Department of Human Settlements on its Strategic Plan 2013/14 and State of Nation Address response

Meeting report

The Department of Human Settlements represented by the Director General, Mr Thabane Zulu, and his delegation, presented its Strategic Plan to the Portfolio Committee. The presentation consisted of a strategic overview, budget structure, human settlement priorities, performance indicators and targets, financial information, and key risks and challenges.

The overview included the following points:
•           The Department implemented the approved turnaround strategy with effect from 1 April 2012.
•           An organogram was approved by DPSA with effect from 1 April and a process on migration of staff and personnel has been completed.
•           The National Treasury approved a revised budget structure which was consistent with the strategic plan but not the organisational structure
•           A key issue to receive attention was the alignment of roles, responsibilities, obligations and accountability for the household sanitation function.
•           The Department will use the 2013/14 financial year as one that imbeds the National Development Plan in respect of strategy, policy and operations for sector and institutional transformation and implementation.
•           The targets as contained in the Delivery Agreement signed between the Minister and the President also form a key basis of the strategic focus areas of planning, funding and implementation.

The following were key programme and projects activities for the period:
•           The implementation of the revised FLiSP programme.(Finance Linked Individual Subsidy Programme)
•           Implementation of the management of the Rectification Programme by the Department.
•           Focus on the accreditation programme

The presentation contained an organogram (see slide 11) outlining the organisational structure and the chain of command. A point to note was that there were six officials functioning in an acting capacity, including the Chief Director for Sanitation.

The budget structure was set out in terms of the Programmes of the department: Programme 1: Administration; Programme 2: Human Settlements Policy, Strategy and Planning; Programme 3: Programme Deliver Support; Programme 4: Housing Development Finance

Human Settlement priorities were: Upgrading 400 000 households in Informal Settlements, provision of affordable rental housing stock with 20 000 units per annum., the National Bulk Infrastructure Programme and Increased Access to Basic Services, acquisition of 6250 ha state owned land and the supply of affordable housing finance to 600 000 households.

Performance indicators and targets (see presentation) showed that DHS wanted to accelerate in three indicators from FY 2012/13 to 2013/14: upgrading of informal settlements, additional residential units completed per year and additional green fields sites serviced per year.

For the current FY, the budget was R28 billion with R30.2 billion and R32.7 billion projected for the next two financial years. A pie chart showed that 60.2% of the R28 billion went to the Human Settlement Development Grant while 32.29% went to the Urban Settlements Development Grant; 7.29% was divided into the transfer to the DHS institutions, the Rural Household Infrastructure Grant took at least 1% of the R28 billion, and less than 1% went to Administration.

Human Settlement Infrastructure Grant (HSIG)
Slide 22 showed the Human Settlement Development Grant allocations with Gauteng receiving the biggest allocation at R4 billion, while the Northern Cape received only R400 million.

Challenges listed were:
▪ A Lack of bulk and link infrastructure and related funding to implement projects;
▪ Delays in the planning of supply chain management;
▪ Lack of technical capacity at provinces and municipalities;
▪ Inefficiency in the alignment, cooperation and coordination of strategic objectives and programmes of Provinces, Municipalities and Entities
▪ Inadequate medium and long term pipeline planning for programmes and projects;
▪ Deficiencies in data management and integrity.
Slides 31 and 32 detailed interventions and measures to address the challenges.

Urban Settlement Development Grant (USDG)
Slide 37 outlined how the USDG had been allocated to metros around the country. The biggest beneficiary in this case was the Ekurhuleni Municipality with R140,5 million.

Challenges listed were:
▪ Lack of coordination/alignment within Metros that caused poor service delivery coordination for USDG;
▪ Lack of capacity to carry out programme plans;
▪ Critical vacancies and consistency of personnel managing the USDG;
▪ Land acquisition challenges and limited land in close proximity to the city centre
▪ Multi-year projects were budgeted for in one financial year due to inadequate planning of projects;
▪ Lengthy procurement processes;
▪ Legal challenges - tenders being contested in court for major projects;
▪ Management and governance of informal settlements
Slides 42 and 43 listed the interventions the department initiated to mitigate the challenges.

Rural Household Infrastructure Grant (RHIG)
The purpose of the Grant was to provide capital funding for the reduction of rural water and sanitation backlogs and to target existing households where bulk dependent services were not available.

Slides 46-49 detailed the municipalities which were benefiting from this grant during the current FY with projections for the next two. The presentation also detailed how the department supported municipalities with implementation and delivery.

Discussion
The Chairperson asked what the DHS plan was for administering household sanitation, because this was its mandate.

Mr Bhoola said much of the infrastructure and development was already in place in the Western Cape, compared to the challenges encountered in KZN. He was glad the presenter mentioned the formula according to which land reform would be done, because the formula addressed the problem. Could the Western Cape allocation not be given to KZN?

Mr Matshoba referred to Slide 48 on the RHIG allocation per municipality. He asked where the money went which was allocated to municipalities in Limpopo, because there were no toilets.

Mr Mokgalapa said the RHIG had to be aligned with sanitation. The Portfolio Committee was still waiting for the legislation from the department. Sanitation had to be listed as one of the line functions of the department.

Ms Duncan said municipalities were confused between the Municipal infrastructure Grant (MIG) fund and RHIG fund. Were both still in existence and what was the difference between them?

The Chairperson said she needed clarity on the two funds. The MIG was for bulk infrastructure. There were various infrastructure programmes that needed to be developed. How much had been set aside for bulk infrastructure for human settlements development? She noted that the Portfolio Committee on Human Settlements was an anchor portfolio committee. It could call everyone to account.

Ms Funani Matlatsi (NDHS CFO) replied that the MIG was funding a number of bulk infrastructure projects generically. It was specifically for sanitation projects in rural areas. The DHS had to ask itself how it should stretch to accomodate the MIG within the current technical framework. The DHS came up with a way to use the USDG with the permission of National Treasury, and extending it to those areas. Between the two, there would be some over-stretch and under-stretch.

Ms Matlatsi replied that the DHS was deciding on how to move forward on bulk infrastructure and Treasury was assisting it. NT suggested that, if there was an addendum to be made, it had to be made to the Housing Vote and the Housing Act. DHS was talking to NT about these issues regarding the budget in the future. Both parties acknowledged the current situation and because of the challenges current projects were budgeted for, but without provision for bulk infrastructure. Some projects, which were otherwise ready to be launched, could not launch because the budget for bulk infrastructure was not in place. If money became available during the next financial year, these projects would be prioritised.

The DG added that the DHS would have to come back to the Committee once a decision had been taken about the location of RHIG, whether it went to 62B as suggested by the Standing Committee on Appropriations and that would make the DHS have to review its model for delivery.

What the DHS was presenting was the current situation, which was subject to change depending on the outcome of that decision. As the situation stood currently, in terms of a proposal made by Treasury, the role of the DHS was monitoring and evaluation of what municipalities had been doing on the ground. The DHS was not responsible for the design, only the implementation and the monitoring, which could create tension. National Directors General had been bombarded with accusations of not delivering on the ground. DHS had put systems and mechanisms in place to improve this. Now a new model was being put in place that it had to deal with, which was a bit of a challenge. If the position which the Standing Committee on Appropriations took, was implemented, DHS would have to come back and inform the Portfolio Committee how it intended to run this programme. At least the budget for the next financial year was reasonable enough for the department to work with and the DG was confident that there would not be under expenditure. Broadly speaking, DGs were given a mandate to come up with proposals about where sanitation had to be located. RHIG was one component of it. The DGs met with the national DG to discuss the issue. The DG of DHS made the proposal the Portfolio Committee had proposed to the national DG in writing.

The national DG did not agree with that proposal. He proposed that there had to be a meeting with all the other relevant DGs like the DGs of the Department of Water Affairs (DWAF) as well as the DG of the Department of Cooperative Governance and Traditional Affairs (CoGTA) as well. The location currently was cumbersome, because there were different grants dealing with sanitation, located in different parts of the administration. All the grants needed to be aligned, and there had to be a decision about the best locations for these grants within the administration. The legislative process to effect these changes also had to be initiated.

The DGs met before the end of 2012 and the DG of DHS was driving the process to come up with proposals. The proposal had to take into account funding, location and implementation protocol. When things went wrong, people did not care whether it was a rural or urban area, or whether it was dry sanitation or sanitation with water. They saw the DHS as the responsible party, so the DGs had to come up with a comprehensive sanitation master plan that would take all these aspects into account and facilitate a more efficient system of applying these grants. Currently and in the next financial year, the DHS only administered the RHIG.

Ms Njobe said the fact that municipality did not know how to spend the MIG, was a sign of the weak relationships between spheres of government. Roads, electricity and water had to be in place before houses were built when developing a new settlement. It went back to planning.

Ms Matlatsi replied that Ms Njobe raised the weaknesses of communication strategies between the DHS, local government departments and CoGTA regarding the MIG. The DHS acknowledged it. The DHS had engaged with these other departments, regarding aligning the MIG and other grants to the Human Settlements Grants. Discussions were on-going for the DHS to access the MIG.

Ms Njobe said she heard from a colleague in finance that the RHIG was in future going to be administered by National Treasury itself. If NT had ideas on how the RHIG could be improved, why did they not communicate it to the DHS instead of taking it away?

The DG replied that the DHS was waiting for a decision. Legislators would decide where the RHIG would be located. It was presented in the manner in which Treasury had advised it to be done. There had been no consultation with the department or any enquiry regarding the implementation strategies the DHS had put in place to improve performance. It was a proposal and it went into the estimates for consideration. This then changed the whole scenario in terms of what had been planned for the last few years of the RHIG within the DHS. This development negated all the work that had gone into improving delivery in terms of the RHIG, of which the Portfolio Committee had been part. The DHS had implemented recommendations made by the Portfolio Committee on capacity development, debating with service providers and getting value for money. His view was that the decision by NT was based on financial analysis rather than strategic considerations. His view was that the DHS was more than ready to administer the RHIG for the next financial year from a capacity point of view. It had a model of implementation and the strategy to do it. He was confident that if it remained with the DHS for the next financial year, the amount allocated would be spent.

Mr Sithole referred to Slide 36 on USDG allocations to Metropolitan Councils where the eThekwini Council was listed as the beneficiary of the grant. What about the other districts and areas?

Ms Dlakude said on oversight visits the Portfolio Committee saw that most metros were unable to utilize the USDG. The presentation stated that the USDG allocations were increasing. What was the reason for this? Were the metros being tempted to use the money for other things? She wanted to understand the reason behind the increment.

Ms Mashishi referred to Slide 33 on the USDG. On oversight visits with the Portfolio Committee, she learnt that most metros did not know how to use the USDG.

Ms Matlatsi replied that it was important to understand what the USDG was buying and what the department wanted. It was important for the department that it brought in other mechanisms and models to improve the utilisation of and reporting on the USDG. It was important to indicate the way that the USDG was coined, it was meant to supplement investment. This took away what the DHS wanted. It wanted people to be able to buy a house or land with it. The DHS gave the USDG and it got to the capital budget of the municipality and it did improve the capital budget of the municipality, but the DHS would continue to improve and reposition it until it was satisfied with its position in terms of the National Development Plan (NDP) and the Service Delivery Budget and Implementation Plan (SBDIP).

Mr S Mokgalapa noted in the report that the department’s targets were decreasing while budgets were increasing. How did one marry the two? Was NDHS setting itself targets that were too high to achieve? Were the targets viable? Were they aligned with the proposed budget?

The DG replied that some targets were not achieved in the same year they were set. The department did a pipeline workshop with the provinces. It was more relevant in the sector of construction. It resulted in more realistic targeting. One could not thumb-suck in the construction industry. It was easy to measure, because one worked with units. One had to be realistic. The pipeline could be three years for one project. As the DHS dealt with its business plan for the next financial year, this would be one of the key areas it would be focussing on.

Mr Mokgalapa asked whether land was acquired from rural Eastern Cape or KZN where it had no value. Why could the department not have projects on prime land in the inner cities?

Ms Njobe said Slide 38 referred to the difficulty in acquiring land near city centres. Were the Portfolio Committee and the department being realistic in insisting that land for social or low cost housing had to be near town centres. Town centres were full. Why could land not be found elsewhere?

The Chairperson replied that there was land. The department had to find land. Ms Njobe was justifying the department’s failure to come up with land near city centres. The department had to investigate and come back with information.

The DG replied that land issues were sensitive, because it was related to market issues, the private sector as well as political issues. He was glad that there was a process underway in the Department of Rural Development and Land Reform to review the process of land reform. He had been an accounting officer at municipal level and knew that it was not easy to get prime land. The second issue that municipalities had to deal with was entering into a public-private-partnership (PPPs). For one PPP project, one needed one year and two months just to conclude the process in terms of the Municipal Finance Management Act (MFMA). This was where one could then leverage in terms of the services that one would provide. This was where concessions had to be made to the private owner in terms of developing the bulk infrastructure and using the MIG for that. It delayed the implementation of accessing prime land in cities and towns to able to do what one wanted to do from a human settlements point of view.

A review of the land situation was critical. The Housing Development Agency (HDA) mainly focussed on state-owned land. It had approached the DHS DG asking for money to buy prime land. He did not have the authority from a legislative point of view. They wanted money. He had sent them to the provinces and the cities, because they could acquire prime land there. It was simplistic, but it was do-able. Some provinces and municipalities had managed to access prime land for human settlements development.

Ms Duncan referred to Slide 14 on Acquisition of 6250 ha of state-owned land. Which province was acquiring land? Where was the land located? Had the land been identified in the  Interdepartmental Forum (IDF) and the Integrated Development Plan (IDP)? The department did not have to answer immediately and the answers could come in written form.

Ms Sindisiwe Ngxongo, Chief Operations Officer, NDHS replied that NDHS was busy consolidating a report on the specific location of land in terms of provinces, districts and towns so that it would enable the Portfolio Committee to provide better oversight.

Mr Mokgalapa said the department wanted to dump money, in the form of the HSDG, MIG and USDG on municipalities which did not have accreditation. How would one ensure that these municipalities would be able to spend it? If one wanted to advance in terms of service delivery in housing, why not cut the red tape? Why did it still take three years to deliver 50 units of RDP housing from the land-assembly stage to the happy letter stage?

Ms Njobe asked which municipalities the DHS were planning to accredit.

The DG replied that getting more municipalities accredited and getting them to capacity spend was a challenge. The process to get a municipality accredited was very comprehensive. There were clear terms of reference and factors that had to be taken cognisance of. But despite all this, municipalities were still under-spending. One did not get the value of the process at the end of the day. There were many factors such as in some instances, when the process was completed, the manager was fired. Continuity and stability in the institution was important. If the leadership changed, it influenced the process. By next month, the DG could be sitting with six acting HODs. In municipalities the turnover of officials was even worse. When a person acted in a position, he could not make decisions, which was problematic. The process to get accredited was tight and independent.

Mr Neville Chainee, DDG: Strategy and Training, added that when the NDHS did an assessment for accreditation of a municipality, it employed an independent panel which included a whole range of experts that went into a municipality and did an in-depth analysis of governance, administrative capacity, project management and other aspects for an end-to-end evaluation. All this information was assessed and, based on this assessment, a recommendation was made. The province then did its own investigation. It was an intensive process. Institutions would have capacity challenges at different periods. He cited the example of Buffalo City which at one stage achieved two awards for governance. Msunduzi had great things going, then the DG left. One needed to remember that there was ebb and flow in the development of institutions.

One had to remember that metros like the City of Cape Town had a budget of R25 billion, EThekwini, R32 billion and Johannesburg R30 billion and they did deliver on their mandates. He urged Members to look at the grant frameworks in the Division of Revenue Act (DORA) because the grant frameworks were tightened to make sure grants went where they were meant to go. The DHS did not want communities to suffer because somebody could not do his/her job.

Mr Mokgalapa said the Programme Management Unit (PMU) had to be welcomed, because it would assist with quality assurance. He liked the idea that the CEO, the PMU and audit committee would visit projects on the ground to verify that reports on projects were true.

Ms Borman said she was very pleased the PMU was going to give the country value for money.

The DG replied that one of the key functions of the PMU would be to monitor every business plan in terms of its targeting. PMU will try to develop a dashboard which would display a summary of all the projects in a province, the expected duration of each and the degree of completion of each. The DHS was managing a R30 billion budget and it needed to be resourced in order to be able to account properly. This problem was linked to the land acquisition process.

Ms Mashihi referred to Slide 22. It listed the allocations per province and showed that while Gauteng received R4 billion, Northern Cape only received R395 million. The CFO said the Northern Cape would need more money, because it was vast. By when would it be allocated more money, because the ratio stayed the same until 2015/16?

Ms Matlatsi agreed that the Northern Cape  received a smaller allocation. The DHS would review the formula. Economic factors affected the budget. How did the budget relate to units delivered? It had a drastic impact on units. The value of the budget decreased although the amounts and the figures decreased. Price increases of materials also resulted in more money being able to buy less material, explaining why the budgets become bigger while the units delivered or targets become smaller. The distances in the Northern Cape  had an impact on the amounts of money allocated. This resulted in fewer units provided and the budget becoming overstretched.

Mr Sithole (IFP) referred to the organogram of the department (Slide 11) where it showed that six top level positions had officials in an acting position in them. He asked how long this situation was going to persist.

Ms Duncan said one could not keep officials away from finding better opportunities, but it was not acceptable to keep people in acting positions for longer than six months. If people were good enough to act in the position, they had to be good enough to be appointed in the position. She said this in the light of the fact that there were seven million unemployed young people, and two million of them had experience.

Mr Matshoba referred to the organogram on Slide 11 and remarked that Mr P Chauke, who was Chief Director: Programme Monitoring & Evaluation was also acting Chief Director: Sanitation Programme. This meant that his main interest was monitoring and evaluation, but sanitation, which was such an important programme was of secondary importance. This was not a healthy state of affairs.

The DG replied that the department was trying hard to fill all vacancies. It made sure it appointed people with the requisite skills and competencies. There had to be leadership, continuity and management. There was no specialist person for sanitation. The DG had sat through interviews with candidates. 'Acting' did not give a person sufficient power to deliver on his/her mandate.

Ms Dlakude said NDHS needed to give the Portfolio Committee a comprehensive briefing on its Rectification Programme. The Portfolio Committee’s research unit found that just over 160 000 units had been rectified for more than R4 billion. Yet NDHS was reporting that there were plans for rectification programmes in all provinces. How many units would be rectified with the R686 million allocated in all these provinces?

The Chairperson referred to Slide 7, bullet point two, which was the ‘Implementation of the management of the rectification programme by the department’. The presentation did not mention what had been agreed between the department and the Portfolio Committee. The department and the Portfolio Committee had agreed that rectification was a problem and a challenge and that it had to be centralized. She wanted the department to be clear in its recommendations to MinMEC that the Portfolio Committee did not approve of an agency to oversee the rectification programme.

Ms Njobe said on rectification that the country sat with shoddy work done previously and there was no movement towards an end to the process. It went on from year to year. Questions on this issue would come up as long as one did not see an end to this programme.

Ms Borman said she thought the Portfolio Committee needed a total picture on rectification. The National Home Builders Registration Council (NHBRC) did a thorough investigation and came up with an amount of R64 billion. The Portfolio Committee never heard about that amount again because NHBRC was taken off the project. The day before, the  Minister mentioned R58 billion. The DHS had to come back to the Portfolio Committee with the full picture.

The DG replied Ms Borman's comment was exactly the reason that the decision had been taken to centralise rectification. It had to be centralised in order to clear up all the confusion around it. The DHS wanted to coordinate it from a central point so that it could be clear which areas were affected, what approach had to be taken and what budget would be required. He was avoiding putting an amount on it at this stage. The DHS would come back with a comprehensive report.

The DG replied that the issue raised by Ms Borman was exactly the reason why the decision had been taken to centralise the rectification. It had to be centralised in order to clear up all the confusion around it. The DHS wanted to coordinate it from a central point so that it could be clear which areas were affected, what approach had to be taken and what budget would be required. He was avoiding putting an amount on it at this stage. The DHS would come back with a comprehensive report on rectification in the country as a whole.

Ms Matlatsi replied that when the DHS returned for the business plan presentation, it would show that small amounts had been assigned to disaster rectification in terms of the business plan. It needed to be reported on separately and would be broken down. It would be classified under rectification generally.

The Chairperson asked what the duties of the Enterprise Architecture unit were.

Ms Ngxongo replied that this unit monitored the implementation of the Annual Performance Plan. By the time the DHS compiled its Annual Performance Plan report, it would have collected evidence and done validation. This unit was also responsible for the compilation of the Annual Report. Where certain units in the department were not performing, this unit would pick it up, notify management and ask what the corrective plan had to be.

There was an Operations Performance Assessment Framework which was being developed by the Department of Monitoring and Evaluation in the Presidency. The responsibility of this unit in this department was to make sure that there was alignment to that framework.

Ms Borman asked how many policies the DHS was working on that still needed to come before the Portfolio Committee.

Mr Martin Maphisa, DDG: Policy, Governance and Advisory Services, NDHS, replied that the last comprehensive policies based on the old legal framework, the Housing Act, were signed off in 2009. It was called the Housing Code and consisted of seven volumes. The current task was to enhance those and bring it up to speed with the revamped DHS. This task included isolating those policies which would contribute to Outcome 8 priority projects of government. Those policies for instance dealt with finance, the State of the Nation Address, cooperative and rental agreements, and density policies (for example determining the densities of towns and municipalities in their development). The rural voucher scheme was also in the pipeline. These were some of the issues which would be addressed. The Norms and Standards report was at a very advanced stage and DHS would be guided by the DG on when to come and present it to the Portfolio Committee. It would include a review and costing of all products so that a house in a particular area could be costed and standardised. Policies related to DHS agencies (such as the HDA) would also be taken into consideration. The Accreditation Framework was also part of the policies the unit was working on.

The Chairperson reminded Mr Maphisa that he must remember the deadline on the HDA issue.

Mr Sithole referred to the National Infrastructure Programme in relation to Orange Farm. He was concerned that the infrastructure crisis was increasing in Orange Farm.

Ms Borman referred to Cornubia, a development in KZN. Although it was getting R120 million, the backlogs were getting bigger. There were many land invasions, 11 000 people were living in shacks and there was a backlog of 410 000 units.

The Chairperson said, while it was good that social housing was being improved, DHS had to remember the upgrading of informal settlements as well as land release. Those were key critical areas. What was the number of people living in informal settlements? The Portfolio Committee must get the presentation which Prof Van Wyk gave the day before, to get this information.

The DG replied that the red tape issue was a systemic problem but also a capacity problem, particularly in the supply chain management area. It was systemic, because in most municipalities, when bigger projects were done, such as the case of Cornubia, once one service provider decided to declare a dispute, the project was held up for eight months. It was a systemic problem, because the project had to stand still until the matter had been resolved in court.

Ms Borman told the DHS delegation should not come to the Portfolio Committee with provincial business plans which were not aligned to the targets of the DHS.

Ms Matlatsi replied that DHS would provide a breakdown of units per province and rectification details. The business plans had not been signed yet. It was still in draft form. The DHS would provide all the information asked for when it presented its business plan.

When Mr Sithole referred to Slide 14 on the number of households affected and asked if it 400 or 400 000 households, the DHS answered that it was 400 000 households.

The Acting Chairperson (Ms Dlakude) asked what a CIO was.

The DG replied that it was a Chief Information Officer. The department had a responsibility in terms of law to have a CIO at chief director level.

Ms Borman was confused about the concept of the strategic plan. There was a five-year plan – 2009-2014, there were medium term plans. Were the business plans referred to the Annual Performance Plan? She could not see big picture so that she could follow the progress actually made.

The DG said the DDG on Strategy would deal with plans. It was a statutory issue and had to be done correctly.

Mr Chainee, DDG on Strategy, replied that on an annual basis, after presenting the strategic plan, the DHS came back and presented the provincial business plans, which outlined how the provinces were going to spend their allocated budgets. This presentation also included a project list, so that when the Portfolio Committee did its oversight, it could measure progress in terms of these projects. There was a national business plan and nine provincial business plans on an annual basis. The five year strategic plan was the one presented to the Portfolio Committee during this meeting.

Ms F Matlatsi, CFO: NDHS, said the department had come up with a performance matrix from the built environment plan and just extracted issues related to housing. The DHS would then respond and comment on them to the different stakeholders.

The Acting Chairperson said she needed the department to respond on how it saw its role relating to the issues raised in the State of the Nation Address.

Alignment of DHS Strategies and Plans with the State of the Nation Address
The DG said the DHS had highlighted areas that were covered by the President in his State of the Nation Address. He had taken cognisance of what the Chairperson had said. The approach was to develop action plans on how the DHS was dealing with those issues. The most important one was the Finance Linked Individual Subsidy Programme (FLISP).Another important one was the living conditions of mineworkers and communities in mining towns. The action plans on these issues would be presented to the Portfolio Committee. These issues would be reflected in the business plans for the provinces and the budgets had been set aside for these. Another issue was the Mortgage Default Guarantee Fund which the DHS would also be able to give feedback on and an action plan. Another matter was how the private sector was assisting government in service delivery. Those were the key areas. The DHS would give the Portfolio Committee a plan which detailed its part in the National Development Plan (NDP) as part of holding government accountable from a developmental point of view. This would be reflected in its business plan at national and provincial levels.

The Acting Chairperson said the Portfolio Committee requested a list of service providers appointed by RHIG Programme.

Mr Bhoola said that the DG alluded to the diagnostic report and its alignment with the NDP. He observed that there was strategic planning around these plans to achieve the desired outcomes. This was positive, but what was even more commendable was the fact that the department was very frank about its challenges. In order to have success with the NDP, these challenges would have to be dealt with. For instance, if the challenge of capacity was not addressed, the goals of the NDP would not be realized.

The Chairperson said there were issues the presentation did not address.

Firstly, the DHS had to provide solar geysers and the means to utilise renewable energy to all low cost housing. The DHS needed a policy, a plan, norms and standards as well as arrangements with other departments towards achieving this goal.

Another issue not addressed in the plan was hostel conversion into social and rental family units. How many hostels were lined up for upgrading in the DHS plan?

Another issue not addressed was redressing the past apartheid spatial settlement planning and the need to develop national integrated urban development frameworks.

What was the DHS doing to make sure all these issues were addressed?

An amount of R800 million was earmarked to be spent on the green economy? What was the role of the DHS in these processes?

The DHS had a budget of R132 billion. What had the DHS done to make sure it accessed those resources?

The following questions went unanswered in the meeting:
Mr Sithole referred to Slide 16, the second indicator ‘Total number of municipalities provided with technical assistance for informal settlement upgrading per year’. He asked the department to clarify.

Mr Sithole referred to Slide 24 which listed priority projects in five provinces. All the projects in Gauteng were situated in JHB. What about Tshwane, Ekhuruleni?

Mr Bhoola said there was a need to disseminate information on housing and the processes involved. Members could also assist in getting the information out to their communities.

Ms Mashishi asked for a breakdown per province of the Rural Housing Programme allocation of R2.7 billion.

Ms Mashishi referred to Slide 39 under the heading ‘Challenges’ where legal challenges were listed. Did the department have any guidelines to stop these legal challenges?

The Chairperson said she needed clear information on the delivery agreement signed by the Minister and the President, referred to on Slide6. It might look good on paper, but she wanted to see progress in terms of delivery.

The Chairperson asked why National Treasury would not consider a budget for an organisational structure which had been approved by the Minister of Public Service and Administration, and she believed the Minister of Human Settlements as well.

Ms Njobe referred to the last two Indicators in Slide 16: ‘the number of additional residential units completed per year’ and ‘the number of additional sites serviced per year (green fields)’ , when comparing the figure for 2012/13 to 2013/14, the figure doubled or tripled. What additional effort was DHS going to put into it?

Ms Njobe referred to Slide 46 which listed the municipalities in the Eastern Cape which were allocated RHIGs for sanitation programmes. All the areas were in the former Transkei. The Ciskei-part of the Eastern Cape was actually the poorer region, but there were no actions in terms of this programme in the Ciskei. The question had to be raised with the province.

Ms Njobe asked what effort the department put into ensuring there was capacity building. Unlike other departments, the Department of Human Settlements had resources, but no capacity. Did the department have a plan to build capacity in the department?

Ms Borman asked whether, when departmental officials mentioned that National Treasury would supply, it meant this was extra funding in addition to the R28 billion.

Ms Matlatsi replied regarding alignment, all provincial treasuries wanted to be part of the supply chain. They wanted to sign for a certain amount. This was under discussion and a process was underway to accommodate them in this regard. Some provincial treasuries were already signing for some of the bids and tenders.

Ms Borman said when the department talked about social and rental housing; she did not hear anything about beneficiary management. This was an area of great weakness.

The Chairperson said the Portfolio Committee had requested the following items:
- A list of service providers appointed by RHIG Programme.
- A comprehensive report on the national rectification programme
- Clear information on the delivery agreement signed by the Minister and the President, referred to in Slide 6. It might look good on paper, but she wanted to see progress in terms of delivery
- What were the number of people living in informal settlements.
- Which municipalities the DHS were planning to accredit.

The meeting was adjourned.