Frances Baard, Ekurhuleni, Pixley Ka Seme, Mangaung & Buffalo City plans & projects 2011/12

Meeting report

Chairperson’s opening remarks
The Chairperson welcomed delegations from both the Department of Human Settlements (DHS or the Department) and the five municipalities that were represented in the meeting. She noted that the Committee had invited presentations from municipalities who would be receiving the Urban Settlement Development Grant (USDG), as well as those that received their accreditation. The Committee would need to oversee service delivery implementation on the ground and correct utilisation of the appropriated funds. She reminded Members that human settlements offices were found at local government level.

The Committee also had to ensure that intergovernmental relations and cooperative governance were being taken seriously. Whenever the Committee conducted oversight visits it ensured that every sphere of Government was informed of these visits, although there had been some occasions when it was disappointed. However, in the last two visits in Free State and KwaZulu Natal (KZN), the Committee was appreciative of the fact that every official was present so that the Committee could interact properly and share the challenges encountered by the municipalities. Members of Parliament they had a duty to consider everything in the municipalities that had to do with service delivery, not only housing, and could share its findings with other portfolio committees, in the interests of the whole country.

The Chairperson noted that the USDG was a new grant. It was well received, because the main problems had related to the serious challenges of infrastructure and participation of all departments, despite the fact that the national government policy was adopted in 2004.   The New Growth Path (NGP) was intended to ensure integrated human settlement infrastructure, with the Department of Human Settlements playing a major role. However, there were some concerns that DHS was not doing enough and there was a need for more integrated planning. The Industrial Development Trust (IDT) had been in place for some time, but the Committee was constantly being asked about its credibility, and how it arranged its funding. The USDG was now to provide for comprehensive and integrated spatial planning, as well as to ensure that attention was paid to bulk infrastructure. Planning, in the past, had involved talking to people where there were no services or economic activity, but now the Committee felt that municipalities must present their plans, challenges, and state what would happen to money allocated to them in the forthcoming financial year. She urged delegates from municipalities to feel free to share their experiences, challenges and success with the Committee, and pointed out that this would be only the first of ongoing interactions.

City of Ekurhuleni Municipality briefing
Mr Pieter Swanepoel, Director: Spatial Planning, Ekurhuleni Municipal Metro (EMM) thanked the Committee for the opportunity to make a presentation, and noted that the document he had tabled was the Built Environment Performance Plan (BEPP) that was required by National Treasury and Department. He also noted that he would touch upon the concept of the Aerotropolis, which, although not dealt with in his written presentation, would be explained. He also noted that the project list from 2011/12 to 2013/14 was included.

Government Outcome 8 required that four different outputs had to be realised in the 2010/11 financial year. He set out the achievements. EMM had not achieved the upgrade of units in informal settlements and rental units. However, it had achieved compliance with the set national standard in terms of access to basic water and refuse removal. In terms of sanitation EMM had delivered 8 500 chemical toilets to 85 000 households. The electricity backlog was reduced by 7%, but there was still work to be done in the gap market. EMM had also identified well located land of 20 000 hectares (ha) and seven portions were purchased for housing development.

Mr Swanepoel showed a map of EMM, which indicated the areas of informal settlements, residential overflow areas which were closer to urban periphery, current housing projects and the land earmarked for residential development. The central part of Ekurhuleni had less land, but included small land parcels for residential development, to densify towards the city. There was also other municipal land, and land for strategic development, that were owned by the EMM. He tabled another map showing Tswelapele Extension Eight (also known as the Winnie Mandela Park), recent development in the Ekurhuleni Metro and Chief Albert Luthuli Park.

Ekurhuleni serviced its housing backlog in five geographical areas. In Tembisa there were 46 267 informal units, Daveyton had 47 879 units, the mining belt area had 46 236 units, Kathorus had 27 411, and Kwatsaduz had 29 557 units. The total housing service backlog was 197 350. EMM was in the process of reviewing the Municipal Housing Plan, based on the Metropolitan Special Development Framework (MSDF), which would reflect densification in housing, and development closer to economic opportunities. The Municipal Infrastructure Plan indicated the backlogs of infrastructure, and this was available, on request, covering electricity, sanitation, solid water, storm water, water, and roads.

Mr Swanepoel said that EMM, like the Gauteng Provincial Government, was using the OR Tambo Airport as the essential planning point. This concept applied primary nodes with linkages in a 20 to 25 kilometre radius between areas. The concept of “Aerotropolis” meant that the City planned around the airport, and wanted to capitalise on the economic development and job creation opportunities around the airport. EMM had mapped out a triangle in terms of real infrastructure at Ekurhuleni, that included main roads, rail infrastructure and the three basic components that were the basis of the transport system and development of human settlements. The transport networks linking OR Tambo and other airports included Prasa Rail, bus services, taxi services, Integrated Rapid Public Transport Network (IRPTN), Modal Transfer Facilities (MTFs), freight infrastructure, roads and the Gautrain.
 
From an economic point of view, mining contributed 1% of the Gross Domestic Product (GDP) of the EMM. Manufacturing was above 25% of the GDP, whilst support services like finance and transport were growing strongly. The capital investment framework at Ekurhuleni, under Chapter 15 of the MSDF, was described in terms of the services backlog, geography of EMM income, priority geographic areas, budget policies, capital prioritisation model, priority strategic projects, major investment or development projects, and major capital projects.

Mr Swanepoel then addressed the financing of the capital budget. He reiterated that EMM had huge service delivery backlogs, especially in infrastructure, making it important to have access to more funds, on an annual basis, to eradicate these backlogs. It was crucial that job creation should be addressed in the budget to stimulate economic growth. Currently, EMM’s capital budget was mainly funded from Government grants and borrowings. The total capital budget was R2.3 billion for the 2011/12 financial year. New loans accounted for R867 million, the USDG was R1.094 billion and other government grants were R152 million. There was R189 million accounted for as surplus cash. The USDG total was over R1 billion. This was broken down, by sector, so that energy would receive R202 million, water would receive R471 million, roads would get R170 million, waste management R50 million and health R58 million.

Mr Swanepoel then set out the spending in respect of each output. Basic services and informal settlements each received 12%. Housing rental received 1% and other received 45%. The breakdowns of services in the capital budget were also set out (see attached presentation).

The breakdown of 2011/12 USDG projects indicated that over R695 million was intended to address poverty backlogs, R396 million was set aside for economic growth, and R2 million for administration and city management. EMM would be launching a capital prioritisation model that would inform the issues of revenue generation, to provide services such as water and electricity. The model must also look at the reduction of costs in fuel, telephone and consumption management, refurbishment of infrastructure that resulted from the maintenance backlog, and sustainable human settlements, including integrated planning, infrastructure and housing delivery, with the correct priorities between townships and informal settlements. EMM would prioritise eradication of access backlogs and the formalisation of informal settlements into sustainable human settlements. It was placing emphasis on provision of essential services like water and sanitation, electricity, roads and storm water, and also took into account the social infrastructure needs, such as health facilities, emergency and crime prevention, and libraries and sports facilities.

Mr Swanepoel noted that the key challenges lay in the need to address public transport, economic growth through job creation, institutional accreditation, and urbanisation. Local policies and strategies  had to be reviewed. The EMM was working in the Aerotropolis (region A of development around the airport) and its major investment and development projects on the Capital Investment Framework.

Discussion
Mr K Sithole (IFP) asked if EMM had a particular reason why there was no budget allocated for Output 1 (informal settlements) for 2011/12 and 2013/14. He wondered if EMM had the capacity to deliver on the new mandate, especially since a number of its officials were currently on suspension, with full pay. He also asked about the strategy for cooperatives.

Mr A Figlan (DA) asked how many informal settlements there were, and how many were serviced by unit services. He noted the housing backlog, and asked if there were any land parcels owned by the municipality. He also asked about the relationship between EMM and the Housing Development Agency (HDA), which was supposed to acquire land for the municipality.

Ms M Njobe (COPE) asked which section of the population would benefit from the densification programme of EMM. She asked what the borrowing implications would be on the backlog. She enquired if, apart from the government grants, EMM was able to raise funds to implement the programmes, and if EMM needed assistance from the Committee.

Mr A Steyn (DA) was pleased to hear this first presentation from EMM. However, he was concerned about the zero achievements in informal settlement upgrades, under Outcome 8. This seemed to indicate that informal settlements were not receiving priority, which was not acceptable. He also noted zero achievements on rental units, despite the fact that an increase in rental units was part of government policy.

Mr Steyn was also concerned that EMM had purchased land, which was not its responsibility but that of the HDA. Some municipalities were continuing to act in isolation of the HDA. He was also concerned that EMM  had sold suitable land to private developers. He noted that the presentation made mention of 20 000 ha of land acquired, and seven portions transferred, but asked what percentage of land this represented.

Mr Steyn said that the presentation indicated no backlogs in solid waste, but this seemed to contradict what he himself had seen. Solid waste was part of infrastructure, and there were certainly backlogs here. He also raised a concern about the figure for backlogs in housing of 197 000, pointing out that there was no reference to the annual migration to the metro, and asked that these figures be supplied.

Mr Steyn sensed the enthusiasm for the aerotropolis concept. He was, however, concerned that this might detract the focus from other matters, and emphasised that there was a need to upgrade the down-town areas of the city and not to concentrate only on the airport areas. He further pointed out that there was little greening in the open spaces on the periphery, as the metro was becoming more dense. He suggested that the EMM should be allocating its funds to infrastructure, in order to attract more development and business to the city.

Mr Steyn also asked if the municipality had any plans around energy activities, and what the risks and challenges were, particularly in regard to the Aerotropolis development.

Mr Steyn asked if the EMM was better or worse off since the accreditation.

Mr Steyn asked that in future a better projects list should be provided.

The Chairperson asked the municipality to detail the problems around planning legislation, and to suggest what it might prefer. She also asked what the stumbling blocks were, saying that the Integrated Development Plan (IDP) concept was introduced a long time ago, and asked why there were challenges in implementing IDPs, and whether intergovernmental relations were working. She also enquired how the Committee could assist, saying that it was important that Parliament be kept informed of the challenges.

The Chairperson also asked EMM to elaborate on the issue of hostels that had to be upgraded. She enquired about EMM’s working relationship with the province, saying that there might be tensions if the municipality was overstepping the mandate of Provincial Government.

Mr Khaya Ngema, City Manager, EMM, said that many of the problems outlined were shared by other metros. However, he highlighted that metros and district municipalities in the Gauteng Province worked within the guiding Framework of the Gauteng City Region. EMM therefore needed to work closer with Tshwane, Johannesburg, Sedibeng and others, and there was also the question of cross-boundary work.

Mr Ngema agreed that there was a huge need for integrated planning in all services related to infrastructure, and USDG was an important instrument to facilitate integration.

Mr Ngema said that EMM had deliberately decided not just to focus on informal settlements, but to create a dedicated capacity within its housing department to deal with informal settlements. Generally speaking, EMM intended to abolish informal settlements altogether. However, the rate of migration was faster than it could cope. EMM had made some interventions, in terms of providing water, sanitation, and electricity, to improve the lives of people who were living in informal settlements. Apart from the limited resources to provide housing, there were also other dynamics that impacted upon elimination of informal settlements. Not all people in informal settlements wanted their own houses, and that was why rental housing became important. Not all living in informal settlements could qualify for housing. Many who did qualify also disposed of their houses, then went back to live in informal settlements again. Those having the economic means, often undocumented foreign immigrants, were able to rent houses.

Mr Zakes Myeza, Chief Financial Officer, EMM noted that 12% of the total budget allocation for 2011/12 financial year had gone to informal settlements.

Mr Ngema noted that one of the challenges with the legislation around land use management they encountered was the delay in getting legislation through. The Land Use Management Bill had been in the process for the past ten years. In the absence of new laws that embodied integrated planning ideals, EMM was forced to rely on old ordinances based on old philosophies of development and planning that did not reflect current trends and modes.

Mr Ngema agreed that EMM did have some officials suspended without pay, but the disciplinary cases were being dealt with decisively, and all managers had been asked to deal swiftly with suspected corruption and disciplinary lapses. There were also some problems with trade unions, but was trying to normalise labour relations.

Mr Myeza responded to questions on revenue raising, noting that EMM had a focused strategy of raising funds to supplement the grants and loans. It also had a Revenue Management Enhancement Programme, which focused on attracting and protecting current revenue and identifying other sources of revenue. He noted that the Committee could assist the EMM by supporting its calls for an increase in the USDG, so that it could enhance service delivery programmes with greater capacity.

Mr David Morema, Executive Director, EMM, noted that the metro was excited at the introduction of the USDG, and its accreditation, because for quite some time there had been discussion around housing delivery at local level, as well as tools being made available to force integrated planning at municipal level. The USDG and accreditation had come at the right time, in recognition of the need to develop sustainable human settlements. As early as 2006, EMM had already adopted a strategic document for sustainable human settlements, and the principles embedded in the USDG and the framework had been implemented since then, although there had been difficulties in implementation. Now, the problems of conflicting IDPs and provincial delivery should be resolved, particularly since municipal targets could be met in the relevant municipal financial year.

Mr Morema noted that between 1994 and 2011, the municipality had delivered over 89 900 houses in Ekurhuleni. 65 000 had been delivered between 1994 and 2008, before the province took over responsibility of housing construction. EMM hoped to increase the figure now that it was accredited.

Mr Morema also spoke to informal settlement management, saying that EMM had achieved quite a significant amount in relation to essential services. Since 2002, EMM had serviced 127 000 stands, and was upgrading by putting people on to services stands. He agreed that there was a backlog in housing delivery, which had not met the demand, because EMM had been trying to provide essential services. There was a need for a balance between delivery of infrastructure and essential services. All informal settlements in Ekurhuleni had water. Waste removal services were being increased. This would include the whole package of services in the next financial year. There were currently 119 informal settlements in the City of Ekurhuleni.

Mr Morema responded to the question of capacity on accreditation. EMM had been fortunate enough to have been tacitly accredited before 2008, because it had been effective in delivering houses, and because its departmental structure was designed to be able to roll out a number of housing programmes and construction internally. When the Province took over those responsibilities, the functions of the officials were redrawn to cover essential services programmes. EMM had a business plan, which was presented to the Assessment Panel, and this had highlighted the need for additional capacity, particularly for subsidy management. EMM had resolved not only to focus on the capacity for 2011/12, but to start making preparations for level 3, which covered 2014.

Mr Morema said that when the HDA was launched, EMM had engaged with it, and had given the HDA a business plan and land requirements. EMM had exploited an opportunity in private development areas, and this had funded the Urban Renewal Programme in Germiston. However, there was a need to streamline and strengthen the relationship between municipalities, province and the HDA.

Mr Neville Chainee, Chief Operations Officer, DHS, noted that USDG was a new grant, and was very different from the Municipal Infrastructure Grant (MIG). The purpose of USDG was “business unusual”, and thus it had different purposes from MIG, and it was important to realise this, notwithstanding some sensitivities in realising the capital commitments that should have been carried through. USDG focused on eradication of poverty, inequality and under development backlogs. National Government would, through the USDG, assist the municipalities to meet human settlements priorities. The expectation was not for municipalities to fund only poor households and see to backlog eradication, but the Committee needed to understand contributions both of municipalities and provinces to eradication of backlogs, poverty and inequality. Once all the plans had been received, the DHS would set targets and outputs for each metro, so that they would understand what was expected in relation to stands, informal settlements, eradication figures and bulk provision, and to see how bulk infrastructure could impact on each household, as the plans could be split. Conflicts had arisen in the past, in metros, because they had tended to focus their development in areas that were situated furthest from the periphery of the cities, where most of the poor lived.

Pixley Ka Seme District Municipality (PKSDM) briefing
Mr H Nel, Housing Manager, PKSDM, noted that his presentation would cover progress made by the District Municipality in terms of its accreditation. Key focus areas included the background of the district, integration of the housing unit into the district, intergovernmental relations, projects, HSS and Needs Register, plans and policies, and challenges.

Mr Nel said that this District Municipality was located in the Northern Cape Province, and had a total population of 166 412, which represented 16.49% of the population of the Province. It consisted of eight category B municipalities, which included Ubuntu, Emthanjeni, Siyancuma, Siyathemba, Kareeberg, Renosterberg, Thembilihle and Umsobomvu. Those were low to medium capacity municipalities with serious challenges of capacity, especially in their technical departments. Five  municipalities had engineers, but none had planning capacity, so these services were privately outsourced or performed by the municipality’s shared services department.

Since 2006, when conditional level one accreditation was granted, this municipality began the integration of housing units into its functions. The housing unit had since been populated by the manager with four housing clerks, one supervisor and two building inspectors. The clerks were mainly responsible for the Housing Subsidy System (HSS), Needs Register and Consumer Education. The hierarchical top structure of integration included a senior manager for corporate services, a housing manager, and technical specialist, which was serviced by the Project Management Unit. There was a vacant post for an IT specialist, a housing specialist, two building inspectors and four housing clerks as already mentioned above.

The Executive Mayor, through the Intergovernmental Relations Forum (IGR), led the intergovernmental relations department. The Forum was made up of district’s technocrats, including sector departments and supported by the Technical IGR, which was led by the District Municipal Manager. Those structures met on a quarterly basis, and the technical IGR could be called when there was something urgent.

Mr Nel noted that during the 2006/07 financial year, R650 000 was allocated to the municipality. In the 2009/10 and 2010/11 financial years, the municipality received a total of R3 225 000. Support came from the national Department for the first three financial years, and grants were received from the Provincial Department in the last two financial years. These grants were used for the creation of proper housing units, procurement of IT equipment, drafting of an organogram, appointment of staff, drafting of housing plans, a housing demand database research, drafting of policies, holding of workshops, acquisition of vehicles, and day to day administration of the municipality.

Mr Nel said that for 2009/10 the municipality received a qualified audit report, listing irregular expenditure of R1.3 million and an amount of R2 million relating to leave transactions that were not captured in time.

The municipality had been given full developer status in the Ouboks project in Colesberg, under the Umsobomvu municipality, which was a 1 848 unit development with 200 rental units. The Pixley ka Seme District Municipality would play a much more active role in human settlements projects in terms of level 2 accreditation process and the signing of the Memorandum of Understanding (MOU). The municipality was also involved in projects with municipalities in areas which included the National Homebuilders Registration Council (NHBRC) registration, closure of old projects, drafting of business plans, unblocking blockages in projects, and provisioning of inspectorate.

In terms of the Housing Subsidy System (HSS) and the Needs Register, Mr Nel noted that the municipality had an online HSS since 2006, but the system was unreliable. The municipality had approached the regional and provincial offices of the Department for capturing space, which enabled the municipality to catch up with the backlogs. The Needs Register was operational and it was hoped with the appointment of State Information and Technology Agency (SITA) the problems would be resolved.

Mr Nel noted that quarterly task team meetings were held, so as to ensure that all accredited municipalities received the necessary support and sharing best practices. The Department also ensured that the municipality was systematically introduced to current running projects, and it accounted, on a monthly basis, for progress on the accreditation process.

The major challenges faced by the municipality were the uncertainty around the funding model, lack of sufficient funding, the numbers of houses needed, HSS online unreliability, and the fact that the Needs register was not properly communicated. It also faced problems with in-house planning capacity. The National Department had tended to focus on metros, and had given ad hoc allocations. There was also ongoing national debate around the existence of districts.

Mr Nel concluded that although the municipality was one of the poorest in the province, it had to pull itself out of the doldrums of poverty. Accelerated housing delivery had improved the lives of more than a thousand people, and this had also created jobs to fight poverty. The municipality hoped that the implementation of the Breaking New Ground (BNG) policy in that region would further improve lives and bring hope, and over a short period of five years the municipality had moved by leaps and bounds to integrate housing into its daily function. He said that the decision to grant accreditation to this district municipality was the best decision ever made by the national department. The Northern Cape needed a paradigm shift. The municipalities in the province were best placed to deliver housing functions, as some were category B municipalities which did not have the capacity. This municipality had been a district municipality at work, was not fazed by the massive challenges, and it would continue to serve the community with accelerated provisioning of proper human settlements.

Frances Baard District Municipality (FBDM)
Mr Frank Mdee, Acting Municipal Manager, Frances Baard District Municipality, said that he would outline the progress made by his municipality in regard to implementation of housing since accreditation, and would also cover integration of housing units, IGR, support to local municipalities, funding, outcome 8, projects, HSS & Needs Register, and challenges.

The FBDM was situated in the north-eastern corner of the Northern Cape, with the largest population of 353 200 people. It was one of the five district municipalities of the province, but geographically the smallest district municipality. It consisted of four local municipalities, namely, Sol Plaatje, Dikgatlong, Magareng and Phokwane. 25 500 of its households were homeless.

Access to basic services was at a relatively high level, since water access was 96%, sanitation 92% and electricity 78%. The municipality had prioritised housing integration, after it was granted level 1 accreditation. The housing organogram was approved by the Council in 2008 and it was currently populated. The housing unit formed part of the Infrastructure Development Department. The housing unit reported to two committees of the Council: namely, Social Development and Infrastructure Development.

In terms of intergovernmental relations he noted that the IGR Forum was chaired by the Executive Mayor, and it included all mayors and municipal managers of local municipalities. The Forum was supported by the Technical IGR, with 57 managers of local municipalities and sector departmental representatives. The Technical IDR informed the agenda of the District IGR and the IGR Forum met on a quarterly basis.

Mr Mdee noted that policies were developed for each municipality in relation to housing sector plans, housing allocation, contract management policy, formulation of local Spatial Development Frameworks (SDFs), and research on housing demands. He also explained various projects that were undertaken by the municipality in terms of shared support services to local municipalities. These included IDP formulation and review, environmental health, technical expertise, budget, planning and development. The District Municipality had budgeted R5.8 million to assist local municipalities in their turnaround, which would go towards water and waste water treatment plans registered, establishing capacity of those plants for future planning, and the upgrading of municipal roads, in terms of operation and maintenance.

He said that the FBDM received conditional grant funding for human settlements, for capacity funding and housing development. Capital projects for the 2011/12 financial year included purchase of a refuse removal truck for Magareng municipality, construction of a 2 kilometre paved road in Pokwane municipality, and water treatment works for Dikgatlong municipality. The study of water and waste water treatment plants had been completed and operation and maintenance funds would be used according to proposals in the document.

He then described the details around National Government outcome 8. The first output for this required accelerated housing delivery opportunities, including upgrading of informal settlements. The FBDM had provided 700 households with basic services like water, sanitation and electricity, and 748 houses in the municipality were constructed. The projections for 2011/12 were that 150 services had to be connected, and 710 more houses were to be constructed.

In terms of the Housing Subsidy System and the Needs Register, he explained that the FBDM had been on the HSS Online system since 2008, but this system had never worked properly since inception. Although there was ongoing communication, the problems were not permanently solved. The Needs Register was operational but there were challenges.

Other challenges specific to this municipality included the vacant post of the municipal manager, finances, the budget of R4 million, the fact that the Service Level Agreement (SLA) for shared services was not in place. The HSS continued to be a cause for concern. There was also a shortage of suitable land, bulk infrastructure constraints, and MIG funding had been exhausted.

In conclusion, Mr Mdee emphasised that the Northern Cape District Municipalities were best equipped to deliver housing functions, as most of the smaller local municipalities did not have the capacity and would struggle to build that capacity in a sustainable manner. The Frances Baard District Municipality had established a functional housing unit and reached its accreditation.

Discussion
Mr Steyn asked both municipalities to explain the role they played in making use of the Housing Subsidy System, since they reported that the online system had problems.

Mr Steyn asked why the outcomes for housing demand were reduced. He asked if there were demands for housing rentals in the municipalities.

Mr Sithole asked both municipalities to give the number of informal settlements in their municipalities.

Mr Sithole asked how many blocked projects there were in the municipalities.

Mr Sithole asked if the municipalities were capacitated enough in terms of technical support to local municipalities.

Mr Sithole also asked about the number of vacant positions in both municipalities, and what they were doing to fill the posts.

The Chairperson asked the DHS to explain why the human settlement grant was not directed to the district municipalities.

The Chairperson reminded the Department that, in terms of the HSS, it had a duty to make the effort of supporting the district municipalities in the implementation and effectiveness of the system. She asked if the Department was really supporting the municipalities, noting that if there was sufficient support, these kinds of reports should not be received. She also asked why it was difficult for the Department to drive the process of capacity building in the municipalities, because cooperation was the key element for service delivery.

Mr Clinton Arendse, Chief Director: Planning, DHS, responded that it surprised him that the district municipalities did not get a direct allocation. The USDG was a Schedule 5 grant in terms of the Division of Revenue Act (DoRA), and was a conditional grant directly transferred to provinces and from provinces to municipalities. Therefore none of the district municipalities and metros received direct USDG payments.

Mr Nel noted that it was the objective of his District Municipality (DM) to provide adequate services and shelter to the inhabitants of the Pixley Ka Seme Municipality, and it remained the core responsibility of the municipality to deliver services, both in terms of infrastructure and better human settlements. This DM was moving in a direction of ensuring that there was a building inspector in each municipality and ensuring a better level of capacity to assist local municipalities, in terms of granting technical support for financial administrators, managers and councillors. The municipality had noted that human behaviour sometimes did not allow for the objectives to be fully realised, and it had to tackle the challenge of better conflict management.

The Pixley Ka Seme municipality had blocked projects, although six of these were to be unblocked by the Department. There were 20 informal settlements, which raised the number of backlogs to 15 000. Funding was needed to start the process of rental stock. There was a need for research desks in each local municipality. The audit qualification received on leave was an eye opener for the District Municipality and it would put systems in place to ensure that the same problems did not recur.

Mr Peet van der Walt, Director: Infrastructure, FBDM, said that the district municipality was fully capacitated and it was in the process of appointing a new city manager. The national upgrading support programme would provide technical assistance to the municipality, in terms of Outcome 2, under which the implementation plan and material for capacity support had been developed. There had been an increased provisioning of well located and affordable priced rental accommodation, in support of the accelerated delivery of housing opportunities.

The Chairperson advised the municipalities that they should establish a centralised research unit in the district municipality.

Mr Chainee said he would request the Sector Education and Training Agency (SETA) to assist municipalities in terms of capacity building and training.

Mangaung Metro Municipality (MMM) briefing
Mr Moeketsi Machogo, General Manager: Planning, Mangaung Metropolitan Municipality, explained the outline of his presentation. He noted that this municipality was located in the Free State Province, with 6 604 square km area between Thaba Nchu and Botshabelo. In Free State Province, Bloemfontein had 52% of the population, followed by Botshabelo and Thaba Nchu.

He noted that there were spatial fragmentation and interdependent development patterns, decline in the Central Business District, growth was taking place in a bipolar fashion, there was huge distance between the nodes, and dependence on the central area. The municipality’s planning was directed towards trying to achieve spatial integration and sustainability, and to strengthen the city core. Existing infrastructure was not utilised optimally, and here the municipality must intensify and insist on densification. It was therefore important that it consolidate, contain and maintain smaller towns and concentrate on regional transport efficiency linking the rural market of Thaba Nchu.

In terms of infrastructure programmes, Mr Machogo explained that there were different types of infrastructure. For management purposes, the municipality was ringfencing the finances. There were various levels of services, according to areas – including both water-borne and dry sanitation. Old systems tended to break down more often than the new or refurbished systems, which resulted in lower service levels in some areas. The quality of service was measured by quality, quantity, reliability, environmental acceptability and cost of the provider. Categories of services were allocated, according to the bulk, internal networks, and were financed from different sources.

Mr Machogo noted that there were different levels of sanitation over a wide area. More than 156 000 stands were provided in Bloemfontein, Botshabelo and Thaba Nchu. There were more than 145 000 stands provided with water in the same places. There were still backlogs in terms of roads.

Mr Machogo described the capital programmes for backlogs, noting that more than R169 million had been allocated and committed for capital programmes for the 2010/11 financial year and R4.4 million for 2011/12.  He noted that the costs for the eradication of bulk backlogs in all services, for the short-term and long-term, amounted to R2.3 million and R1.7 million respectively.

In terms of housing demand, Mr Machogo explained that housing units provided in Mangaung between 2006 and 2009 amounted to a total of 3 600, at a total expenditure of R226 million. The type of dwelling built in the metro ranged from a brick structure on a separate stand or yard, down to informal dwellings or shacks. The housing demand backlog was 60 000 houses in the Mangaung Metro.

In attempting to meet Outcome 8 targets in the Free State Province, the metro had upgraded 26 400 households in well located informal settlements, with access to basic services and secure tenure and had developed 5 280 rental units to ensure the accreditation of the metro, so as to expand support to six municipalities. There were 16 informal settlements that had been formalised, and 30 233 residential sites were yielded.

Mr Machogo also noted that the ownership of land by the municipality, integration of the poor and medium income groups would address the gap market. The overall transport plan included the public transport nodes, current and future routes, and current transport networks. The inter-modal linkages in the metro consisted of Bastion Square Taxi Terminus, Bloemfontein Railway Station, Central Park Bus Terminus and Russell Square Taxi Terminus.

Mr Machogo concluded that the risk and challenges of the Mangaung Metro included the ageing infrastructure, service delivery backlogs, increased demand for municipal services, uncoordinated settlement patterns, rapid urbanisation and migration, supply chain management process, illegal occupation of land and insufficient financial resources.

The USDG budget allocation for the Medium Term Relief Expenditure Framework (MTREF) period showed that the main part of the 2011/12 budget was allocated to the construction of new roads, with over R78 million committed to this. Overall, the project cost would be close to R412 million for the 2011/12 financial year, increasing to R483 million and R531 million respectively for 2012/13 and 2013/14 years.

Discussion
The Chairperson what the intention of accreditation was, and what outcome was expected after accrediting municipalities. It was important for the Committee to put an emphasis on the outcomes of accreditation when engaging with the Department. It was also important, when new settlements were established, to harmonise the relationship between the municipal officials and developers, so as to fast track development. The entities must take the upgrading of hostels seriously, because it was part of the government programme.

Mr Sithole asked the municipality to explain and unpack the IGR with other Metros. Establishment and development of cooperative governance would be an important area. He also asked the newly accredited municipalities to explain their capacity.

Mr Figlan was worried about the relationship between the three spheres of government, and urged them to meet to settle any issues of contention, as it would be unhealthy for public servants to have in-fighting. Municipalities were accredited precisely in order to achieve government goals. It was unacceptable if they did not receive support from their government partners.

The Chairperson added to the point raised by Mr Sithole, saying that the Committee had not previously highlighted the issue of cooperation. Members were concerned that social and economic development in human settlements should be informed by the objectives highlighted in the State of the Nation Address (SONA), and here, development of cooperation was highlighted as an element of economic development. It was therefore crucial to establish coordinated planning. She indicated that she fully understood that Mangaung Municipality was new in the field. She trusted the Department would provide the necessary support for the municipality.

Mr Playfair Morule, Executive Mayor, MMM, responded to the IGR question, by noting that on matters pertaining to the metro Mangaung was working with the city networks and also engaged with the former city manager to put up the metro and all the necessary legislative structures. There were currently no formal agreements with other metros, except one agreement with Northern Cape.

Mr Raymond Taye, Chief Financial Officer, MMM, added that for the past three to four years Mangaung had been a member of the Metro CFO Forum.

Mr Chainee stated that in the following week, the Department would be hosting a workshop where he would be making a presentation to both the Province and the City, concerning issues of accreditation and there was great awareness from both the City and Province to harmoniously work together with the department. The province of Free State represented an area of excellence particularly in relation to the issue of IGR and accreditation but they assured the metro of their commitment to work with it. One of the issues that clouded the presentations was the fact that when they benchmark and if they have a metro like Ekurhuleni with its huge funding base they tended to forget that R400m – R500m in relation to Mangaung was the substantial amount of injection. It was also important to note that in relation to equitable share in terms of inequalities, poverty, etc, there were other issues they had to take into consideration and sometimes they did not realised the smaller budget constraints that occurred.

Buffalo City Metro Municipality (BCMM) briefing
Ms R Pretorius, Director: Planning, BCMM explained that her presentation would look at how the Buffalo City Metro Municipality (BCMM) intended to utilise the Human Settlement Development Grant (HSDG) and USDG to meet outcome 8 targets and to look at the BCMM Outcome 8 projects for the next financial year.

The BCMM was located in the eastern part of the Eastern Cape Province and was a corridor to the primary node of the City of East London through Mdantsane, and Dimbaza in the west. The administration entity was not the same as the economically-defined functional area. It included the greater Amatole Region as far as the OR Tambo Region. King William’s Town area was the secondary node and functioned as the regional service centre, with Bisho as the Provincial Administration hub. The metro population was around one million people and 75% were in the urban areas, with 25% settling in rural areas.

Some of the challenges and constraints of the BCMM were the rapid urbanisation over the past ten years, growth of informal settlements, civil infrastructure capacity, development and maintenance, delayed housing provision, business sector needs not being met, spatial fragmentation, access to land, and unemployment, poverty, and lack of skills.

The strategies envisaged by the BCMM to overcome those challenges were to improve and develop infrastructure to meet the demand for housing and economic growth. BCMM had to manage the urbanisation process in terms of planned serviced land and densification to avoid urban sprawl. The metro had to consolidate and integrate special development in terms of public transport, facilities and existing services. It needed to grow the economy and develop human capital with regard to the improvement of skills levels.

The sanitation backlog was 67% which was a huge constraint in the rollout of housing. The roads backlog was 56% of gravel roads that had to be developed and maintained by the Municipality, and 40% of households still needed to be electrified. In terms of housing the BCMM had a total of housing backlog of 121 000 households, of which 62% was in urban areas and 38% in rural areas.

In terms of civil infrastructure, she noted that the current challenge was that there was no overlap between areas of demand and infrastructure capacity. There were reasonable quantities of social infrastructure and services were reasonably well developed.

Transportation consisted of road and rail networks, and the metro had an Arterial Road Network Plan from 2006 to 2023. The rationalised routes included BRT lanes, truck and bus lines, terminal points and major transfers. The Spatial Development Framework (SDF) was affected by two major factors, firstly, the topographical and environmental constraints posed by rivers and broken steep terrain, and secondly, the historical and political factors, since the region was impacted by separate ideology. The SDF was intended to be the spatial image of the IDP, and to be the strategic, indicative and forward planning tool, so as to guide decisions on land development.

Ms Pretorius noted that the Human Settlement Framework was based on the SDF and urban core. There was a three-level strategic approach, which included identifying special areas of priority in terms of the Constitutional obligation to render basic services within the given resources, creating best chances for development and generating financial support for basic needs investment in areas of social transfer.

In terms of key land, she noted that the BCMM had identified land parcels in Bisho to the King William’s Town Corridor, and various land areas on the beach front and Amalinda Junction. There were 154 informal settlements with a housing need of 121 000 units. The national Outcome 8 focused on the development of sustainable human settlements and improved quality of household life. The target for upgrading was 59 440 households in well located informal settlements, with access to basic services and the development of more than 11 000 rental units. The Buffalo City 5-year housing delivery plan would fit into the targets and bulk informal settlements had been identified in Mdantsane area.

She concluded by noting the key challenges to be met by the metro. These included spatial integration so as to bring people together in sustainable, formal and informal settlements, with the provision of basic services to all. The IGR and cooperation with regard to funding alignments and capacity for a variety of services was a challenge for the City. The delays in the acquisition of land and transfers affected development. The institutional structure was finalising how the USDG would be managed, and it would be phased in and operational by 1 July 2011. This facility would go a long way in ensuring constitutional responsibility by the municipality.

Discussion
The Chairperson noted that it was important for the Department to assist the municipality. Although the metro had a good presentation, it did not indicate the targets for the 2011/12 year. She asked the metro to bring a list of projects under the USDG. She also urged that it not ignore Orange Grove development. The delivery agreement should not merely play lip-service, because there were needs in terms of the backyard policy. She also felt that the skills needed to be further addressed. She was concerned that  environmental issues were sometimes used as a scapegoat to hinder development, but they should not be ignored.

Mr Sithole asked if the 5 262 units that were completed in 2011 were occupied. He also asked the metro to indicate the percentage of land that was privately owned.

Mr A Fani, Acting City Manager, BCMM responded that in relation to the land question, the BCMM had asked that it should work with the MEC for Local Government. He was setting up a committee with the MEC for Public Works and MEC for Economic Development, who would also then deal with the national government around land parcels. He explained that these posed a problem for many municipalities because Transnet was not presently interested in discussing the land that it owned in the city. National Treasury and the Department of Human Settlements were working well with the municipality, and the Department had sent an official to assist with issues of accreditation and USDG implementation.

Mr D Govender, Director: Housing, BCMM, responded that all the 5 262 social housing units were occupied. However, in the 2011/12 financial year the BCMM had identified a rollout of 5 457 units within projects that were ready for development. Province had indicated that the land should be owned by the Buffalo City because of the bulk infrastructure.

The Chairperson thanked the delegation from various municipalities for their presentation and assured them that the Department and the Committee would continue to work with them to realise the housing needs of the country.

The meeting was adjourned.