KwaZulu-Natal oversight visit: Briefing by Department of Human Settlements; EThekwini Municipality on Urban Settlement Development Grant

Meeting report

Department of Human Settlements: KwaZulu-Natal presentation
Mr Elijah Cele, Acting General Manager: Department of Human Settlements: KwaZulu-Natal, reported back on progress made to address challenges observed during the oversight visit by the Portfolio Committee to various human settlements projects from 27 February 2011 to 4 March 2011. The following district municipalities and the metro were visited:

EThekwini Metro: Cato Crest Project, Transitional Camp with mobile ablution facilities, Howel Heights, Kenedy Road Informal Settlements, KwaMashu Hostel Upgrading Project, Emtshebheni Project, Namibia Stop 8 Peoples Housing Process (PHP) Project, and a meeting with leaders of Abahlali Basemjondolo.

Sisonke District Municipality: Riverside Project, Clysdale Project (PHP).

Umgungundlovu District Municipality: Imbali 1 – Ward 19, Imbali Unit 13 – Phase 4, Meeting with Registrar of Deeds, Tamboville North East Sector, Impumelelo, France-Ward 13, Oribi.

Uthukela District Municipality: St Chads Project, Section E Slum Clearance, Thembalihle Disaster Project.

Amajuba District Municipality: Strijbank blocked project, KwaMathukuza Project.

Progress related to the various projects was outlined (see presentation).

Referring to land mobilisation, the Department reported that a number of projects had stalled due to land claims and land issues. The draft Memorandum of Understanding between the Housing Development Agency and the Department had been drawn up and a final agreement would be signed by the end of August 2012.  Engagement with the Department of Rural Development and Land Reform on releasing state land was continuing, and the process of negotiating the purchase of land from private land owners in Emnambithi for human settlement was underway. The Department of Rural Development and Land Reform had signed a Development Rights Agreement with Edumbe Municipality for human settlements projects and there were currently three potential projects in the pipeline for the next financial year.

The Department had identified some disaster management backlogs from previous years. There was a need for dedicated funding to clear the backlogs, as KwaZulu-Natal was the most disaster prone area in the country. Competing demands on the budget had left little funding to address the disasters. Contractors to deal with disasters had been appointed for the next two years.

The Department was part of the contract management pilot run by the Provincial Treasury to enhance capacity for managing Implementing Agents’ (IA) performance.  There had been an increased number of breaches and dismissals of IAs in the past year. The number of arbitration and court cases had also increased significantly.  Newly-employed quality assurance Inspectors had placed more emphasis on the quality of houses delivered. The Department had worked hard on managing the project timelines, such as planning (6 months) and project construction (based on 40 units per month).  Time frames for project implementation were clearly spelt out in the contracts, and all IA’s were held accountable.  

There had been challenges generally regarding the issue of hostels. The Community Residential Units (CRU) model had been identified as the most expensive, non-cost effective, model for the provision of low-cost rental houses, and this was reflected in the low recovery of rentals.  eThekwini, with the largest number of hostels, had now acknowledged the problem and a two-day turnaround strategy workshop had been held on 4 and 5 June 2012. The department was currently working with the Mtshezi (Ikhwezi Hostel) and Mvoti ( Nhlalakahle Hostel).

The Department reported that it had established a monitoring and evaluation unit that worked very closely with the national monitoring and evaluation unit. The monitoring process had been strengthened across the department for each district and a reporting framework had been developed.  All districts were reporting on an on-going basis. The performance monitoring process had been enhanced internally and had assisted in the identification of the challenges and weaknesses. Reporting by municipalities was still a problem, but the establishment of district offices had also been aimed at providing capacity to municipalities.

Discussion
Mr S Mokgalapa (DA) observed that most of the projects did not have time frames.

Ms M Borman (ANC) also observed that there were no timelines in the presentation.

Mr Cele replied that the Department noted this and would go back and look at where time frames could be added, though some of the time frames had been mentioned in the presentation.

The Chairperson observed that the province had been allocating contracts to the same contractor -- as much as four contracts in some instances. Had this been addressed?

Mr Mduduzi Zungu, Chief Operating Officer; Department of Human Settlements: KwaZulu-Natal, replied that implementing agents had been bidding for projects and banking them. Due to improvements in Monitoring and Evaluation (M & E), this had been spotted and the necessary steps taken. The districts, and not the province, appointed implementing agents, but the province had alerted the districts using the M & E on Implementing Agents who had outstanding projects. 

The Chairperson asked what was happening with the 5 000 sites allocated to military veterans.

Mr Cele replied that the issue of military veterans was a sensitive one which had been escalated to the level of the Premier and MEC. There was a programme of 5 000 subsidies initiated that had been approved. The pilot was supposed to have started in EThekwini Metro and Umgungundlovu. The military veterans had indicated that they wanted play a part in the building of their houses. The Department had interpreted this as falling in the category of the Peoples Housing Project (PHP). There was a little bit of a dispute over the terminology as the veterans wanted property loan stock (PLS) and not PHP. The other issue was a procurement issue, where the military veterans association had proposed a company to be appointed by the Department. The Department had said that this would contravene the Public Finance Management Act (PFMA) and procurement processes.  The military veterans had then said they would raise the matter at a political level. The subsidies which had been approved were going to be implemented in stages. The Department was at a stage where engagements were being conducted with government at a higher level.

The Chairperson asked why ownership of some houses had not been transferred, even after 13 years.

Mr Zungu replied that Incotshane transfers had not been made because there had been a land and mineral rights issue. The developer had left, but the municipality was trying to get a land expert to separate the two.

Mr K Sithole (IFP) pointed out that the issue of hostels was concerning. There were hygiene concerns.

 
The Chairperson stated that the Department was working in silos. The Department should work with the Deeds Office to issue people deeds on time.

eThekwini Municipality Presentation on Urban Settlement Development Grant
Mr Ken Breetzke, Strategic Executive; eThekwini Municipality, presented the situation regarding basic services, infrastructure backlogs and time frames.

Housing was at 58% coverage, with a backlog at 30 June of 410 000 houses.  The timeframe to address this backlog, based on current funding/ delivery levels, was between 40 and 80 years.  

Water was at 92% coverage, with a backlog of 74 000 households.   The timeframe to address this backlog, based on current funding/ delivery levels, was 37 years.

Sanitation was at 75% coverage, with a backlog of 231 000 houses.  The timeframe to address this backlog, based on current funding/ delivery levels, was between 13 and 25 years

Lastly, electricity was at 65% coverage, with a backlog of 323 000 houses.  The timeframe to address this backlog, based on current funding/ delivery levels, was 40 years

The Committee was informed that key to the development agenda would be the servicing of informal settlements as quickly as possible, using well located land for higher intensity use and intensification of nodes/urban centres and corridor segments.  Also important was the provision of efficient public transport between the main sending and attracting nodes, promoting regional integration where warranted, and switching to information technology networks to reduce the need for physical movement.

The Urban Settlement Development Grant (USDG) total expenditure for 2011-12 was R1 056 595 000, which had impacted on 231 586 households.  This was spread across the formal housing sector, basic community services, and bulk and connector infrastructure.  The USDG proposed expenditure for 2012-13 was R1 278 400 000, with an expected total impact on 321 400 households (see presentation). 

Discussion
Mr Mokgalapa asked how the city was dealing with corruption in housing

Mr Sbu Sithole, City Manager; eThekwini Municipality, replied that no stone was left unturned when addressing the issue of corruption. The report raised by the AG had pointed to irregular spending of R1,3 billion in the last financial year and half of this had emanated from housing. The municipality had taken a no-tolerance approach to non-compliance, both from the political side and administratively. Officials were responding positively and this would be shown in the drastic reduction in irregular spending in the 2011/12 financial year. Disciplinary processes had been taken against all the officials implicated.

Ms Borman stated that the backlog in housing was distressful. What was the city doing about this?

Mr Sithole replied that the city had noted the backlog. There were about 410 informal settlements but efforts were being made to speed up service delivery.

Ms Borman pointed out that it was sad to hear a report that ablution blocks were held up in storage when people needed these facilities.

Ms Borman observed that the lack of services such as clinics should not be used as an excuse for the non-occupation of completed houses in Cornubia.  In the interim, the department should make provision with other departments and provide mobile services.

Ms J Sosibo (ANC) stated that the Committee had been impressed with the quality of the ablution blocks. The city should keep this up.

Mr R Bhoola (MF) stated that other departments should be included to address social services so that the USDG could be used for houses.

The Chairperson observed that the municipality was not spending the Municipal Infrastructure Grant. Therefore there was money available for bulk infrastructure.

Mr Mokgalapa stated that the municipality needed to spend on basic services, as had been indicted in the quality of life survey findings. The municipality needed to prioritise and not use the issue of money as an excuse.

Ms Sosibo observed that there was no information provided on housing in rural areas. Was there housing being provided in rural areas?

Ms Borman asked about the number of houses yet to be built in Cato Crest.  She pointed out that there was corruption with housing beneficiary lists. What was the criterion for beneficiary lists?

Ms Borman asked the municipality if they knew how many people needed RDP houses, rental houses and statistics on other services.  Was the municipality aware of the needs of the community?

Mr Bhoola asked if there was synchronisation of policy between local and provincial government, and whether the Department could elaborate on the R87, 000 subsidy.  The Department should work with Home Affairs so that they could give people identity cards in order for them to qualify for houses. He asked if there were any other subsidies, besides the USDG.

Ms M Njobe (COPE) asked if there were any plans to put up toilets in rural areas.  Why were there complaints about lack of money when rollovers were being experienced?  She asked how long the disaster backlog was, and what the time frames were.

The Chairperson asked if houses had been built recently without the consent of the National Home Builders Registration Council (NHBRC).  She observed that the department had stated that a service level agreement had been signed with NHBRC for rectification. If this was the case, the contract should be cancelled because they had been legislated for quality assurance.  Who was responsible for the assessments?  Several rounds of assessments were a waste of time. A decision should be made on whether to rectify or demolish.

The Chairperson asked what the position was with regards to engineers, as previously it had been reported that there were only 11.

Owing to time constraints, the Department and Municipality were asked to respond in writing on unanswered questions to the Committee.

The meeting was adjourned.