Free State & Northern Cape Human Settlements Departments, Mangaung Municipality on their 2015/16 plans and targets

Meeting report

The Chairperson welcomed everybody and said this was a follow-up on the previous meeting held with the provinces. After today, the Committee only had one outstanding engagement with the Eastern Cape Province.

Mr Neville Chainee, Deputy Director-General: Strategy and Planning, Department of Human Settlements (DHS), said the Department had asked the provinces to revise its targets in respect of the commitments made by the Minister on the 1.5 million opportunities.

Free State Department of Human Settlements on the plans and targets for 2015/16

Mr Thabiso Makepe, Chief Engineer, Free State DHS, gave a summary of the revised business plan which showed among others the Incremental Housing programmes and Social and Rental Housing. In terms of the Incremental Housing programmes, 3 609 houses were planned to be built in informal settlements and 3 686 sites would be planned. This was estimated to cost about R705.6 million which was 67% of the total annual budget of approximately R1 billion. Including all programmes, the province planned to deliver 4 849 houses for the 2015/16 financial year. The budget allocation per district showed:

-Mangaung, R297.1 million (28%)

-Thabo Mofutsantyane, R267.6 million (26%)

-Lejweleputswa, R234.1 million (22%)

-Fezile Dabi, R181.5 million (17%)

-Xhariep, R76.7 million (7%)

Mr Makepe gave an overview of the Mixed Housing Developments which showed the relevant municipality, the scope of work, status quo and the number of units to be delivered. The presentation included a worksheet that gave a detailed outline of all the projects. In terms of township establishment, the presentation showed the districts with the status of the applications and the expected dates of completion.

Mr Nthimotse Mokhesi, HOD, Free State DHS, said it was a revised business plan in terms of the targets and to scale down on certain issues. The rectification the province was currently doing did not relate to poor workmanship, but rather to pre-1994 units. This affected Mangaung mostly and most of the houses were very old with people still living in these houses.

Mangaung Municipality on the plans and targets for 2015/16

Ms Sibongile Mazibuko, Mangaung City Manager, said Mangaung was a new metro and the biggest challenge had been the bulk supply and thus the priority for the past three years had been on bulk development. Fortunately the city owned most of the strategic land in terms of planning unlike other metros and the 28 informal settlements would be moved to planned land and project development. The metro had also greatly improved its financial stability.

Mr George Mohlakoane, Head: Strategic Projects, Mangaung, said the metro had spent 55% of the adjusted Urban Settlement Development Grant (USDG) of about R72.7 million as of April 2015. This was historically consistent since expenditure tended to accelerate toward the end of a financial year. The presentation showed a detailed project process report where the rehabilitation of the Freedom Square Sport Centre the only project at risk was of not being completed on time. Graphics and pictures of some of the projects supported the status report. The Airport Node was one of the key Catalytic projects within the city. The challenge was that all of the tender applications were non-compliant and had to be re-advertised and it delayed the implementation of the project. The project was currently in the adjudication of the applications phase and someone would be appointed soon. In terms of land acquisition and informal settlements upgrading and based on the Informal Settlement Upgrading Strategy (ISUS) that was done together with the Housing Development Agency (HDA), three informal settlements had been prioritised for the current financial year. Contracts had been awarded and work was taking place on the ground. There were projects underway on solid waste, roads, sanitation and water which were ultimately where the bulk of the allocations were spent.

The 2015/16 USDG of R693.8 million would be used as follows:

-Roads and Storm water (32%)

-Sanitation (26%)

-Water (21%)

-Land development (7%)

-Informal settlement upgrading (6%)

-Social amenities, which constituted sport facilities, parks and other public places (5%)

-Waste and fleet management (2%)

Even though informal settlement upgrading was reflected as a small portion, the amount of money spent on bulk services ensured the unlocking areas of development and that the informal settlements had access to basic services. Major land developments were undertaken in conjunction with other stakeholders and Mr Mohlokoane gave an overview of such projects such as hillside View, the Airport Node, Lourier Park and Brandwag Social Housing. Hostel upgrading would see the completion and occupation of 836 units. The approved ISUS was in place and it was clear what needed to be done in each of the 28 informal settlements. It also showed the MTSF priority annually up to 2018/19 which mainly focused on the provision of water, sanitation and roads and storm water infrastructure. Apart from the ISUS, HDA was also assisting with the development of the Resettlement Plan and facilitated land transfer in Thaba Nchu. Land invasion incidents had occurred in some areas and the metro was currently developing an Anti-Land Invasion Plan. Bulk infrastructure programmes such as the Maselspoort Pump Station, the Longridge four kilometre pipeline and the new North-Eastern Waste Water Treatment Works supported mega projects. Construction on the North-Eastern Waste Water Treatment Works had commenced in February 2013. It was a multi-year project that was 95% complete. It was estimated that approximately 45 000 household would benefit from the project in the long term and the second phase of the project would continue in 2015/16. R106 million was allocated for the upgrading of roads in Mangaung, Botshabelo and Thaba Nchu.

Mr Mohlokoane said the main objective was to eradicate approximately 60 000 pit and bucket toilets in Botshbelo, Thaba Nchu and Bloemfontein. In order to upgrade these areas to waterborne service, funding of about R3.2 billion would be required. The electricity connection targets see that 3 029 households had been provided with connectivity for 2014/15 and a further 2 500 households were targeted for the 2015/16 financial year.

Discussion

Mr N Capa (ANC) referred to slide 10 of the Free State DHS presentation. He asked if it was the status of the projects related to township establishments were correct. He asked whether the Auditor-General findings for the metro related to the use of consultants and he asked why the mining towns in the Free State had not been mentioned.

Mr Mokhesi confirmed that it was indeed the status of the projects and he indicated some of the delays were as a result of the reliance on the Department of Public Works’ input the projects needed. The province was spending 22% of its budget allocation in mining towns.

Ms Mazibuko replied that the metro had reduced their audit findings from a disclaimed audit opinion for two years to an unqualified audit opinion with few matters of emphasis. T and the metro also reduced their use of consultants considerable, especially the use of financial consulting where the function was now done in-house.

Mr S Gana (DA) asked what the rectification of a house entailed. The Free State DHS spent on average about R330 000 on the rectification of a house, but the rectification process did not require land to be bought. He wanted to know what consumed the bulk of the money in the rectification process. In the business plan summary of the province under the item ‘Emergency Housing Assistance’, 18 houses were budgeted to cost R25 million and he asked what type of houses it would be. The summary also showed it would cost R108 million to convert or upgrade 100 community residential units (CRUs) and again he wanted to know what types of houses it would be. The presentation by Mangaung municipality showed that no money was essentially spent on informal settlements. He asked what the rationale was for spending the USDG on the renovation of two stadiums. The Minister recently clarified what the bulk of the USDG should be spent on, but very little of that grant was actually spent on informal settlements.

Mr Mokhesi said the province was spending from R179 000 up to R200 000 on rectification per unit. In some instances that amount would include demolition of a house as well as providing temporary shelter. CRUs were the conversion of old hostels into rental accommodation and ordinarily that would be transferred to the municipalities.

Mr Makepe replied that a lot of the expenditure of CRUs talked to the amount of work that had to go into the foundations and the first floor of the units. Emergency Housing Assistance was budget for by putting a certain percentage of the grant (approximately 2%) aside and the amount of houses under that budget was an average of what the province historically had to build in emergency situations.

Ms Mazibuko referred the Committee to slide 14 of the presentation that showed the megaprojects in terms of informal settlements and the construction currently in progress. One of the projects would yield close to 1 500 units. There were two priority projects in terms of rental stock.

Ms P Ntobongwana (EFF) asked for clarification on what was going to be happening with the incomplete houses in Botshabelo.

Ms Mazibuko replied that the metro was working with Free State DHS to complete the houses in the Botshabelo area.

Ms L Mnanga-Gcabashe (ANC) said one of the core functions of DHS was to eradicate informal settlements. It was concerning that there was no formal plan to deal with the eradication of informal settlements and she asked if DHS received these reports before it was forwarded to the Committee. In terms of land acquisition, she asked how the metro would be spending the money since there is very little time left until the end of the financial year. The report said the metro expected to spend 95% of the allocated budget by the end of the financial year and almost half the allocation was left to spend in the last few months of the year. She clarified that three stadiums were being renovated using the USDG and she asked if Free State DHS had any comment on the metro’s spending of the USDG. She asked what was being done in terms of title deeds, because there were backlogs. The numbers differed on the reports submitted to DHS and the presentation.

Ms Mazibuko replied that Mangaung metro had actually yielded this year from the “beating” the metro had been receiving from the Committee and from the Department. The metro had reduced the spending on social amenities and the bulk of the expenditure for the next financial year had been redirected to the provision of basic and bulk services. Informal settlements in Mangaung were located where there had been no access to bulk services and construction needed to start at the point of creating those services.

Mr Mokhesi replied that Ms Mnanga-Gcabashe had the original report the province submitted, but DHS had since asked provinces to revise their targets to speak to the directives of the Minister.

The Chairperson said how the USDG was spent was a common concern. The bulk of the USDG should be spent on bulk infrastructure, land acquisition and service delivery. The rectification of pre-1994 stock should have been aligned to the title deed programme, because there was a serious backlog on title deeds in terms of the pre-1994 stock. There were no special programmes mentioned that involved the youth and women and it important that the province committed to such programmes. She also wanted to know what Free State was doing to support the plan to build 5 000 house for military veterans.

Mr Mokhesi said the province had taken the decision that title deeds were part and parcel of the delivery of a house. The backlog was being addressed and the province had been working with the Estate Agency Affairs Board (EAAB) together with DHS. There was a provincial steering committee in place that focused exclusively on the title deeds backlog and it had been decided that title deeds should be issued on sites as well as on structures. Expenditure on housing contracts would show that 54% benefited women, but the province was struggling to incorporate the youth into its programmes and have been in engagement with the National Youth Development Agency (NYDA) for assistance. The province was supposed to build 220 houses for military veterans and the first stage would commence in Mangaung where the municipality had provided sites for the houses. Contractors for the project had already been appointed.

Mr Chainee said the Department had indicated to Free State DHS and Mangaung municipality how important informal settlements were. The business plans were then revised, but it was still a work in progress. Mangaung had unique challenges in terms of bulk services and spatial dislocation, but they also understood that it was time to start yielding numbers. The Committee would be informed of the progress made on the specific projects.

The Chairperson said the Committee would be monitoring the quarterly reports on the progress closely.

Northern Cape Department of Cooperative Governance, Human Settlements and Traditional Affairs (COGHSTA) on the plans and targets for 2015/16

Mr Chainee said the Department had asked all the provinces, including the Northern Cape to revise their business plans, especially to address specific issues under informal settlements.

Ms Gladys Botha, HOD, COGHSTA Northern Cape, apologised that the province had not been able to attend the initial scheduled meeting.

The Chairperson asked that an explanation be forwarded to the Committee in writing.

Ms Botha said COGHSTA Northern Cape was responsible for driving Outcome 8 which was the provision of sustainable human settlements and improved quality of life. The sub-outcomes were:

-Adequate housing and improved quality living environments;

-A functionally equitable residential property market;

-Enhanced institutional capability for effective coordination of spatial investment decisions;

-Human Settlements Development Grant (HSDG)

COGHSTA Northern Cape received the smallest provincial allocation, R380.4 million for 2015/16 which would increase to R427.3 million for 2017/18. The R380.4 million included a R50 million allocation for the mining towns of Ga-Segonyana (R13.6 million), Tsantsabane (R22.1 million), Gamagara (R9.8 million) and Kgatelopele (R4.5 million). Provincial programmes amounted to R50.9 million overall and it included 105 houses to be built for military veterans and 96 houses to be rectified. A detailed breakdown of the different projects per region showed the planned sites, services and houses to be built. The Frances Baard projects 2015/16 amounted to R55 million of the allocation with 217 planned sites, 342 services and 286 houses to be built. Namakwa projects (R10.6 million), Pixley Ka Seme projects (R45.4 million) and the Mgcawu region projects (R40.4 million) similarly showed the planned sites and the targets for houses to be built. The 2015/16 Catalytic projects would be focused in the Sol Plaatje municipality and it was priority projects that constituted R101 million of the allocation with 380 houses to be built.

Ms Botha highlighted the challenges in achieving the targets as the availability of materials, especially rural areas and the procurement capacity of municipalities. Other challenges included geotechnical conditions in certain areas, integrated development in mining areas, bulk services that related to water, sanitation and electricity, the rectification of dilapidated pre-1994 houses and the transfer of state land.

Discussion

Ms V Bam-Mugwanya (ANC) said there was an allocation of R96 million for rectification but it did not show how the money was to be spent.

Ms Iketletso Mogodi, Chief Director: Human Settlements, COGHSTA Northern Cap, clarified that 96 houses would be rectified at the cost of R11 million.

Mr H Memezi (ANC) asked that the allocations in terms of the mining town projects be clarified. The Committee appreciated the challenges experienced by the province, but he asked what plans were being implemented to address such challenges, especially in terms of the geotechnical conditions, the dilapidated pre-1994 houses and the procurement capacity of municipalities.

Ms Botha said the Department allocated R50 million to the province for mining town projects and COGHSTA Northern Cape topped it up with about R13 million to augment some of the projects. There were some solutions to the challenges in place, but it would necessarily address the challenges completely. Municipalities submitted their plans directly to the Department and to Treasury and the funds were directly allocated to municipalities. The province also had the challenge of bringing cooperative governance and human settlements together and a forum had been established to address the autonomy of municipalities.

Ms Mogodi replied that there was not a final solution in place to talk to dilapidated houses, especially in the Namakwa region. Beneficiaries had been complaining that the province was building houses, but the pre-1994 houses were basically inhabitable. COGHSTA Northern Cape was engaging with the Department and the National Home Builders Registration Council (NHBRC) to see how these beneficiaries could be assisted. The province tried to have geotechnical studies done in all areas, but a desktop study had been done through the NHBRC where the Council for Scientific and Industrial Research (CSIR) had been roped in to assist with identifying problematic areas. This desktop study identified that it would cost roughly R68 million to address most of the issues, but the province could not really afford to pay that money from the national allocation. It would considerably affect the amount of houses delivered for that financial year. It was not really cost effective to implement the geotechnical investigations in the ‘per project’ approach the province was currently using, but he University of the Free State (UFS) had contacted the Department to find a way to standardise processes, but it also required a budget.

Ms Mnanga-Gcabashe said it was expected that the province would give some information on the current financial year and the Northern Cape Province was the only province that had not given the Committee a report that talked to the 2014/15 financial year. That report was in effect the Medium Term Strategic Framework (MTSF) and it would have given the Committee an idea if the province was meeting its targets in terms of the numbers of the outputs. It made it difficult to assess how the province was performing and the province had also not submitted a report to DHS that reported on its targets. She asked for the report to be submitted within the week. The title deeds issue needed to be dealt with, because it was not allowed to spend government money on private land. This became an issue in KwaZulu-Natal and provinces should be aware that it was not the right approach. Title deeds should not be issued before the structures had been completed.

Ms Botha replied that the terms of reference for this engagement was that COGHSTA Northern Cape should present the budget under the business plan for 2015/16. The 2014/15 report would be sent to the Department within the next five days. In the past the province had been in the situation where title deeds were issued before the top structures had been built, but that had been stopped for at least the past three years. Title deed holders would transfer title deeds before the structures were completed and the province would be challenged retransfer the land.

The Chairperson noted that although Northern Cape Province got the smallest allocation, the province should show if that money was spent. She commended the 105 houses planned for military veterans, but she asked what targets focused on women and the youth. She asked what kind of relationship the province had the Housing Development Agency (HDA).

Ms Botha said 100% of the budget had been spent. The province was committed to the upliftment of youth and women and although it was not reflected in the presentation, 30% (women) and 10% (youth) orientated projects were integrated within the plans of the province. The MEC in his budget speech had made this commitment and he had also committed that the women in the Govan Mbeki awards category would be prioritised for appointment on projects. The progress of the youth and women oriented projects would be highlighted in future engagements with the Committee.

Ms Mogodi replied that HDA assisted COGHSTA Northern Cape with the transfer of land where the primary challenges had been with the transfer of state land and where land had been held in parastatals. HDA also assisted the province in its interactions with the Department of Public Works (DPW) through regular meetings to discuss the properties that needed to be transferred. This also affected the title deed backlog, because houses had been built over the years on land that had not been transferred to municipalities yet.

The Chairperson thanked everyone for their input and the meeting was adjourned.