North West Provincial Department & Housing Corporation: Progress in implementing Committee recommendations, and housing provision in mining towns

Meeting report

Chairperson’s opening remarks
The Chairperson welcomed officials from the Northern Cape and the North West provinces. A word of thanks was extended to Members from other Committees, who had indicated they were keen to listen to progress made in their constituencies. She noted that by sitting in at other committees, constituency Members helped Parliament’s function of oversight, as Members could not be in every corner of the country.

She noted that the Department of Human Settlements (DHS or the Department) had prepared a report on the state of housing in mining towns. A Presidential directive in the State of the Nation Address was that housing in mining towns be attended to as a matter of urgency. The Department of Human Settlements and the Department of Mineral Resources (DMR) should have worked together on this aspect of delivery. It was prudent that the Portfolio Committee on Mining be kept abreast of what was happening, and thus its Chairperson – Ms Faith Bikani – would join the proceedings. She handed over to the presenters.

Housing crisis in mining towns: National DHS briefing
Ms Julie Bayat, Chief Director : Programme and Project Planning, National Department of Human Settlements, said a lot of preparatory work had been done in responding to the housing crisis in mining towns. The special Presidential directive in the State of the Nation Address was made so that the living conditions for mine workers would be improved. Collaborative work with DMR, as well as with the departments of Cooperative Governance and Traditional Affairs (COGTA) and Labour (DoL), was being piloted in the Bojanala District. A project of this nature required an integrated approach if Government was to adequately address issues of housing in mines.

The DHS had looked at the policy and administrative gaps, financial input, and non-financial outputs that would be required. A conscious decision was then taken that focus would be given to the Bojanala district, where Marikana was located. DHS was satisfied and ready to brief the Committee about the work that had been done with regards to the special Presidential package for mining towns. The country had experienced a challenge of increased mining activity that resulted in more informal settlements springing up around the areas where mines were located. The increased mining activity had put a strain on housing delivery and other associated issues, like basic infrastructure, and this would worsen if the trends continued. The strain manifested in shacks and in hostels in mining towns, which generally contributed to deterioration of living conditions of mineworkers.

Following this observation, the Social Development Cluster, which included DHS, resolved in 2012 that conditions of mineworkers had to be improved, and discussions followed on how to deliver the Presidential package. It was agreed that systems be put into place to put the package into operation, and to finalise the implementation framework. The departments concerned should move with speed and coordinate efforts to develop the plan of action for five years. They were aware of the need to align, and those responsible should lead their Strategic Infrastructural Projects. There also had to be a monitoring and evaluation system to track progress made in implementing the plan. A high level committee would meet monthly to evaluate those plans.

The towns identified, whose development needs were to be considered, included Emalahleni, Sekhukune, Klerksdorp, West Rand, Welkom, Lephalale, Rustenburg, and Carltonville. The departments together examined those outcome areas pertinent to the portfolios. Achieving integrated human settlements was the main outcome for DHS, and its work was therefore geared to upgrading informal settlements, providing subsidised housing and low-income rental to mineworkers. DHS had to prepare the ground work before full-scale implementation of the project, and had, to that end, undertaken brief desktop studies in the identified mining towns. Substantial time was spent in trying to understand the extent of challenges and the kind of work being put into this aspect of development.

Funding for the special presidential package had been requested from National Treasury (NT), and money had been allocated. NT allocated an additional R1.1 billion for the informal settlements upgrading programme, and provinces had provided R1.6 billion to each mining town. DHS had begun preparation on a human settlements framework, but that work had not been completed. In the meantime, provinces, municipalities and social partners had been consulted so as to ensure the package was inclusive. The information on the special Presidential package was shared with municipalities and provincial departments and they were asked to indicate the demographics and the housing need in their areas.

It was important that sector departments came in and got involved, but the human settlements implementation plan pulled the sector departments together. They were required to state when they would be delivering. DHS had aligned a number of different processes and had pulled the National Upgrading Settlements Programme (NUSP) initiative into the mining towns projects. It was necessary to understand involvement of its entities so as to avoid duplication. The Housing Development Agency (HDA) had been brought in, and already terms of references were put to it. An input from some of the mining houses was received.

Some of the mining houses were providing housing for their employees, and from time to time they made pieces of land available. However, in future more time would have to be spent on finalising land acquisitions. All entities involved must cooperate to ensure that the mandate for the Presidential package would be achieved. Municipalities had been requested to finalise their human settlements development plans by June 2013, but that was not realised due to the lack of financial resources. In addition to that, much focus had been dedicated to Bojanala. DHS had requested the HDA for appointment of proper project managers for each mining town, to have each project manager run each project in every town. That had started and was well in progress.

All entities in the human settlements portfolio had been engaged, following a request by the inter-ministerial committee (IMC). The HDA had been requested to finalise the programme for the project management expertise, over and above land assembly processes. Work had started on that front. The Social Housing Regulatory Agency (SHRA) would facilitate the delivery and management of rental stock. The National Home Builders Registration Council (NHBRC) would be involved in the quality assurance and enrolment of all the projects. The National Housing Finance Corporation (NHFC) had an input into the documents as far as bonds and the Finance-Linked Individual Support Programme (FLISP) were concerned.

The mining towns would be managed from DHS’s Project Management Unit (PMU) as it was a national strategic priority project. Each mining town would have a dedicated project manager, who would be responsible for all aspects of delivery, and who could be held accountable. HDA would appoint the project managers, and the terms of reference had been made available. Non-financial delivery would be tracked on a monthly basis. All the processes would be underpinned by implementation protocols that had already been provided to DMR and COGTA. DHS would like to see ring-fenced funding continued for the upgrading of informal settlements.

Provinces would be central to the reporting structure because they made money available. Each one of the mining towns would have a PMU where the project managers would ensure all operational issues were dealt with. They would then have to prepare consolidated reports that would be forwarded to the technical task team. This was an inter-governmental relations team, where provinces and municipalities would be represented. This level would assess whether the work was done correctly or not, and would recommend changes. It would meet at least once a month, to address any challenges on site, and to track progress regularly. Above this level, there would also be a project steering committee, made up of heads of departments (HODs), municipal managers, the Director General (DG), and the designated representatives. This would be a high level task team that would give strategic oversight to the technical task team. Finally, reports would go the Department’s PMU, and would be submitted to the coordinating task team – a structure where the Presidency, DMR, DoL, and COGTA were all represented. Finally, the reports would reach the Directors General. All of this would ensure that there was proper reporting.

DHS proposed, as part of addressing the problem, that mine workers must become part of the community, as opposed to merely having houses built for them in “some corner”. One suggestion was to apply similar principles as had been adopted for the military veterans. It might be that a percentage of a housing project was allocated to qualifying mineworkers households, with the rest allocated to qualifying beneficiaries on the list. The idea would be to have mineworkers as part of an integrated community. DHS also had to take into account that there were backyard dwellers, and a policy for this category needed to be addressed at the national level. There was a challenge with the waiting list in the North West, but a correct list had since been compiled. A demand database process was under way.

Because of the recent incident in Marikana (where 34 miners were killed by the police, on 16 August 2012, when protesting against low wages and bad living conditions in the mines) the Directors General indicated that focus be given to Bojanala District Marikana straddled two municipalities of Rustenburg and Madibeng. Much of the land was privately owned and that posed challenges of its own. Demographic growth was unbelievably high for Rustenburg and the population was growing way beyond what the existing infrastructure could accommodate. A huge section of the migrant population was earning less than R10 000  in the lower earning brackets, so this was a relatively poor strata of society.

Lonmin, who owned the Marikana mine, indicated it intended to transfer serviced land for its workers. The area included Wonderkop, the place where the 34 miners had died. There were about 3 065 informal structures currently registered in the area. There were challenges with the tribal authority, who often demanded that land be found for Lonmin employees, who were considered to be the “mafikizolo” and were not welcomed in their area. The tribal authority also would claimed that infrastructure should rather be put on the land for the authority’s community. R75 million had been allocated for buying land in the current financial year. The HDA was assisting with the process of acquiring land, but feasibility studies had to be undertaken to determine the level of suitability for occupation, and these were currently under way.

Another area was Nkaneng, an informal settlement of about 5 000 shacks on privately owned land. People lived in squalor, with no infrastructure. A process had been initiated to at least get water into the area.

There had to be constant oversight of the project in Bojanala. Phase two of the special Presidential package would include other areas as Emalahleni, Matlosana, and the West Rand. Processes similar to those in phase one would have to be put into place there. DHS was dealing with the appointment of dedicated project managers. DHS’s PMU and the Department of Performance, Monitoring and Evaluation (DPME) would maintain oversight and monitoring.

Discussion
Siting of projects
Mr Gibson Anthony, Executive Mayor, Gasegonyana Municipality, commented that the project was appreciated, but it also needed to address imbalances generally in the mining sector and not be focussed only on the North West. He asked if there was an intention to expand the programme to the Northern Cape, given that mining was booming in that province.

The Chairperson concurred with the need, and said the President, in his State of the Nation Address , had not mentioned Marikana by name, but rather made a reference to improving housing in all mining towns in the country. She questioned why suddenly the focus was given to Marikana. She agreed that Northern Cape (NC) had similar housing challenges for its mineworkers.

Ms Bayat replied that she agreed with the comment on the NC, and DHS was aware that there was a need for an intervention in all the mining towns. The Department had drawn information on all the mines. The focus on Marikana, however, was a directive from the Presidency and DMR.

Mr S Mokgalapa (DA) shared Mr Anthony’s sentiments and said there was potential for a productive mining sector in the NC. All municipalities lacked capacity in addressing the housing challenge in mines, and preference ought not to be given to any one municipality. The Committee should recommend that the strategic intervention be extended to the NC. Municipalities lacked capacity to exploit the investment opportunities associated with the mining companies.

Mr Mokgalapa sought clarity on the priority projects that were identified, noting that they would receive R1.4 billion. Lephalale was both on the priority projects and the special Presidential packages, and he asked what was happening there. He pointed out that most priority projects never got off the ground, and yet Marikana seemed to have been elevated, and was high on the agenda.

Ms Bayat replied that Lephalale was a priority project. In the last meeting that DHS had with Eskom, on the previous Monday, it was indicated that there were challenges with the Limpopo province. The programme had been escalated from Eskom, and a letter had been sent to the Director General, indicating that the province would ensure there was a contractor on site in September. DHS had assembled a team, procurement would be escalated, and Eskom had undertaken to ensure there were sub-stations put in place for Lephalale. There had been challenges on that in the past, but it was now unblocked. Bulk services had been put into Lephalale, but there could be a problem about testing for the infrastructure. A fuller report would be prepared and presented on the next occasion that DHS came to Parliament.

Mr Mokgalapa sought clarity on the availability of public land. An audit, done a while back, indicated that land was available in the mining towns. The Department surely needed now to engage with the departments who owned those parcels of land. Transnet was one of them. Land was available, but had never been released for human settlements purposes, and this had to happen quickly.

Ms Bayat replied DHS would engage the HDA on the land availability issue. Mining houses and public entities were becoming involved in the project, and were volunteering help both in financial and land form.

Overall oversight function
Ms G Borman (ANC) commented that it appeared that a lot of work had gone into the special Presidential package project. The plans were “brilliant” but she asked who would bear final responsibility. She sought clarity on the management structure and who would chair the coordinating task team. She pointed out that the mines also had to be involved and a substantial contribution was needed from them into the management structure.

Ms Bayat replied that the ultimate responsibility rested at the provinces, because they were the developers. There would be commitments and funding requirements, and the provinces had to disburse the funds. If ringfenced funding was arranged, then it was important for the national DHS to be involved, because this was a national project and it must also keep track of the funding.

The Chairperson interjected to seek clarity on who would be responsible for the final decision, given the challenges associated with procurement. The Committee did not want a situation where contractors were taken off site, resulting in unwarranted delays. Because this was a special project, well-established companies should be used. She asked who exactly would shoulder the blame for non-delivery and the final decision.

Ms Bayat replied that there would be contractual obligations put in place, and these would clearly state who must secure service providers. Currently, the way the legislation had been crafted meant that it was the developer who must ensure that service providers were procured.

The Chairperson said that the province alone should not be held responsible for the project; and this was critical. Bidding committees should be established, in such a way that national departments concerned were represented.

Ms F Bikani (ANC, Chairperson of the Portfolio Committee on Mining) concurred, and added that there was a need to ensure transparency in the process that would be followed when procuring, and when announcing who had been selected and how such contractors had been selected. There had to be true empowerment. The Portfolio Committee on Mining was still concerned that mining houses were still procuring outside of the country, because they claimed there was no production capacity in the country for the required machinery. She said she found it hard to understand that the project would be labelled a national project, and yet provinces would be decision makers for implementation and procurement.

Mr Alvin Botes, MEC for Human Settlements, Northern Cape, said he agreed with Members that provinces could not be at the head of a national project. Funding would be ring-fenced by the national Department; and it therefore surely DHS who should oversee the projects.

Ms Funani Matlatsi, Chief Financial Officer, National DHS, said the PMU within DHS would take the process forward and oversee it.

Collaboration, Nkaneng and beneficiaries
Ms Bikani said although she understood the presentation, she also stressed the need for coordination of the concerned portfolio committees – namely, Mining, Human Settlements, COGTA and Labour. She thought that there should be meeting to agree upon clearly indicated timeframes and the financial implications, spelling out where and how spending would happen. She said that there was some need for moving this forward, as Members would prefer to see the results before the elections.

The Chairperson said it was important that other departments clarified the kind of budget they would contribute to the project. She pointed out that this presentation essentially set out the human settlements portfolio.

Ms Bayat replied that departments had been working in unison on the project, but reporting was done to the DMR and the Presidency. A huge amount of work had already taken place. Guidance from DMR and Presidency was received, and DHS was part of discussions with other departments. Government also worked closely with mining houses, and recently DMR called the mining houses to a meeting in Pretoria.

Ms Borman said more light should be shared on the beneficiaries, especially since mining employees were often migrant workers who had homes elsewhere. She asked if this aspect of the mining sector ha been taken into account. She asked if the project was intended to offer permanent housing opportunities for mineworkers, and how this project would address the ownership challenges in the sector.

Ms Bayat said migrant labour beneficiaries for the projects were indeed a challenge, as they resided temporarily on mines. One recommendation had been that a percentage of the project would go to the people who qualified and who would stay permanently in those areas. There were qualification criteria attached to the projects.

Ms Borman agreed with Mr Anthony’s earlier comment, supported the ideas and urged that there should be forward planning on the issue. The situation in Nkaneng informal settlements, where 20 households shared a toilet, was very serious and a health hazard.

Ms Bayat replied 20 families to one toilet was a serious matter and this had been raised with the municipality. She agreed the situation was untenable and was, in fact, a health hazard. It would be raised again with the municipality.

Mr K Sithole (IFP) sought clarity on the extent of the mining houses’ involvement in the project. He wanted to know when the consolidated programme for implementation would be available, and pointed out that no timeframes had been indicated on the presentation.

Ms Bayat replied that there were deadlines on the table for the project. Timeframes for the coordinated plans had been drawn, and she would provide them and add them.

Mr Sithole said the West Rand, Carletonville and Klerksdorp were all in one area, although the impression had been created from the presentation that they were different.

Ms J Sosibo (ANC) said there was an urgent need to improve the working conditions for the mineworkers, since miners were living in conditions that could best be described as “horrible”. She asked if anything was being done to improve those living and working conditions.

Ms Sosibo asked if there were any blocked housing projects in any of the mining towns, and, if so what had been done to unblock such projects. She also reiterated that it was unacceptable for 20 households to share a single toilet. It seemed officials were forever planning, but nothing got done.

Ms Bayat replied she was aware of one blocked project, but it had since been unblocked. She also added that the NHBRC would be called in and would provide the required quality assurances. DHS had requested the HDA to provide proper and clean reports.

Management structure
Ms P Duncan (DA) commented that she had a problem with the proposed management structure, as it appeared too exhaustive and bloated. She did agree with monthly reporting on projects.

Ms Duncan asked how much the project managers seconded by the HDA would be paid. Municipalities could project manage the programmes themselves as the roll out started to happen. There appeared to be no reason why project managers had to come from elsewhere. She pointed out that the money that would be used for their salaries could be used to build more houses.

Ms Bayat replied that project managers would be housed within the PMU unit and would be paid the same amount that would normally be paid if they were provided by the unit. Personnel budgets would be utilised, and the project managers would not be paid any more than what the Department would pay for its own project managers.

Bulk infrastructure challenges
Ms M Segale-Diswai (ANC) said she could not understand why bulk infrastructure was not available for Wonderkop and asked that this should be prioritised. The area was a health hazard, as people were relieving themselves in plastic containers and dumping them in the streets. It was not proper that a housing project would be started without first addressing sanitation, and she questioned why this had not happened in the Wonderkop area. She also sought an assurance about the effectiveness of the tracking system, as it appeared things did not seem to be implemented on the ground.

Ms Matlatsi replied that the DHS acknowledged the issue of bulk infrastructure, but pointed out that this problem did not only affect the mining towns, but human settlements projects generally. The Urban Settlements Development Grant (USDG) was a grant provided to the metros that was meant to address infrastructural challenges. A suggestion had been made that the USDG should be extended to non-metro areas, including mining towns. However, it had been found that the metros were unable to utilise the grant to the full advantage. Discussions had been held with NT about the fact that USDG was not addressing what it was intended to do. Bulk infrastructure had to be seen as part of the bigger picture, in a process that would involve other departments, with consideration also taken of other funding that was meant for infrastructure, like the Municipal Infrastructure Grant (MIG) and other funding from COGTA.

Ms Bikani stressed the importance of integration and coordination among departments. There were several pending Bills that could have an effect on how plans like the special Presidential package were rolled out. Public hearings were needed. Although departments still tended to work in silos, this was nevertheless a very good project. She urged that this presentation also be made to the Mining Portfolio Committee as well, as that Committee had not sight of the details and plans that had been revealed today. She also asked if there were any timeframes for the project.

The Chairperson said the special Presidential package project should also be targeting other provinces that had a vibrant mining sector. She clarified that this meeting was called to allow the Human Settlements Committee to get feedback on what had happened since the call to improve housing in mining towns. It was incumbent upon the DHS to brief all relevant Committees of Parliament on progress of the project.

North West Housing Corporation property portfolio
Mr Chris Moller, Acting Chief Executive Officer, North West Housing Corporation, said the purpose of his presentation was to deal with the custodianship of the properties that were still under the North West Housing Corporation (NWHC), and yet were situated in the NC. However, he noted that some other assets and liabilities were situated in other provinces, including Free State and Gauteng. These posed challenges and the intention was to sign agreed implementation protocols with Premiers of the concerned provinces. These would hopefully address issues such as liabilities linked to the projects. In the case of the NC, there were only assets, but no liabilities involved. The intention of the NWHC was to dispose of all of the properties before the Corporation was closed. Some of the assets were referred to as “old stock”, as they were built before 1994.

A decision was taken to transfer, free of charge, to deserving occupants/owners of the properties. However, there were difficulties because the NWHC first had to verify the documents. Some of the original holders of the deeds had since died, which posed difficulties in verifying the documents. Any charged bonds on the old stock were cancelled and there would be conversion of the Deeds of Grants into full titles.

The new stock properties had been sold in terms of instalment sale agreement to the relevant owners. In some cases, the reasons for the new stock not being transferred were linked to the relevant township registers not being opened. This was quite frequent in Gauteng but the issue was being addressed.

There were some old stock properties that were left in areas like Pampierstad, although not a big number, at around 110. NWHC anticipated that it would be able to acquire all the outstanding documents that would be required to transfer the Deed of Grants to full titles before the closure of the corporation. Mothibistad, which involved new stock, posed more challenges. Here, the units were sold in terms of the instalment sale agreements. If there were outstanding balances, that could delay the process. If the NWHC had to be wound down, then there would have to be an implementation protocol to agree upon how the properties would be handled. Both the assets and liabilities were relevant.

The Department of Human Settlements was in the process of cancelling all the outstanding charged bonds and transferring free of charge to the occupants. There had been engagement with the Gasegonyana Municipal Manager, to get all the required documents. Within the next two weeks the process of collecting the outstanding documentation was expected to be finalised.

There were also engagements with the Phokwane Municipal Manager to get the outstanding documents. The initial target date to conclude all the issues was 31 October 2013, and although the NWHC was the on track to achieve the target date, it nonetheless cautioned that implementation protocols would be used if documentation was a challenge and ownership could not be confirmed.

Discussion
Mr Mokgalapa said the matter had been going on for a while. He asked if the NWHC still sent bills to the current occupants of the houses. He noted that in some cases ownership would have changed hands, perhaps more than once, and asked how this was resolved.

Mr Mokgalapa referred to the signature of implementation protocols by MECs, and he asked whether this was becoming a political leadership issue.

Mr Mokgalapa wanted to know the situation with Gauteng, because one municipality in Tshwane was still administered in the North West. He asked where – to the province or the municipality – the properties would be transferred if the NWHC closed down.

Mr Mokgalapa wanted to know how the process of verification would be done, and how long it would take. This had already been going on for far too long. Finally, he stressed that Gauteng was also a serious matter, especially the houses in Themba, Ga-Rankula, and Mabopane. The Committee did not want to create an impression that focus was only given to NC.

MEC Botes said previous attempts to establish contact with the North West province around these issues had not born any fruits. There were political issues. The recommendation was that when the Corporation established contact with the province, in order to expedite the process, it should be done via the provincial government. There were two municipalities involved here. The province could help the municipalities to fast track the identification of the beneficiaries.

He referred to the instance where an owner may have died, and said that here, it was expected that the family would become beneficiaries and would get the property. However, he sought the view of the NWHC on this, and especially what would be done if this did not happen.

Mr Botes sought clarity on the concept of new-stock, as it pertained to the 436 units in Ga-segonyana Municipality especially given that there was money involved.

Mr Botes also requested a confirmation of whether or not there was a similar structure, with the same name, that owned a building that currently housed offices for the Human Settlements Department in the NC.

Mr Obakeng Mongale, Acting Head of Department, North West Provincial Department of Human Settlements, commented that the observation by Mr Botes that there were political issues was indeed correct. In this province, the Department, through the MEC, briefed the provincial government on this matter continuously. The intention was to get the two Premiers to sign the protocols by the date set, and between now and the final date for the NWHC there ought to be further engagements, as that would also allow officials to be aware of what the NWHC was doing.

The Chairperson interjected and said officials could not just be involved at the tail end. The identification of properties was crucial. It would appear that there was a gap, if officials would simply be informed of a pending transfer of properties. She requested that there be strict adherence to the deadline.

Mr Mongale said the deadline was set by the provincial government for the winding down of the NWHC. However, it would not be ideal to wind it down before all the complex issues had been dealt with.

Mr Mongale confirmed to Mr Botes that the property he requested details on was not owned by the NWHC but by the North West Development Corporation, an entity that reported to a different department. That Development Corporation held houses for its staff members, but not for the community.

Mr Moller said he was hired to wind down the NWHC in 2012. The first issue to address was the reconsideration of the assets register. The process of winding down had been going on for too long. The Corporation had not been functioning since 2009. The main focus, since last year, had been to create an asset register and that was now successfully done. About 10 000 out of the original 70 000 units were still owned by the NWHC, across all the concerned provinces. The NWHC had not submitted financial statements since 2008, but these had since been prepared and submitted. The audit would affect the number of properties in the asset register.

The second matter that had to be addressed at the corporation was litigation. Cases that could be settled had now been settled, where it was not worthwhile to pursue further litigation, and this had saved a lot of money for the province. There were still many outstanding enquiries relating to the properties. The NWHC dealt with those, but the challenge was to difficult distinguish legitimate enquiries from those who wanted to benefit from this unfortunate situation. The Public Protector, Adv Thuli Madonsela, was also involved in the process.

He made the point that it would be difficult to attain clean audits, especially given the fact that the last audit resulted in a disclaimer. The audit had been divided into three phases. The 2008/9 financial year had been completed and corrections were being made to the 2010/11 year’s statements, which would be submitted next week. Because of the pending closure, the statements for 2013/14 were also being submitted now. There was a possibility that the deadline for the closure of the Corporation would have to be extended. The Auditor-General (AG) had indicated it would not be able to finalise the audits by November. He also made the point that it would not be possible for the corporation to close down if there were outstanding audit opinions. It was a reality that there could be a delay by a month, before a winding down Bill was submitted to the provincial legislature.

NWHC had looked at all the issues, had tried to deal with those issues, and had put contingency plans in place. There was no intention to drop the properties to other provinces where there might be problems. Transferring and disposing of properties would be done in a controlled manner, in terms of an implementation protocol.

The NWHC had utilised a map system, which was an electronic computer-based system to manage the instalment stock. The company was based in Pretoria, and it provided the NWHC with names of those people who tried to keep up with instalments. Statements were prepared, but there were discrepancies on the statements. As the NWHC was winding down, it had to notify debtors of this fact, and it had placed the relevant newspaper advertisements. The information had been sent to the owners, with the intention of getting them to come forward and indicate their outstanding balances. This appeared to be working, as a lot of the people were coming forward, especially in the Rustenburg area. The main purpose of the map statements that were sent out was to give people an idea of what was going on in their accounts.

There was also a formal task team that had been running for sometime. It was chaired by the City of Tshwane, and there were a number of issues being dealt with collaboratively, where assistance was required from the City. The Provincial Department of Local Government in Gauteng was also represented in the task team. Occupancy surveys were conducted in some of the areas in Tshwane. All the information was now available, with some being finalised only in July. The information was recent and accurate, and was also used by the NWHC against its assets register. Another issue that was being address with the City of Tshwane was the opening of township registers. This affected Tshwane, as there were nine or ten townships that had not been opened in there. It was the responsibility of the municipality to open those registers and transfer. He was comfortable with the progress made in Gauteng, because of the involvement of City of Tshwane. The NWHC had also identified a need to open a call centre in Pretoria, to deal with enquiries. The volume of enquiries had increased and Rustenburg was too far away. The City of Tshwane had been approached, and was looking into the possibility of opening an office in Ga-Rankula to assist with enquiries.

Mr Moller said that when someone had died, the NWHC could not simply convert the Deed of Grant into some else’s name. This was an area where the High Court and the executor had to be involved. The NWHC could only provide the beneficiaries with all the necessary documentation, so as to facilitate the transfer process of such a property to the correct beneficiary. The NWHC had to follow the legal process. In Rustenburg, about 60% of the recently transferred titles were related to this issue.

In regard to the Mothibistad new stock, he confirmed that the NWHC would look into the matters and would assist the beneficiaries who qualified for subsidies, to apply for them, and if they did qualify, the subsidies would then be used to settle the balances still standing against their names. NWHC was hoping to transfer all the properties, but if it became impossible to do the provincial government would consulted for a final decision in that regard.

North West cross-border rectification
Mr Mongale drew the Committee’s attention to some changes that had been made to the printed copies of the presentation, pointing out some additions to the section that spoke to the proposal that the North West had made on how it hoped to take the process of rectification in the NC forward.

He noted that there were over 2 500 units that were supposed to be rectified, and 1 336 of those had been rectified. He detailed the breakdown of the number of units that were rectified, by region. Recently there was a consultation with the MEC to determine why the target was missed.

It was discovered that the quantity surveyor who did the quantification based the budget on a number of units less than those that were planned. The province worked with the budget that it had, believing that it would cover all 2 500. The North West nevertheless accepted the responsibility of what happened. During the current financial year the province did not budget for rectification.

The North West would like to undertake the process of quantifying the work that still had to be done. He pointed out that not all of the remaining houses had to be rectified. Some sites were still vacant, on which houses should have been constructed. Once the work had been quantified, NW province would then transfer the budget to the NC province, to cover all the work that had to be done. If the NC was not comfortable with carrying out the work, NW would then undertake the work. The intention was to transfer the correct amount to the NC.

Discussion
Mr M Matshoba (ANC) sought clarity on the size of the vacant stands, where there was no top structure.

The Chairperson clarified that the Member sought to establish the financial implication of the North West having to rectify in terms of the current subsidy, which was different to specifications in 2006.

Ms Borman sought clarity on what was being quantified, especially given that work had been done on 1 336 units, out of 2 500. She asked if the rest of the work would be budgeted for completion in 2014.

Mr Mongale replied that quantification was not only about the quantity of the houses, but also the extent of work to be done in a house. This would go hand in hand about what had been raised earlier, that DHS would be in charge of rectification. This would not be a process that NW would undertake on its own.

Ms Borman enquired if this was not tantamount to creating extra work. The houses had already been identified, and now government had to go back and quantify again. This did not make sense.

The Chairperson pointed out that the NC was not part of the team that quantified the number that had been given originally. These provinces should come together and determine the correct statistic, so that the Committee could get a consolidated figure. In addition, it was not desirable that NC should later be able to turn around and claim that more work had not been done.

Mr Mongale replied there was a factor of time and value of money that should be taken into account, compared to the last time verification was done.

MEC Botes commented that there was progress, but suggested that a way be found to accommodate rectification in the current financial year. Government was not at this stage even half way through the financial year. The national Department should find a way to allocate the money through the grant funding in the current year.

He indicated that the NC would not be able to start the project by next year, unless there was certainty around finances. Officials could then approach the affected communities with project plans, and convince them that something would be happening. People wanted to see the project plans.

MEC Botes also requested that rectification be done by experienced contractors. One contractor who had been involved in the rectification had ended up creating more problems in the NC. Although he understood the imperative of empowering the smaller contractors, it was important that government opt for experience contractors this time around, as rectification of a partially-complete project was not an ideal situation. He said he was satisfied with the commitment from the North West.

Mr Mongale agreed with MEC Botes on the need to appoint competent contractors. He said half-built houses would form part of the process, as they were a project that the North West needed to have carried out.

The Chairperson said the Committee had, a while back, requested an audit of the affected housing projects. Such an audit would indicate the exact number of houses that had to be rectified and how much that kind of work would cost. The two provinces should have sat down and decided on the actual number of houses that needed to be rectified. She said that within two weeks, the two provinces should meet and prepare a comprehensive report on this aspect.

Mr Mokgalapa commented that rectification should happen concurrently with the transfers. He also asked if the transfers would be to the beneficiaries or to the province where verification of the beneficiaries and the eventual transfer would be carried out. He asked if it was correct to assume that the same process followed in the NC would be adopted for Free State and Gauteng.

Mr Mongale replied that the Free State was not at all affected. In Merafong, Gauteng, the approach was to transfer, rather than doing work on their behalf.

Ms Matlatsi said DHS needed to have a determination of what needed to be rectified, and what ought to be placed as a top structure. There was a further problem of vandalism and some units deteriorated as a result of vandalism, so there was a need to determine the extent of rectification there. It was correct that when the Department rectified, it used the current subsidy quantum, and that brought with it serious budget implications.

DHS took the responsibility of managing the rectification programme, but according to the funding model, money would still go to the province. A decision was taken for this current financial year, at MinMEC, that the DHS could not take a decision, but then not implement. Few provinces had costed the rectification and some actively decided not to. Those who had budgeted for rectification were given a mandate, and the national DHS had the responsibility to ensure that rectification happened. DHS had discussed options with the NC, and indeed there were some serious financial implications.

There were various issues that the provinces had to agree to, pertaining to transfers and liabilities. Should NC accept the transfer, it should accept the liability as well. DHS would still be involved in the process, and would not walk away. It was hoped this would be sorted between the provinces.

Where the provinces said that they had not budgeted for this issue in the current financial year, there were two solutions. Firstly, they could use the process of the adjusted budget to request money from their provincial legislatures during this financial year, and then submit their analysis. If that failed, another available option would be to consider doing the rectification in the next financial year, although this would not be ideal and there were still some processes that could be followed in this financial year. It was likely that the budget for the year could not be entirely used but it was possible that the business plan could be rearranged.

The Chairperson interjected and pointed out that government was still on its way to the Medium Term Budget Policy Statement (MTBPS). She asked why the Department could decide before that time came? This would be the Committee’s recommendation in the Budget Review and Recommendation Report (BRRR).

Ms Matlatsi replied the suggestion had been noted.

Report on Committee’s recommendations
The Chairperson said the Committee hoped that the province had done enough to respond to issues that the Committee observed in its oversight in June of 2012.

Mr Mongale requested that the province be allowed to scrutinise the Committee’s recommendations, and that it be allowed time to deal with them adequately. The report that had been prepared only addressed a summary of the Committee’s recommendations. A detailed report on all the issues had only been received on the previous Tuesday, so his presentation did not cover all issues comprehensively.

Members agreed to the request and said an opening would be found during the BRRR report process to accept the presentation on progress.

She asked that the province prepare the necessary supplementary report within the next two weeks, and would be given a date when it could present to the Committee.

The meeting was adjourned.