Pixley Ka Seme accreditation status; Mpumalanga progress report on Oversight Recommendations, Rental Housing Amendment Bill Committee Report

Meeting report

Committee Report on Rental Housing Amendment Bill
Ms Charmaine Van der Merwe, legal advisor from the Parliament Legal Unit, read the draft Committee Report on the Rental Housing Amendment Bill. It highlighted the process that had been taken by the Committee. The following key issues were summarised: the process followed since the introduction, concerns noted by the Committee, work done by the Committee during the deliberation stage, the regulatory impact assessment, why the Committee had proposed further amendments, the two reasons that had resulted in the withdrawal of Bill and the recommendations of the legal team to the Portfolio Committee. The Committee still felt that the appeal process was necessary in the Bill and this was not the first legislation where such a process had been applied. The cost implications of the Bill had been taken into consideration and the Department had been consulted throughout the process. The Committee had a mandate to legislate and as such it had to fulfil its obligations despite the withdrawal of the Bill

Discussion
Ms M Borman (ANC) said the report gave an excellent account of events from the outset till the time the Bill was withdrawn, adding that all stakeholder participated had been included. She commended the team that had compiled the report.

Mr S Mokgalapa (DA) said the report was concise and clear. The Committee should not shy away from doing its legislative role because the process that had been followed was a classic example of separation of powers, by the Portfolio Committee exercising oversight and not dancing to the tune of the Executive. Extensive work had been done on the Bill since the outset and he would have loved to question the Minister on why he had decided to withdraw the Bill at the tail end of the process. The Committee Report showed that the Department had not done its work and it was piling all the blame on the Committee. The Department had been extensively consulted and a letter had been written by the Chairperson to the Minister on the progress of the Amendment Bill. As such it was mind boggling that at the end, the Bill had been withdrawn. He moved for the adoption of the report.

Ms D Dlakude (ANC) agreed with Mr Mokgalapa, adding the report was superb and well researched. She thanked the researcher and the law advisors for their work during the amendments process. She seconded the report.

Ms M Njobe (COPE) appreciated the contribution of the legal team, researchers and the Committee to the Amendment Bill. She said that Portfolio Committees were becoming less of extensions of Departments. Despite having had done a number of pieces of legislation, it was the first time to come across a situation where a Department withdrew a Bill that the Portfolio Committee insisted was necessary.

The Chairperson appreciated the support of all the Members, the legal teams and the researchers who consistently cooperated despite the withdrawal. She suggested that the definition of dwelling on page 5 must be added.

The report was adopted with amendments.

Pixley Ka Seme District Municipality progress report since its accreditation
Mr Hastings Nel, Housing Manager, Pixley Ka Seme District Municipality (PKDM) presented on the progress that had been achieved by the Municipality since the accreditation process. The presentation focussed mainly on the background of the District Municipality (DM), integration of the housing unit, intergovernmental relations, projects, policies and plans, the housing subsidy system (HSS) and the needs register as well as challenges faced by the DM. The district was one of five district municipalities in the Northern Cape Province and was the second largest covering a total area of 102 727 km² and consisted of eight Category B Municipalities: Ubuntu, Emthanjeni, Siyancuma, Kareeberg, Renosterberg, Thembelihle and Umsobomvu. The DM had a population of about 182 006 which represented 16, 9% of the total population of the Northern Cape. Of all the local municipalities, only Emthanjeni, Ubuntu and Umsobomvu had technical engineers. None had planning capacity. They either relied on the DM’s Shared Service Department or outsourced.

Integration
Since the granting of the conditional level one accreditation in February 2006, the DM created and integrated the housing unit into its functions. The housing unit was populated by a housing manager, four housing clerks, a supervisor and two building inspectors. The clerks were responsible for the HSS, the needs register and consumer education while inspectors did building quality assessment under the custody of PMU technicians. Page 8 and 9 of the presentation showed the revised structure of the DM’s organogram which would now include a Department of Infrastructure, Development and Housing with its own senior manager.

Intergovernmental Relations
The DM’s Inter-Governmental Relations (IGR) were led by the Executive Mayor through the District IGR which included all District Mayors and Municipal Managers. The technical IGR was led by the District Municipal Manager and was composed of technocrats from all the Districts. The District IGR met regularly and the technical IGR was called in when ever its services were needed. It was responsible for holding workshops with local municipalities (LM) on the process of drafting housing plans and formalising an agreement in the form of a Memorandum of Understanding (MOU). Page 11 of the presentation detailed how the Municipal Infrastructure Grant (MIG) was allocated to all eight LM with the exception of PKDM which had not received the funding.

Finances
To assist with the accreditation, the DM received allocations from 2009/10 until 2011/12 (see document for figures). It had not received any funding for the 2012/13 financial year. The grant was used for establishment of proper offices, procurement of IT equipment, drafting of housing plans, drafting of policies, workshops, administration and site inspection visits. The DM received a qualified audit from for the 2007/8 to 2009/10 financial year and an unqualified audit in 2010/11. The last report had matters of emphasis on predetermined objectives, irregular expenditure, MIG underspending that emanated from delays in implementing projects caused by soil conditions and bad weather.

Housing Backlog
The DM had a housing backlog of 19 927 with the highest number recorded in Siyathemba, Emthanjeni, Umsobomvu and Syancuma (see document for specific figures on backlog).

Projects
The DM was given full developer status in the Ouboks Informal Settlement Upgrading Programe (ISUP) located in Colesberg in Umsobomvu Municipality. The development had 1 842 units and 200 rental units. The Municipality provided support to Renosterberg, Siyatthemba and Siyancuma Municipalities on housing projects on a provisional basis. It was hoped that with the signing of the implementation protocols and approval of level 2 accreditation, the District would do more Human Settlements projects. Some of the work done by the District in LM included NHBRC registration, closure of outstanding projects, unblocking of blocked projects and providing inspection. The DM’s projects for the financial year were listed (see presentation for detail).

Housing Subsidy System (HSS) and Needs Register
The system was problematic and often unreliable and the Municipality had since approached the Provincial and Regional offices of the Department to allow it to use their offices for capturing data on the needs register. There were a number of challenges associated with the needs register unavailability of reports and there was little help forthcoming from the provincial Department and the National Department. The filling of forms was still being done at local municipalities due to lack of funding.

Integrated Development Plan (IDP) Alignment
The DM had a credible IDP process and a number of policies had been drafted including the Contractor Management policy and Housing allocation policy, among others. The Spatial Development Framework had been completed and approved.

Relations with the National Department.
The District had a roller coaster kind of relationship with the National Department. Quarterly team meetings used to be held to benchmark progress as well as HSS group meetings, but under the current prevailing situation, meetings were only held occasionally. Officials from the National Department rarely attended meetings and in cases where they were represented, junior officials without power to pass instant decisions, were often assigned. However the Department was doing its best to help the Municipality in currently running projects and the DM was assessing progress made since the accreditation on a monthly basis to improve delivery. Poor communication from the province affected the Municipality’s attendance at MINMEC meetings but it had since attended one.

Challenges
The District Municipality’s performance was affected by extensive challenges which included the funding model and lack of enough funding, there was no allocation for the Housing Unit in 2012/13, the HSS was not user-friendly, it faced challenges in planning, lack of housing capacity by local municipalities as a result of lack of funding, no clearly defined coordination between the province and the DM, lack of role definition between accredited Municipalities and the Department, lack of investment in infrastructure, inversely proportional allocation for transport to the housing quantum and shortage of bulk infrastructure (see document for detailed list of challenges)

Discussion
Ms Dlakude wanted to know the role of the DM in assisting with solving scarcity of engineering professionals at smaller municipalities. Were there any rural sanitation programmes being implemented by the DM and was the bucket system still existing? If so, when would the process be undertaken? The report was replete with contradictions. For example, bullet 3 on page 21 and bullet 4 on page 23 and had no timeframes on projects. She asked if the DM had informal settlements and blocked projects and what was the extent of the projects?

Ms P Duncan (DA) said the Northern Cape province was among the worst in service delivery. There was no definition of functions between the DM and local government. How was the DM going to solve the major challenges it faced in data capturing without IT personnel in its organogram. Why was a vacant position not yet filled and was the DM advertising in the Northern Cape only?

Mr Ntsikelelo Jack, PKDM Municipal Manager, said the Municipality used the services of IT personnel in the Finance Department for the other departments. Skilled IT people only came to rural areas to gain experience, after which they left and the district had no capacity to cater for their needs.

Mr Mokgalapa wanted to know the rationale of accrediting Level 2 status to Municipalities when they did not have delivery capacity and when there was no funding for programmes. How was the DM allocating houses without a proper needs register? The reprioritisation of the benefit list was one cause for the problems in housing. Did it receive the Rural Infrastructure Development Grant (RIDG)? Sanitation was not addressed in the report despite it being the biggest challenge in rural municipalities. How could the DM have proper IGR when there was friction between it and the National Department? What action was the District taking to address blocked projects and what was the extent of the rectification process in the DM?

Mr Hastings Nel said neither the District nor the province was notified of Rural Development projects as Municipalities often employed contractors without consulting them.

The Chairperson urged the Department to address the matter.

Mr Nel said that one of the major problems faced by the District was the lack of suppliers in the Northern Cape. In most cases, material for building was imported from other provinces and the process was costly.

Ms Dlakude wanted to know what was meant by the word ‘Other” in the paragraph that listed forms of energy used by municipalities. What plans had been put into place to address informal sanitation.

Ms Borman was concerned about the way NHBRC was carrying out its mandate, adding that could result in prolonged rectification.

Mr Mokgalapa agreed that there was bound to be rectification if NHBRC was not executing its duties. Was the District getting an allocation for the Rural Household Development Grant, if not why?

Mr Nel replied they were not sure on whether to wait for NHBRC to approve projects and get penalised by the Auditor-General for failing to spend the allocated money, or continue with projects without consulting NHBRC.

Ms Duncan said despite inherent challenges faced by the District, it was not supposed to play the victim because there were issues that it had failed to accomplish even if funds had been allocated.

Ms Borman wanted to know the role of NHBRC when the DM was employing building inspectors. The report was contradictory on the IGR between the Department and the District Municipality. It was unacceptable that the DM was not attending MINMEC meetings.

Ms J Sosibo (ANC) said there was no indication of progress in Thembelihle despite funds having been allocated. What was the reason for the qualified audit report the Municipality had received three times in a row. She asked who was responsible for changing the beneficiary list, adding that such actions were responsible for service delivery protests. She asked about the number of blocked and unblocked projects.

Mr B James, PKDM CFO, replied that the matters of emphasis identified by the Auditor-General, had been addressed.

Ms N Mnisi (ANC) questioned why municipalities were being accredited without prior consideration of their capacity to deliver on housing. What was the relationship between the NHBRC and building inspectors? There was no synergy between the District Municipality and local government.

Mr Nel said that blocked projects referred to those that had been started by municipalities but, as a result of lack of capacity, had stalled. The District was helping with the completion of such projects. The DM worked with NHBRC and all Municipalities were registered with the institution. Unfortunately the organisation conducted inspections at its own time which delayed the development of projects.

The Chairperson said a list of the blocked projects was needed and the form of action that the District had taken in resolving the challenges.

Mr J Matshoba (ANC) wanted to know why the National Department was allocating a meagre budget to the Northern Cape despite its pronounced challenges.

Ms M Njobe (COPE) said the lack of capacity was very worrisome. She wanted the National Department to explain why the DM had not received housing funding for the 2012/13 financial year. Was the District following proper processes in applying for funding? What was the breakdown of grant expenditure on programmes?

Ms Dlakude sought an explanation for the friction the DM had with the National Department, because the latter had indicated to the Committee that all was well. How did the DM appoint its volunteers?

Mr Nel replied that volunteers were paid stipends whenever their services were enlisted.

Mr R Bhoola (MF) asked if there was synchronisation and a clear definition of jurisdiction between the District and Local Municipalities.

Ms A Mashishi (ANC) asked if the housing backlog of close to 20 000 houses was post 1994 or not and when would that be addressed.

The reply was that the only area that had pre-1994 backlogs was Siyancuma but that had been addressed.

The Chairperson asked how the DM was assisting with the drafting of IDPs because it was clear that the municipality was not directly involved. There was a possibility of fiscal dumping given the amount of unspent funds on the MIG allocation. She asked why the DM had not yet received the R441 000 that was part of the 2011/12 allocation. Who was responsible for drafting housing plans because the Committee had found out that non-implementers were being hired to do the job? She requested that the Municipality should make available a report on its budget before the Committee could adopt the report. Where was the impediment in signing delivery protocols? She asked how was the DM operating without a house needs register and a credible Human Settlement Development Grant policy. Why was the National Department allowing amendments to the needs register because that was the source of corruption in Human Settlements? The Committee had convened a meeting where the Department had agreed to design a national housing policy but to date no progress had been reported. The Committee was not going to tolerate a situation where a housing official would be appointed to assist with communication between the DM and LM because they both had housing units. She suggested that the Municipality must provide a full report on the issue of sanitation and all the projects that fell within Outcome 8.

Mr Jack responded that the DM would respond to most of the matters that had been raised in writing but some of the questions could only be answered fully by the Local Municipalities. The District would submit two reports in two weeks’ time. One in power point and the other with a detailed response to all questions asked. There was need for a clear definition of roles between the District and Local Municipalities. The drafting of IDP processes and planning was done in-house so as to operate within available financial resources. This  affected the work of Engineers and Technicians within the Municipalities. Some Municipalities had neither housing unit nor a designated housing official which explained why the District was capturing the forms for the Local Municipalities. Due to the unavailability of resources and qualified personnel in the rural areas, the DM was using an IT official from the Department of Finance to carry out duties in other departments as well. The Municipality had no means of retaining the skills of professionals who often came to rural areas to boost their careers, and later left for urban areas. He denied that there were contradictions in the report on the IGR strategy, arguing that meetings were being held but provincial and National Department officials did not attend the meetings or they preferred sending junior representatives who could not take immediate decisions. Lack of finance was the biggest challenge for the rural municipalities which resulted in penalties being imposed by the Auditor-General’s Office.

The Chairperson asked if the DM’s housing allocation policy was balanced.

Mr Nel said the needs register was not fully operational and some municipalities had a waiting list while others did not. The District Municipality was reprioritising housing allocation.

The Chairperson said that there was supposed to be a balance in the way the Municipality was allocating houses because, in some instances, unmarried youths had obtained houses ahead of old people who had been waiting for over 50 years to get houses. The allocation was supposed to reflect age groups that were benefiting from the housing policy.

Ms Dlakude proposed that when making reports on housing the Municipality was supposed to reflect age groups and vulnerable groups such as orphans who were also entitled to benefit.

Mr Jack suggested that the District prepare a detailed report on all the questions that had been asked including its expenditure since 2006.

Ms Renita Soodeyal, Executive Manager: Housing, Northern Cape Department of Cooperative Governance, Human Settlements and Traditional Affairs, said that the R441 000 that was outstanding and should have been paid to the District, had been effected. The HSS line for the District was problematic and the province had since authorised them to make use of their offices for data capturing but the matter was being addressed. The province was going to submit a detailed report on all of the questions that were directed to it.

Mr Neville Chainee, Chief Operations Officer, National Department of Human Settlements, said that there was no way the District housing programmes could succeed without a proper IDP process. Despite spending all its allocation, the Northern Cape still faced challenges which raised the question whether or not money was being channelled towards intended programmes. The availability of money was not going to solve problems but proper planning when allocating funds. The allocation formula was being looked at and Treasury had been engaged on the matter. An accreditation support team had been established to support accredited municipalities.

The Chairperson said the three spheres of government were supposed to meet and provide a comprehensive report to the Committee on the challenges that had been raised.

Mr John Lolwana, Executive Mayor: PKDM, said meetings on benchmarking progress were constantly held but the major problem was to get the Department of Cooperative Governance and Traditional Affairs (COGTA) to be part of the meetings.

Mpumalanga Department of Human Settlements response to Committee Oversight recommendations
Mr David Dube, Head of Department (HoD): Mpumalanga Department of Human Settlements, presented on the province’ response to the questions that had been asked by the Committee following its oversight visit the previous year.

▪ Responding to the recommendation that asbestos roofing be replaced with a proper roofing system, he said that no houses had been roofed using asbestos. They had been roofed using Nutex Big Six by Everite products. About 142 units in Rebone and 99 in Ramogeletsane had been re-roofed. A service provider had been appointed to re-roof 175 units in Emalahleni and 52 units in Victor Khanye and they would commence work at the beginning of the 2012/13 financial year.
▪ On slide 17 of the presentation, he noted a table of land purchased at an estimated value of R95 million in 2008. The Cabinet had directed that the piece of land in White River should be reserved for the construction of the university and the Department was working with the Department of Public Works on the project. For the piece of land in Kinross, the Department of Agriculture had set aside funds for the establishment of a township and in Evander – a town establishment was done but it needed to be reconfigured. In Nkangala, Middelburg, the land and been given to the Middelburg Housing Association which had since started working on it. Slide 19 listed the areas where farm worker assistance projects were being constructed including in Nkomazi at Stratmore Farm with 65 units, Steve Tshwete Municipality at Doornkorp with 32 units and Emakhazeni with 50 units.
▪ Burn Stone Mine had assisted in building houses for the community. The houses had been built but the mine could not fulfil its promise of giving R10 000 to each beneficiary. The matter had been given to their legal department to verify if there was breach of promise.
▪ With regards to the number of jobs created, the figure was about 42 620 during 2011/12.
▪ On recommendation number 22, a Human Settlement Indaba had been held in November to allow for good relations with the traditional leaders and public and the MEC was scheduled to address the Council of Traditional Leaders.
▪ On matters related to beneficiaries, the Department was in constant communication with municipalities to make sure that projects were not allocated without a proper list of beneficiaries.
▪ With regards to monitoring municipalities and contractors, the Department had reconfigured its organogram such that technical staff were now located in the Districts and each team was headed by a director. The Inspectors were doing their job well and certificates were thoroughly verified and the quality of work was up to expected standards. Slide 25 showed how Nkangala District, Gert Sibande District and Ehlanzeni District had been reconfigured.
▪ The Department had two blocked projects in Mbombela in Ehlanzeni and at Dr SJ Maoroka in Nkangala.
▪ In relation to the number of informal settlements Nkanagla region had 46 informal settlements and 38 130 households, Gert Sibande had 65 informal settlements and 34 727 households while Ehlanzenui had 13 informal settlements and 5 151 households. Overall, there were 124 informal settlements with 78 008 households. The province had received money to help with the eradication of informal settlements and a provincial Bill would be tabled before cabinet on the Eradication of Informal Settlements.
▪ Adverts had been placed in newspapers and with local radio stations inviting beneficiaries to a meeting but through an order of the court those that had failed to attend the meeting had been deregistered. The list of beneficiaries approved for deregistration was submitted to the office of the Registrar of Deeds for cancellation.
▪ On the question of the role of Mpumalanga Housing Finance Cooperation, the Company had been dissolved and its role taken over by the Mpumalanga Economic Growth Agency (MEGA) and the company together with the Department was charged with overseeing housing matters.
▪ On expenditure for disasters, R5 869 302.47 was spent. All the five local municipalities in the Ehlanzeni District

were affected by another disaster in January which saw 284 houses damaged and a budget of R18,4 million had been set aside to address that. 

The Department handed over to the Committee a report explaining how they had responded to a controversial piece of land which had made headlines in Ermelo a few week previously.

Discussion
Ms Sosibo asked what the Department’s plans were on the two beneficiaries who could not obtain houses from the Burn Stone Housing Development project.

Mr Dube replied that two sites had been provided by the municipality to build for the two people.

Ms Dlakude welcomed the presentation and the fact that they had provided a report on the controversial piece of land in Ermelo. When would the province have permanent candidates employed at Districts?

Mr Dube replied that the matter had been a concern even with the Auditor-General and submissions had been made to Cabinet so that the acting staff could be made permanent.

Ms Borman asked what professional had come from Cuba. She asked if the remaining money allocated for addressing disasters would be enough to finish all the projects.

Mr Dube replied that all Cuban professional were engineers and each district had received three.

Mr Bhoola praised the Department for the Burn Stone project. Was the compilation of the needs with regards to the beneficiary list synchronised and was there necessary support to build homes?

Ms N Mnisi (ANC) thanked the province for a comprehensive report. The report had listed only two blocked projects when in Carolina in Albert Luthuli Municipality there were over 100 units that were unfinished since 1994. She appreciated the upgrading of hostels in Ligwa. There was no mention of NHBRC despite shoddy houses being identified. She hoped that the Cuban professionals would add value to the provinces.

Mr Dube said Cabinet had taken a decision that the Department must complete all unfinished projects in Carolina. Three independent service providers had been appointed and allocated 100 units each to verify the status of the projects, verify the beneficiary and make recommendations. Three legal firms had been tasked with the role and a preliminary report had been submitted already.

Ms Duncan asked if Mpumalanga had a Spatial Development Framework

Mr Dube said the province had a Spatial Development Framework that had been configured in line with those of municipalities.

The Chairperson asked the total cost of the rectification programme and what was the province doing about backyard dwellers in Esakhile. She fully supported the Informal Settlement Upgrading Bill but asked how the province would formulate the Bill without a housing policy. What were the functions of MEGA and how was it related to the Housing Development Agency (HDA) and what were the cost implications of the agency? Why was the court order in “Mansulu” not yet implemented? What was the budget of farm worker programmes? What was the Department doing about the overcrowded houses in Maraphong? When would the “China Company” building houses finish the project? Did the Department interact with the Department of Public Works in solving problems identified by the Committee, especially the one hostel that had no lighting and the washed away bridges at Bushbuckridge? What was the status with the District Management Area (DMA). issue?

Mr Dube replied that a report on the Chinese project could not be compiled because the Mayor had passed on but the issue was being attended to. The Department had a viable relationship with NHBRC and before the Bill was formulated the Department had a standard by-law for the eradication of informal settlements in all municipalities but it had its own limitations. MEGA fell under the Department’s sister Economic Department and it was not related to HAD. Upon MEGA’s formation all pieces of land that were under MHFC were transferred to the relevant municipalities. The budget for the farm workers programme would be submitted to the Committee. The province was working on the backyard dwellers problem and hoped to address that through the Bill it had tabled.

The Chairperson said that the Committee would visit Mpumalanga to verify if the Department had addressed the matters raised.

Mr Peter Nyoni, Director: Urban Renewal, Social and Rental ­Housing, Mpumalanga Provincial Department of Human Settlements, said a technical team had been sent to Simile Hostel to assess the situation and a report had been produced on the matter. A request had been sent to Cabinet to authorise the province to intervene as it had earlier refused that the hostels be converted into residential units. At Emzinoni Hostel, the province initiated a socio-economic survey which revealed that only 3% of the community qualified to occupy the units. The Department had no policy on backyard dwellers.

Mr Mokgalapa asked the reason for Cabinet not to convert hostels into rental units.

Mr Dube said the Department would resubmit a request to Cabinet to allow it to upgrade the hostels.

The Chairperson said that the Department must allocate the rentals to people who were gainfully employed and should find alternative housing for those who could not afford to rent.

The meeting was adjourned.