.

Mr Bhoola was concerned about people having the right to sell their homes after eight years, as there was no control measure to ensure the legality of the process.

Mr Neville Chainee, Deputy Director General, National Department of Human Settlements, replied that the eight years as the minimum time of ownership was enforced as a precaution, but the Department could not play any role in what owners did with their homes after lapsing of that time period.

National Sanitation Programme: Department of Human Settlements briefing
Mr Chauke said that basic sanitation covered the provision of a basic sanitation facility, which was easily accessible to a household. It also envisaged the sustainable operation of the facility, including the safe removal of human waste and waste water from the premises, where this was appropriate, as well as the communication of good sanitation, hygiene and related practices. He then summarised this, saying that “basic sanitation facility meant the infrastructure necessary to provide a sanitation facility which is safe, reliable, private, protected from the weather and ventilated, keeps smells to the minimum, is easy to keep clean, minimises the risk of the spread of sanitation-related diseases by facilitating control of disease carrying flies and pests, and enables safe and appropriate treatment and/or removal of human waste and wastewater in an environmentally sound manner.”

Section 24 of the Constitution named access to basic sanitation as a Constitutional right. The Water Services Act, No 108 of 1997 (WSA) ensured the realisation of this right. Policies and strategies were approved by Cabinet to direct how this would be done. The household sanitation backlog in 1994 was 5 084 255 but this number decreased to 2 665 945 in 2010. Over the past 15 years, a total of 3 036 372 toilets had been delivered.

Mr Chauke then spoke of the challenge of open toilets. Open toilets violated the dignity and privacy of users, as well as failing to protect users from the weather, and therefore violated users’ constitutional rights. Open (non-enclosed) toilets had been found in two municipalities, namely in the City of Cape Town (Makhaza) and the Moqhaka Municipality (Rammulotsi Township). In Makhaza 1 316 toilets were unenclosed but were later closed by households. Only 55 remained unenclosed and were subsequently uprooted by the City. Currently, none were unenclosed. The City was in discussion with the community to find a solution. The 55 households without toilets were still using communal or shared toilets. In the Rammulotsi Township 1 831 toilets were unenclosed. Three contractors were then appointed, but one contractor had problems with funds. Only 573 unenclosed toilets remained as at 12 June 2011, due for completion mid July 2011. The Director General had written letters to all Heads of Provincial Departments, and all reported that as at 16 May 2011, there were no other unenclosed toilets.

Mr Chauke explained the interventions by the NDHS. The Minister had instructed the department and provinces to assess the sanitation situation in the country. All Human Settlements programmes, including the Rural Housing programme, should have included appropriate sanitation interventions. The NDHS’s monitoring capacity was being strengthened to enable the Minister and MECs to deal with such challenges. Interventions by other state organs included instructions by the Minister that the Cape Town High Court judgment must be observed in future by all institutions providing sanitation facilities. The South African Human Rights Commission recommended that the Department of Monitoring and Evaluation should report back to the Commission, within three months, on the quality of sanitation services delivered by local government in the country.

Discussion 
The Chairperson wanted reasons from the Department as to why work was not done correctly or completed in the first instance. She asked when the project was initiated.

Mr Chainee replied that the programme was started in 2001, before the mandate of sanitation was handed over to DHS. However, this Department took full responsibility and did not want to blame anybody. A report showing the chain of events was available for the Chairperson.

Mr Steyn said that a housing project was started six years ago in Kwazulu Natal, where the toilets were also placed outside, in the form of open pits. The Committee had discovered this recently when doing oversight to this province. If these had not been closed, then the HODs were misleading the National Department in reporting that everything was done correctly.

The Chairperson said that the project referred to by Mr Steyn was a BNG project, with toilets built on the side of houses, but some houses contained no pits or provisions for toilets at all. She agreed that there seemed to be a problem with inaccurate information from provinces.

Mr Chainee replied that government did not condone the situation, and it norms and standards did not condone the provision of open toilets to households. Monitoring and oversight from the Department would be ongoing process, and the DHS was well aware of the need to check what was stated, to establish the reality.

The meeting was adjourned.