Dolomite problem; Urban Settlement Development Grant: Nelson Mandela & Buffalo City Metros progress reports

Meeting report

Opening remarks
The Chairperson remarked Eastern Cape province had been invited to the meeting as it was revealed at the 13 February meeting that the province was far from achieving the required 50% expenditure by the end of the second quarter. It would have been unfair for the Eastern Cape to wait for another meeting with all other provinces against the background that Eastern Cape had conceded to DHS that it would not be able to spend the remaining allocation. The meeting with the province had to be fast tracked.

The Chairperson said the MEC for Human Settlements in the Eastern Cape had been invited to the meeting following the province's inability to spend in the third quarter. It was revealed last week the Eastern Cape was far away from 50% expenditure by the end of the second quarter.

The Chairperson said provinces committed themselves on 13 February to recovery plans. The Committee was perturbed when no progress was reported. About R3.2 billion had not been spent, and was with the provinces. However, the last allocation for the year was still with the National Department of Human Settlement (NDHS). The Committee supported this move, especially in light of provinces’ inability to explain how the money would be spent. Provinces could not indicate clearly, during the recovery plan presentations, areas that the money would be spent on. The Committee therefore requested DHS to undertake provincial visits to verify expenditure and how the remaining budget would be used.

It would have been unfair for the Eastern Cape to wait for another meeting with all other provinces against the background that it had conceded to DHS that it would not be able to spend the remaining allocation. The meeting with the province had to be fast tracked.

There were also progress reports from the two Metros – Buffalo City and Nelson Mandela Bay - in the Eastern Cape. This was a follow up to the 19 September 2012 meeting where the Committee voiced concerns about their under-expenditure of the Urban Settlements Development Grant (USDG). DHS had committed to assisting the two Metros to improve their spending.

The Committee had discovered challenges during oversight visits that included houses constructed on dolomitic or inhabitable areas. However, some provinces and municipalities abused this condition, because they would simply not build houses using the claim that sites were dolomitic. When these claims of dolomitic sites were followed up, it was found that dolomite was not a challenge in many areas. Geo-tech reports gave conflicting information, hence the importance of engaging professionals in the field. Members were not empowered to argue on the issue of dolomite.

The Dolomite Problem : Council for Geoscience presentation
Mr Frederik Stapelberg, Engineering Geologist, Western Cape: Council for Geoscience, said dolomite was a problem mainly in three provinces – Gauteng, North West and Mpumalanga. Dolomitic land caused the sinkholes. The condition had existed for about 50 years, and the sinkholes could be fairly large.

He explained that dolomitic rock was soluble in acidic environments. When carbon dioxide (CO2) combined with ground water it resulted in a weak underground soil structure. The dolomite rock weathered into a cavity, and those cavities had been formed many million years ago. These were filled with soil; they were fairly stable until a certain event took place.

Mr Stapelberg said the events related to human settlements, and mining. Mining induced dolomitic sinkholes which were common in the Witwatersrand (Gauteng) area due to its history of mining. To make mining possible in that region, the water table had to be lowered. When that was done, it created an empty gap between the soil and the lowered water table. Sinkhole occurrences just needed a trigger, and it occurred when underground erosion and surface pressure happened. Soil was eroded into the cavities that had developed through the years. This was how sinkholes were caused.

About 25% of Gauteng was underlined by dolomite. Areas south to Pretoria, south of Johannesburg and to the western areas of the province were highly susceptible to sinkholes. The three areas were where massive gold mining occurred. When there was no human settlement, there was no trigger for sinkholes to manifest.

It was important to assess the scale of the problem, and depending on the stability assessment, one could then decide on the kind of settlement that could take place. The bigger the sinkholes that could occur, the higher the social class that could afford to settle there. The more densely populated the area, the greater the chance of sinkholes occurring.

The condition could be prevented by township developers. All they needed to do was to appoint a competent person – either an engineering geologist or a civil engineer - to thoroughly inspect development sites. The Council for Geoscience could conduct stability assessment by conducting a gravity survey. This informed one if the soil underneath was dense or not, or if there was a void. The process of surveying included proper drilling.

After development on a dolomitic site, one had to guard against storm water. Pipes should be inspected regularly and ensured they did not leak. One could put in a rough foundation. Council for Geoscience had a data bank of dolomitic conditions (that could be accessed by anyone). Dolomite could cause deaths, and about 39 deaths had been reported since the sinkholes were first discovered in SA.

Discussion
Mr S Mokgalapa (DA) commented that Gauteng was challenged with this condition especially since it was the most densely populated province and yet with the smallest geographical surface. This meant more projects, in terms of the Breaking New Ground project, were found in dolomitic areas. He asked if any one of the stakeholders - Council for Geoscience, the National Home Builders Registration Council (NHBRC) and municipalities – could be held responsible for construction on dolomitic sites.

Mr Stapelberg replied the municipality was responsible, as all municipalities were responsible for developments in their territories.

Ms G Borman (ANC) sought clarity on whether the assumption was that human settlements could be built on areas known for dolomitic activity. She asked if it was advisable that development happen at all on dolomitic sites. The presentation did not specify what should happen.

Mr Stapelberg replied it should not but if a quarter of a province was situated in a dolomitic area something had to be done. This was what had been happening over the years especially if one made the necessary precautions. He cited the example of Centurion in Pretoria that was built on dolomitic land. The foundations were expensive but it could be done.

Ms Borman asked if municipalities made use of the Council for Geosciences expertise, or whether they relied on their own surveys.

Mr Stapelberg replied the Council gave technical advice to municipalities on reports prepared by professionals. Whether those were implemented, that was up to government to monitor. He had no particulars as the Pretoria office of the Council dealt with all of this information.

Mr Anton Arendse, DHS: Human Settlements Planning, commented the presentation was useful and empowering to the Members. The hidden cost incurred when needing to build on dolomitic land accounted for some portion of the budgets in North West and Gauteng. Gauteng and North West land was costly, and confirmed the need to use land effectively and efficiently. He requested that a comparison, by way of monetary figures, be made of a normal foundation as opposed to a rough foundation. This would give Members an indication of cost escalations when building on dolomitic land.

Mr Stapelberg said the difference between a normal and a rough foundation was that on a normal foundation one had to dig a trench and put in concrete. A rough foundation covered the entirety of the house and should have steel ring-fencing underneath. This could only be done by a competent engineering professional. He could not give monetary figures for the different foundations as that depended on a variety of issues like the size of the sinkholes and the house.

Mr Arendse commented there always would be engineering solutions around challenges. At some point government would have to look into the engineering solutions. He cited the example of Cape Town having to construct houses below the flood line and thereby experiencing flooding during the winter months. Land would be at such a premium that government would have to resort to engineering solutions and build in these no-go areas.

Mr Stapelberg agreed, saying land had to be used efficiently.

Mr Caster Sharpey, Eastern Cape Human Settlements Head of Department (HOD), commented that engineers they employed tended to over-design foundations. He asked if the Council of Geoscience could assist in developing national standards for foundations. Professionals were just protecting themselves because of the comeback of rectification.

Mr Stapelberg replied that for the professionals engaged in examining dolomitic land, there were regulations that guided their function. Also, there were South African standards on when to deal with dolomite. Professionals sometimes over-designed to protect themselves. If one was not happy with the price for foundations, one could always go to the next one. Engineering professionals had to walk a tight line. If structures collapsed as a result of cheap foundations, clients would walk away. And if one over-designed, clients would run away as a result of the excessive upfront payment.

Ms Funani Mahlatsi, DHS Chief Financial Officer, said the dolomite situation was a lesson for DHS. A lot of thought was needed on how to avoid dolomitic areas. Another issue to ponder was motivating for extra funds from National Treasury, for purposes of constructing on dolomitic land.

The Chairperson retorted and said motivating to National Treasury was DHS’s mandate. The Department was the one who motivated for the budget, and also Human Settlements was part of the Presidential Infrastructure Coordinating Council (PICC). Approaching National Treasury was solely dependent on how far the Department hoped to address the challenge posed by dolomitic sites. All DHS needed was to prepare a thorough motivation with detailed content.

Ms Mahlatsi asked how could ordinary people, especially those whose properties were on dolomitic sites, be comforted and reassured.

Mr Stapelberg replied that comforting those owning properties in dolomitic areas was difficult. There were ways in which people could look at the problem; people needed to be vigilant and should report incidents and signs early on that sinkholes could occur. It was also important to warn people about trigging mechanisms such as leaking water pipes and leaking gutters. People should know what to look out for so that if the problem occurred they could lessen the possibility. Stability investigations could also be done for people in open areas, but there was cost involved. Comforting was a problem.

Eastern Cape Human Settlements MEC comments
Ms Helen Sauls-August, Eastern Cape Human Settlements MEC, said it was disturbing that no “political principal” from the Nelson Mandela Bay Metro (NMBM) attended the meeting. NMBM was going through a process of evolution slowly, and had just appointed a Municipal Manager. They were still without an Executive Director for Human Settlements. The vacancy had existed for overfour4 years. The Metro was still without a CFO. The Acting CFO could only do administrative duties. The Metro was still without an Executive for Infrastructure. Any department of human settlements could not operate without these three critical positions. Hopefully these would be priority projects at the municipality when the new Municipal Manager was appointed.

Challenges, as described last year to the Committee, had not abated. NMBM had listened to the advice about how the municipality should spend the USDG. There had been a shift from the tendency of spending the USDG where it needed not be spent. The Metro had increased expenditure but not to where it should be. NMBM was second to Buffalo City in terms of informal settlements. This was one of the challenges, hence the insistence from province to focus the USDG on eradication of informal settlements.

MEC Sauls said there were challenges when the Municipal Infrastructure Grant (MIG) was shifted to USDG; there were ongoing multi-year projects. Advice was given to the Metro that its spend should focus on a few big areas, so that the intervention could make a difference. An effort that was scattered in approach would not really change the situation. The Metro remained the highest in the use of the bucket system.

The Metro, like Buffalo City Metro (BCM), was exploding with informal settlements and illegal occupation of land. The Metro was challenged in this aspect - as the more it built houses, the more people moved into the informal settlements. Illegal occupation of land was also exacerbated by foreigners flocking into the Eastern Cape in search of economic opportunities. NMBM, being the economic hub for the province, made it exciting for people to be there.

MEC Sauls said the province had put it to the Minister-MECs Meeting (MinMec) that where there had been expenditure challenges with the USDG for the two metros, the money should be used for other municipalities with serious bulk infrastructure challenges. This was not to mean that the two metros did not need the USDG; the Eastern Cape as whole was currently dealing with backlogs. The two metros needed the USDG but also they needed to channel it into the right direction.

She believed that NMBM could get out of the situation it was in. The province could not force them but could only advise.

Nelson Mandela Bay Metro (NMBM) progress report
Mr Joseph Tsatsire, NMBM Assistant Director: Planning and Development, said the presentation was a progress report on the NMBM’s expenditure of the USDG, and performance as of 31 January 2013. Half a billion rand was allocated for the USDG. The money was spent on four main areas: informal settlements upgrading, land acquisition, backlogs, and storm water management. R20 million had been earmarked for a privately owned piece of land in the Walmer area. The intention would be to move about 2 500 families currently condensed in an informal settlement.

Expenditure was at 25% at the end of December 2012, and there were various call centres that monitored the performance. Human settlements had been allocated R165 million; infrastructure engineering had spent R134 million (about 62% of the overall allocation); and infrastructure and water services. All the programmes sought to provide bulk reticulation services for the Metro to be able to unlock human settlements for upgrading of informal settlements. Reasons for the delayed cash flow included: delays in appointment of contractors, delays in Environmental Impact Assessments (EIAs), outstanding payments to contractors, a national response to business plans for eradication of the bucket system was awaited, and internal supply chain difficulties.

The challenge with the approval of the EIA was for the placing of electrical and water infrastructure for the additional township sites. Approval had been granted now and the contractor was expected to start buying the mechanical equipment. Outstanding payments to contractors had been addressed and would be reflected in the third quarter performance.

The MEC had highlighted the need for the Metro to eradicate the bucket system. Up to the meeting, the challenge had been dealt with through the informal settlement eradication programme. It was apparent that these could not be eradicated completely and therefore an improved strategy was required to address the challenge. The Council also considered alternative sanitation systems to be able to deal with those informal settlements on the bucket system.

He said there were internal supply chain difficulties but they were being attended to. The Metro had a more linear process that dealt with procurement on all issues related to informal settlements upgrading. To turn this around R20 million, as already stated, had been committed to Walmer.

Mr Tsatsire said there were contractors on site currently doing work on human settlements projects. Most of these were in-situ projects that the Metro would provide with permanent water and sewer connections, and eventually a permanent top structure would be built to connect the people. There were monthly progress meetings to monitor cash flows on all running projects. This was where expenditure opportunities were identified and hopefully spending would improve for the third quarter.

The Metro had agreed that the only strategy for the eradication of the bucket system was to construct houses, and in the meantime provide temporary water and sanitation for these informal dwellings. This financial year 2456 sites had been delivered; the target for the end of the fourth quarter (June 2013) was 4 000. All these serviced sites were in informal settlements where people should be able to be given these connections. The Metro should be able to meet this target. Up to the end of January 2013 there had been a slight improvement of 41%, and hopefully at the end of the fourth quarter this would have increased.

Most of the projects where the USDG was being spent on, actually addressed human settlements. The Metro had appointed agents to develop social housing on its behalf. The institutions were involved in doing preparatory work, like identifying pieces of land and doing planning work. Four pieces of land had been identified currently.

Mr Tsatsire said there were challenges around the four pieces despite being well located in terms of access to economic opportunities. The Metro had to deal with resistance from communities who relied on the EIA process to frustrate the delivery process. There was a public hearing proces, and people used that platform, especially the inner city and well built communities. The communities were concerned with the value of their properties going down.

Bulk infrastructure and sanitation would be provided. Water had been installed and the Metro was busy with internal reticulation of those taps. He said 400 sites at the Greenfield project had been serviced and would be handed over for the construction of housing. Other projects that were currently being implemented included Joe Slovo (Uitenhage); Wells Estate; Khayamnandi Extension; Missionvale Garden Lots; Motherwell NU 29; Rosedale; Land Acquisition and Kwanontshinga. These projects were at different phases of development from the EIA stage to the actual construction.

As a result of the in-situ water supply in the system there had to be upgrading of the bulk water and sewer treatment plants. Rehabilitation and mechanical work was being done to supplement the additional capacity into the system. This applied to sanitation services where capacity was being increased in some of the projects.

Discussion
Mr M Matshoba (ANC) voice dissatisfaction with the presentation and wanted to know how long the presenter had been in the employ of the Metro. It appeared something was not going well somewhere. He commented that when the Committee visited some of the projects – especially Fisher’s Corner - the previous year, they were at the EIA stage. And yet the presenter still indicated the same project was at the EIA stage. What was going on there? It would appear the presenter did not even know where the project was.

Mr Matshoba sought clarity on the statement that "communities resisted the developments". He asked what that meant.

Mr S Mokgalapa (DA) commented that the MEC needed to be firm handed when dealing with the two Metros, even if it meant to risk infuriating “political principals”. To come and indicate that one could not force the Metros was unacceptable, especially against the constitutional obligations accorded to someone occupying the MEC’s position.

Mr Mokgalapa commented that the presentation was nothing new from what the Committee saw last year. The NMBM should be under administration; there was nothing happening there and governance had collapsed; political wrangling was the order of the day. Most of the projects were ongoing and some had unachievable targets. This made him wonder why the municipalities were being accredited if they lacked capacity. They were accredited and could not perform the basic functions in line with their status of being accredited – fast-tracking delivery.

Ms Nokuthula Tetyana, NMBM Director: Human Settlements Delivery, replied the Metro was struggling to stabilise itself. There was related to supply chain management processes taking longer than expected. Often supply chain processes were changed and contracts lapsed and as a result tender processes had to start afresh. The report should give comfort, in that the infighting stage had been passed.

Mr Mokgalapa said he would not even address the issue of people in 'acting' capacities, as the Eastern Cape appeared to be over-taking national government in Pretoria, with the highest number of acting positions in the public sector. For four years, senior management positions had not been filled; this was a joke. There was no Chief Financial Officer (CFO) for four years; this was a critical position, the one that needed to ensure that the Metro functioned well and budgets were spent adequately. This was clearly the reason why the province had “high level corruption”.

Mr Mokgalapa sought clarity on the reason the province always had challenges in appointing contractors, if not the communities would be opposed to projects. It was not correct that every project had to be blocked because of irregular appointment of contractors or some community unhappiness.

Mr Mokgalapa said the province was building backwards. There was nothing new being built; the province was on the rectification mode. If the Metros struggled with constructing basic things such as providing bulk infrastructure, what was the scenario like at the small municipalities? This begged the question: what was essentially the challenge in the province?

Ms M Njobe (Cope) wanted to know why the province lacked planning on time. The Metro had spent very little although the financial year was coming to an end. Why was this happening because the Metro had been in existence for so many years? If this was a challenge of planning, why not plan on time so that when time to spend came, one just implemented. The Committee could not overemphasise the importance of delivery. People had vented their anger, and yet that seemed not to push the municipality.

Ms Njobe said there surely were ways that could be employed to convince people when they resisted development. All that was needed was to ensure that officials persuaded community members so that there was progress. It was not correct to not do anything, just because people protested.

Ms Njobe commented that a lot of contracts were still at tender stage this late into the financial year. This situation made one wonder about the amount of work done to ensure that these projects were implemented by now, as opposed to being only tendered. This did not look good at all, people waited for delivery. The work was happening slowly at the province while funds were being unused. She asked if the challenge related to capacity or unwillingness to execute delivery.

Mr K Sithole (IFP) commented that nothing was happening in the province. Although Parliament had always made it clear that sanitation must be a priority, nothing convincing was being said about the programme in the Metro. The appointment of officials in acting capacities was a challenge in the Metro.

Ms G Borman (ANC) commented that the questions had been adequately asked. Underspending was a big worry, against the background of people in need of these services. Delivery protests were around non-provision of services. Why was the money not being spent? Could the delegation tell the Committee why it was not spending the money? A lot of projects were still in the pipeline.

Ms Borman asked what was done regarding the gap market. How was the Metro hoping to go about helping gap market, especially the Finance-Linked Individual Subsidy Programme (FLISP).

Ms Borman commented that the rectification programme in the Metro appeared to be progressing slowly. She asked what Rectification was producing; and how was that being addressed?

Ms Borman commented that the vacancy rate at the Metro was another serious issue. There could be the best plans for projects but if positions were not filled, nothing would become of them. The Committee needed to recommend that something be done about vacancies at NMBM. She sought clarity on "temporary connections" if there was money to put into infrastructure.

Mr Martin said the Metro had just appointed a Municipal Manager, and one of the first tasks would be to appoint the senior managers for the executive.

Ms Borman commented that the expenditure of the Rural Housing Infrastructure Grant by the province, currently at 7%, was concerning.

Mr Martin replied the Metro was committed to spending all of its allocation of the USDG. The Metro’s engineering and human settlements unit had previously been able to spend 95% of its budget. Looking at the plans and cash flows that had been produced, the Metro believed this year would be no different in terms of expenditure.

Mr Calvin Brunner, NMBM Director: Development Support, replied that although last year the Metro had set its sights on the target of over 3 000 serviced sites for the financial year, it had only managed just over 2 400. But this year this number had already been passed. The life cycle for projects was not one-year, but three. A lot of planning and effort went into ensuring that projects were rolled out. Delivery in terms of human settlements was starting to happen, contractors were on site. Challenges were dealt with.

Ms P Duncan (DA) commented that the Integrated Development Plans (IDPs) and the Spatial Development Frameworks (SDFs) of the Metro certainly needed upgrading. The Metro still relied on 2009 SDFs. The public needed to be engaged, and the new SDFs that dealt with the period 2011-2016 should be used.

Mr Brunner replied that the SDFs were updated regularly, and at the moment the Metro had 7 approved SDFs and 4 outstanding. The IDP was updated internally and the Metro had dealt with that regularly.

Ms Duncan sought clarity on the statement that the Metro was negotiating land acquisition with private owners. She asked what kind of relationship was there with the Housing Development Agency especially regarding land acquisition.

The Chairperson said the Committee had requested a land audit for the Metro, in order to understand the size of land available for use by the Municipality. This audit needed to include the land that already had properties. But this exercise somehow appeared very difficult for the Metro to undertake.

Ms Tetyana replied the land audit was receiving the attention of the Metro. This had been identified as one area that the Metro was weak on and needed to improve. A report would be submitted to the MEC on this aspect in three months' time; a service provider had been appointed for this purpose.

Ms J Sosibo (ANC) commented that it did not sit well that some people in the Metro still used the bucket system, 19 years since the advent of democratic government. This could only be happening because officials were not the ones using the bucket system. When would the Metro eradicate the bucket system and not talk about it anymore?

She commented that people in acting capacities exercised little due diligence as there could be no accountability condition applicable to the position. Why did it take so long to fill the posts? Was it because of money or the officials responsible for filling the positions?

Ms Sosibo sought clarity on security measures installed at sites once they had been cleared. If there were none, it only meant the phenomenon of informal settlements could never be defeated. People just moved back and forth without any hindrance to these sites; even those who got houses were sub-letting their properties and returning to the informal settlements.

The Chairperson said the reason people opted for informal settlements was being encouraged by municipalities. Municipalities prepared land and left it unattended. The Committee should look at the role of Government in encouraging land invasion; officials needed to do introspection. Lenasia was a case in point where human settlement land was left unattended for years.

Ms Tetyana replied there was also an element of poverty in the issue of land invasion. When people were provided with houses they sub-let their houses so as to generate some form of income, and went back to the informal settlements. This situation gave the municipality bad publicity, especially when it wanted to enforce the Prevention of Illegal Eviction and Unlawful Occupation of Land (PIE) Act. Before the Act was passed, the municipality would have gone in and demolished shack structures, but with the PIE Act, some caution had to be exercised.

The Chairperson interjected that the statement was not entirely correct. NMBM did not implement the PIE Act correctly. The Act strengthened the implementation of the work of the Metro. When informal structures popped up, municipalities needed to demolish them immediately, and the Committee supported that. But when such structures were allowed to stand for years, then municipalities could not just come and demolish them. She requested the presenter desist from using the PIE Act as an excuse for something that the Metro failed to do.

The Chairperson sought clarity on the statement by the Metro that it had internal supply chain challenges. What were the problems? The Department of Human Settlements (DHS) had said it awaited response from the Metro in terms of plans to eradicate the bucket system. What was it that the Metro needed from the Department, if it could not assist DHS get rid of the bucket system?

The Chairperson said Government work needed to flow; if planning happened last year, that need not be the case the following year. The flow was crucial, in that it would make oversight easy. There was an agency that was mandated to do land negotiations on behalf of Government. The Metro would forever be negotiating. She asked if the Metro understood the role of the Housing Development Agency (HDA)? She sought clarity on how far the process of getting land at Grogro was.

Mr Brunner replied the Grogro project had to be planned again. The project was re-planned and the Metro came to the Committee with a four year programme for relocating the people of Grogro, but the Committee was not impressed. The Metro had started with the N2 development. There was a programme but it was not visible enough and hence it was omitted from the presentation. The EIA process had been started to get the project approved. Relocating the families would happen over four years subject to the approval, but the Metro hoped the process would be finalised in a shorter period of time. Further information on the project, and status report could be given to the Committee.

The Chairperson said the lack of progress at Fisher’s Corner was as a result of the Metro’s attitude. The Metro had an attitude; it did not want to help the people of Fisher’s Corner. In 2009 already, the Committee was told those people would be moved into an area that had already been identified. Today the Committee was told that the process was still at the EIA stage; the Metro was not serious. NMBM simply did not want to build for poor people in that area; the Metro had an agenda with regards to those people. The Committee was against the Metro moving those people in that area. The land was being reserved for certain individuals. the land was bought by Government through Thubelisha.

Mr Brunner replied the relocation of informal settlements was the last resort, but had to happen when people lived on cemetery sites, where there were power lines, or on sites that could not be developed. Fishers Corner had been planned to relocate to St Albans, but that did not come to fruition. The Metro did not get a final approval that could allow it to deliver. The plan was changed and the process to relocate the families to Witteklif ensued. All planning process had been done and approved but the only outstanding issue was the approval of the IRD for the bulk sewer. The Metro had to construct a batch treatment works that required a full EIA process. This was the only stumbling block, that did not allow the Metro to start construction at Fishers’ Corner. Everything had been approved.

The Chairperson said she had not even engaged on the issue of sanitation. The President had made a call on the security of tenure of township residents. How did the Metro assist the province achieve the target of 400 000 units? She pointed out some developments were not mentioned in the presentation. One such development was the Maraba project (Extension 6). She asked if people in that community still used a nearby hill to relieve themselves. It was unacceptable that people in that area would be dehumanised in such a manner while there was running water in their area. The Committee was not pleased with the report; the Metro had only spent 35% in the third quarter and yet its water and sanitation services were so horrible.

Mr Tsatsire replied nothing had been done at Maraba in terms of sanitation, but the Metro was finalising a scoping report for the EIA. A layout that could accommodate 600 people had been done.

The Chairperson said she simply wanted practical measures on where the project was and what was being done in the interim to counter people’s challenges in those areas. It was frustrating that people lost confidence in Parliament resolving their issues, and had instead trust for parliamentary arms such as the Public Protector. Parliament had an executive arm that had to deliver; what would happen to Maraba’s sanitation challenge; what would the Metro be doing after this?

Mr Martin replied the approach that the Metro had adopted was to provide sanitation in form of an integrated human settlement. The bucket was not the basic form of sanitation, and the Metro agreed. At the moment NMBM was evaluating what options there were to provide sanitation. Interim sanitation that was planned was expensive and had cost R320 million.

The Chairperson interjected and said the province was not spending money anyway, and therefore could not claim R320 million was expensive. The Metro should go back and within two weeks prepare a report on how it hoped to address the bucket system in Port Elizabeth, including the sanitation challenge of Maraba. The Committee would not tolerate anything, but delivery.

The Chairperson said it was time for the officials to realise that human settlements was one of the seven priority areas of government, and also one of the Presidential Infrastructure Coordinating Council (PICC) programmes. Apart from the land audit, she requested that the kind of budget received from the Department of Transport (DoT) be revealed, so that the Committee could understand how road infrastructure was progressing in the Metro.

The Chairperson requested that the statement: “the eradication of the bucket system through construction of affordable housing” be clarified. What did this mean? Should people be using hills until one had built affordable housing for them. She requested that officials provide focussed content when appearing before Parliament. The Committee was not impressed. She asked that the MEC clarify the recovery plans for the province. She also sought clarity on the use of the Housing Subsidy Scheme, and blocked projects.

The Chairperson commented that the Committee had requested that DHS release no other funds to the province until detailed recovery plans on how the money would be spent had been provided. The Eastern Cape had to convince the Committee that it would be able to spend the last quarter allocation from NDHS.

The Chairperson commented that Parliament spent a lot of money on oversight visits. On its return the Committee was expected to compile a report, and therefore officials had to respond to issues raised in the report. When the Committee left, it was highly expected that officials would address the challenges, otherwise if this did not happen, then officials did not take Parliament seriously. She insisted that an update on Maraba (Extension 6) be given.

Mr Mokgalapa commented that the executive authority from NMBM had to be invited in two weeks as well. The Committee must not accept delegations comprised of officials only; the executive authority should come to Parliament.

Ms Mashishi agreed and said the Parliamentary Research Unit needed to investigate the progress on these projects in the meantime and brief the Committee.

Mr Matshoba commented that he would take off the following week from his parliamentary duties, just to visit all the projects.

Ms Duncan commented that it was expensive to get officials to Cape Town. Officials needed to be thorough with their information on why operational processes were delayed. Members were not crucifying the officials, but wanted to assist with delivery.

Mr Sithole requested that DHS be given a chance to comment on the Metro’s business plan.

Ms Funani Mahlatsi, DHS CFO, commented she found it disturbing that drawing business plans was reported as a challenge by NMBM. This was raised in September of 2012; NDHS indicated that it did not want to be sitting with a bucket system challenge whilst a sanitation programme had been rolled out to deal with such issues as the bucket system. There was a recovery plan with the metros, and a strategy was put forward to NMBM. The presenter made reference to how building of houses would be geared towards addressing sanitation challenges; the two did not align. These were the kind of issues that had been raised with the Metro. There was a pending review with the municipalities but the Eastern Cape was not part of the process. DHS would sit with the Metro in the next two days, and hopefully the report they were requested to bring in two weeks time would contain some aspects of the Department’s intervention.

The Chairperson commented that the next engagement would be with the executive authority from NMBM.

Buffalo City Metro (BCM) progress report
Mr Andile Fani, BCM City Manager, commented that BCM had not had a CFO for the past four years. That had posed a number of challenges in the running of the Metro. There had been improvements at the Metro but these were not to the extent of being regarded as satisfactory. Challenges related to shortage of service providers in the area; most companies were corrupt and unable to finalise projects within the agreed time. This had been hiccups for many human settlement projects.

The challenge with contractors was that once one had terminated on account of non-delivery, the process had to re-start at the stage of advertising. After June, the Metro was considering having a database of companies, so that after termination it did not have to start at the beginning.

Mr Fani said some companies were under garnishee – a process of clearing debt. Most of these companies had cash flow challenges. Procurement had been dealt with in the Metro, but the only thing left was finalising an electronic system for procuring processes. The Metro had been a victim of EIA approval processes.

The organisation tried to ensure that it spent. This time last year expenditure was at 11%, but had since improved in this financial year to 19%. With commitments, expenditure sat at around 58%. This was not a good picture, but had contractors been able to deliver on projects, the figure would have been even better.

The Metro had taken a decision to start appointing companies that had a healthy bank balance of over R8 million, but the law required that this be done on those registering R10 million. This was a control measure -ignoring those companies that were around R8 million. This was simply to ensure that the Metro was not challenged with issues of companies with no financial muscle. A lot of design work had been done; if the Metro was required to start building even tomorrow; it would. Professional service providers had been assembled, and the construction of top structures would happen in the next financial year.

Mr Thabo Matiwane, BCM Acting Chief Operations Officer, said the USDG used a framework of performance that was consistent with the IDP, service delivery and budget implementation. The presentation also outlined the picture between this quarter and year end. It reflected what the BCM had achieved since the beginning of the financial year.

The past financial year was not particularly good for human settlements, especially as only a fraction of the allocated funds of R400 million had been used. This financial year, project pipelining had improved through the general interventions as outlined in the presentation.

Mr Matiwane said bulk water services was R1.3 billion for the next 20 years. Sadly the Metro operated a decayed infrastructure, and maintenance stood at R447 million. On sanitation, reflection was that R2.1 billion would be required for both urban and the rural hinterland of the Metro.

On electricity, non-informal dwellers linked housing delivery was estimated at one billion rand. The backlog in terms of financials was R450 million that had to be invested in provisioning of electricity. Eskom was not responsive in addressing the needs of the province.

On roads and storm water, internal streets would be studied and there would be upgrading of gravel roads. This required a total sum of R1.2 billion. Out of 166 informal settlements, backlogs were at 121 requiring R2.6 billion over the next 20 years.

Mdantsane accounted for about 82 informal settlements and 33 of these were targeted for upgrading during the current Medium Term Expenditure Framework (MTEF) period. 20 informal settlements were part of National Urban Settlements Programme (NUSP) and it would provide internal support and capacity. A meeting had taken place the previous week and there was progress in that regard.

Mr Matiwane said the 2012/13 USDG allocation for human settlements stood at 22%, and expenditure was 16.8% without commitments. Bigger allocation went to sanitation hence the bigger budget for the waste water sewer treatment.

The Metro was in the process of acquiring a piece of land from Transnet. The piece of land was crucial to the development of the CBD.

There was a challenge with awarding the Bus Rapid Transit (BRT) contract under Transport. The tender was awarded for R71 million, but the decision was contested in court. This was heard in June in Grahamstown but there had not been a judgement. The Premier’s Office had been requested to intervene and seek to expedite the release of the judgement. This had impacted on expenditure of the money that had been allocated for the BRT.

The total allocation of the budget stood at R499 million and at the end of December, 19.2% of this amount had been spent. Inability to appoint contractors that would deliver on their work contributed to these expenditure figures. This was despite the fact that contract agreements were entered into, and monitoring was happening regularly. There had been a challenge especially with those contractors who worked on serviced sites. He singled out Khulanathi Contractors, and said this company had been receiving a number of contracts. A decision was taken to terminate and that meant going back and starting the process all over again. The contractor was meant to deliver 850 sites for Mdantsane in 2011. The contractor was meant to be off site by March 2012; but by this date only 150 sites had been delivered.

It took Council a while to understand that management was terminating on the basis of non-delivery. It took ages, and management was required to submit numerous reports to explain why it had terminated. It was agreed to, and now the process to ensure there was a contractor on site was underway. The province had assisted in awarding the tender; the contractor was expected to deliver 1 000 serviced sites.

The Metro did not attract big contractors; there were small contractors that were not delivering in the province. This would take time to change. In instances where the work was not massive, companies grading under 9, in the CIDB ratings, would be considered but financial assessments would be performed.

Mr Matiwane said 1 459 units were targeted this financial year but due to the non-performance of the contractor, the Metro was falling short. Some contractors had already been appointed but there were issues with garnishee orders and cash flow challenges. One such contractor worked in Duncan Village. The company was back on site and working, but the fact that they had to be paid through a garnish, via NURCHA, resulted in challenges. There was a meeting with NURCHA the previous day to indicate the need for assistance in relation to contractors the entity lent to. An agreement had been signed in this regard.

The number of in-situ upgrades was not where it needed to be. Planning for last financial year was very ambitious. DHS had budgeted for R410 million for one year, and of that money very little was spent. The remainder of this money was added to the MTEF allocation. The Metro was turning the tide.

All tenders for housing were contested in court; because some contractors regarded themselves as "resident contractors". He described the bidding process as competitive, and this became the challenge for many contractors. EIAs were a challenge especially with the Duncan Village densification programme.

Mr Matiwane said with the informal upgrading planned for the current year, there were 15 informal settlements targeted in Mdantsane alone. These informal settlements had no EIAs but had funding from the R410 million. Some of them were only going now to tender. Delays were not with the consultants, but the procurement process.

He explained that when a tender had been closed the requirement was that committees had to sit; department had to make a submission; and supply chain had to take its decision. This chain of events had not been shortened based on the capacity of the officials responsible for the task. The Metro had since ensured that tenders were out for construction. This would not address all the informal settlements in Mdantsane, rather part of what had to be done.

The registration process of the projects had not been done in detail when it came to numbers. Work was being done to register all projects, so as to have beneficiaries approved through HSS.

Mr Matiwane said state owned land in the Metro stood just over 7 200 hectares. To engage in building more projects for human settlement, BCM had to first acquire the land. HDA had been engaged for this and the implementation protocol was in the process of being finalised. The City owned a little bit of land around town.

Land acquisition was a challenge for waste management, and this had been a major challenge in the city especially the landfill sites. This matter was being addressed, and the Metro was not proud of this. The process for the rehabilitation of the landfill sites was at the adjudication process.

Mr Matiwane said the Metro had a big backlog on ownership of properties. The backlog in title deeds was being addressed. About 10 000 should have been issued to date, but the Metro was sitting at under 50% of that. The Metro was concerned about issues of ownership and had thus appointed a pool of conveyancers to address the backlogs.

Challenges included limited bulk capacity and funding for the replacement of infrastructure, the land invasion and uncontrolled growth of informal settlements on state land. The state owned enterprises needed to avail the land to the Metro so it could build. Buffalo City was a city region, and attracted a lot of people from the former Transkei.

Solutions included the interaction with the HDA, but no agreement had been signed yet. Informal settlement upgrading was high on the agenda, and with the help from [NATIONAL URBAN SETTLEMENTS PROGRAMME (NUSP) (sp?)] the challenge would be addressed. Review and amendment of supply chain policy was necessary. A panel of pre-qualified contactors based on levels of grading would be included in the database. The outlook did not reflect the totality of what was expected by the Committee, but rather a gradual turn. The City did not have full time executive directors.

Mr Fani commented that dealing with the Department of Energy (DoE) was a challenge. The Department did not show their three year projections to the municipality, and waited until the house was 80% complete and occupied. While waiting for the houses to be electrified people moved in, and there was also vandalism. The issue of electrification of new houses was being addressed with National Treasury. The view was to see if the Metro could not electrify during the actual construction and later claim the money from DoE.

Another challenge was the EIAs. When sites were subjected to EIAs, the impression was given to the poor was that houses would be built. And when the feasibility study came back negative and when one did not go ahead with construction, it was like the Metro was reneging on promises. An instruction had been that officials should quietly go about EIAs, and only when approvals had been given, could people be informed of pending projects.

Mr Fani said the Metro had appointed auditors for tenders that were challenged. According to the National Treasury, the accounting officer had a right to appoint an auditor even if it was from outside, to monitor projects from start to finish. But this should not frustrate delivery. Sometimes there was professional jealousy amongst companies. The situation was not as good as it was supposed to be.

Discussion
Ms Duncan commented that the Metro needed to submit a separate reports on the title deeds and the outstanding EIAs.

Mr Mokgalapa said he appreciated the upfront nature the Metro had adopted in trying to solve some of the problems that it was faced with. He asked if the Metro had support from the political principals at the municipality.

The Chairperson commented about the limited owned land in close proximity to city centres, DHS needed to follow the Australian model. The process needed to be over a lengthier time, where people were prepared for such projects, and where local skills development was guaranteed. This needed to be from the community point of view, and not municipal officials.

The Chairperson commented that EIAs were critical and that all of the country needed to think of establishing new towns. The Committee wanted to interact with the executive authority in order to ascertain if officials advised and supported the principals correctly.

The Chairperson requested that Parliament’s Research Unit visit BCM in order to verify some of the information provided while the Committee awaited the political principals from BCM.

The meeting was adjourned.