Distressed mining towns: Inter-Ministerial Committee update; Department of Human Settlements 1st quarter 2015/16 performance

Human Settlements, Water and Sanitation

08 September 2015
Chairperson: Ms N Mafu (ANC)
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Meeting Summary

The Department of Human Settlement presented their first quarter report. They had achieved 43% of their targets and spent 18% of their allocated budget. The low expenditure was mainly because of the high vacancy rate. Their main challenge was a lack of technical and operational capacity hindering their monitoring function over the provinces and municipalities. They had received the Minister’s approval for a revised structure to counter this challenge.

The Committee was concerned about the under-performance of some provinces, especially Gauteng and Limpopo, because this had been ongoing for many years. Members called for intervention from the national Department. The biggest concern was with Limpopo’s 53% overspending of the development grant, which was especially worrying because they had failed to deliver the targeted units. The Free State province was under the spotlight for their costs. For the first quarter, they had delivered two units at a cost of over R2 million. The rectification expenditures had become runaway costs too, with Free State again spending an average of around R1 million to rectify a unit. The Committee wanted the province to be investigated. They would like the under-performance and under-spending to be addressed, and for the provinces to adhere to their allocated budgets.

The Inter-Ministerial Committee gave an update on the distressed mining towns interventions. They revealed that there had been a lack of planning and alignment between the different stakeholders, but they were working on it. In Marikana, Lonmin had donated 50 hectares of land for the erection of approximately 2 600 units. There was an issue of qualification, as miners did not qualify for social housing because their wages were above the qualifying threshold. This had resulted in tension in the community and illegal invasions of completed units. Mineworkers had been under the impression that they would benefit from the project. The Committee had strong opinions regarding this matter, saying the team should have foreseen the situation. A study tour to Australia had revealed that mines there took responsibility for their workers’ accommodation and well-being. The team was negotiating with the mines to have employee-subsidised housing, as well as piloting a rental option project.  

Meeting report

Department of Human Settlements presentation

Mr Neville Chainee, Deputy Director General, Department of Human Settlements (DHS) apologised for the documentation confusion that had resulted in the presentation being sent late, to which Mr SM Gana (DA) and Mr Sithole (IFP) expressed their great dissatisfaction.

He started by presenting the first quarter non-financial performance of the DHS, and said that they had dealt with most of the issues in the overall non-financial performance report already submitted earlier. Of the 51 targets set for the period, 22 had been achieved and 29 had not been achieved – a 43 performance level.

Branch expenditure of the DHS was divided into six branches: Administration, Human Settlements Delivery Frameworks, Human Settlements Strategy and Planning, Programme Management Unit, Office of the Chief Financial Officer, and the Office of the Operations Officer. The expenditure for the term was 18%. The under-performance was due to the vacancy rate that the Department was attending to.

The Department was involved in a number of outreach programmes, including a help desk and information desk for individual queries. Municipal and provincial departments of human settlement were partners in these initiatives.

The HSD policy on community based housing and human settlements cooperatives was in the final stage of submission. The self-built methodology would be implemented in five provinces. So far, oversight visits and capacity development workshops had been conducted in Kwa-Zulu Natal, Western Cape and North West.

The DHS had delivered 7 362 serviced sites and 21 988 houses during quarter one and created an estimate of 11 235 employment opportunities, of which 5 951 had been direct, 927 indirect, and 4 357 had been induced, in both serviced stands and top structures.

The current challenges faced by the Department were a lack of technical and operational capacity for programme and project planning and implementation monitoring, a lack of funding for the appointment of technical capacity for programme and project planning, and implementation monitoring. This was the reason for the department’s inability to hold provinces accountable for under-performing. Other challenges were poor levels of commitment to make medium term strategy framework (MTSF) targets at all spheres, inheritance of poor programmes -- or no programme -- and project pipeline planning, poorly aligned structure to roles, responsibilities and expectations of the National Department, and the need to improve regulation and compliance.

Mr Chainee said the Minister had approved a revised structure for the activation of necessary processes which would allow the Department to correct and mitigate the current technical and regional capacity constraints. They had made a submission to National Treasury to allow for operational and grant funding reallocation to mitigate operational capital budget under-expenditure. The Department had also made submissions on the draft Division of Revenue bill and framework to improve expenditure outcomes. Lastly, a more robust and interrogative pre- and post planning and monitoring protocol with its entities, provinces and municipalities had been initiated.

Mr Nyameko Mbengo, Acting Chief Financial Officer (CFO), DHS, said the total budget allocation was approximately R30.9 billion, of which R4.6 billion had been spent across the four programmes. This translated to 15% of the targeted expenditure. The expenditure per programme was Administration (19% spent), Human Settlements Policy, Strategy and Planning (19%), Programme Delivery support (15%), and Housing Delivery Finance (15%).

The allocated budget for operational expenditure had been approximately R170 million, and R124 million had been spent at the end of the first quarter. 73% of the budget had been spent, making it the lowest in history.

Transfer payments were subdivided into grants, which had a R28.8 billion allocation, entities, with a R1.3 billion allocation and Departmental transfers, with a R9.8 million allocation. The overall expenditure had amounted to about R4.4 billion (15%), which was the expenditure of one grant – the Human Settlements Development Grant. The other grants had since been transferred to municipalities and transfers would commence again in the new financial year. Only two entities had claimed payments -- the Social Housing Regulatory Authority and the Housing Development Agency. The Departmental transfers had had an UnHabitat allocation of R1.1 million, but R 1.2 million had been spent due to the fluctuating exchange rate.

Mr Mbengo detailed the Human Settlements Development Grant Expenditure Performance. It had had an allocation of approximately R18.2 billion for quarter one. Transferred funds had amounted to approximately R4.3 billion and provinces had spent about R3.7 billion. R624 million remained unspent at the end of the first quarter. Two provinces had overspent in quarter one -- Limpopo by 53% and North West by 12%. Gauteng was the worst performing province by spending only 11% of their total available expenditure. The targeted spend had been 21% of total budget for the first quarter. Gauteng was the Department’s main concern, as they received the biggest chunk of the allocations (R4.9 billion) but had the lowest performance.

The annual delivery targets had been set at 63 866 serviced sites and 103 980 top structure units, making a total of 167 846 units for the year. Provinces had delivered a total of 28 464 sites. In relation to the targets, the sector had delivered 10% of the sites targeted and 21% of the top structures targeted, and had spent 24% of allocation. Free State and Limpopo had not produced service sites at the end of the quarter and Gauteng had only delivered 2% of the target. KwaZulu-Natal had delivered the highest number of top structures at 34%.

There was R1.1 billion of investment in work in progress. These units were under construction and not included in the number of units and sites serviced. Some were at the foundation phase, others at roof level and others in the finishing touches phase. There were 38 620 units in progress. It was important to have an indication of these units, because looking at the number of units delivered versus the expenditure in isolation was misleading. Money had been spent on work-in-progress units, but they were not completed yet, making the total actual expenditure compared to units completed a misleading figure. This further information was to show where else the money had gone. Units that were work in progress showed how far from the annual target the Department actually was.

He presented a snapshot of the Finance Linked Individual Subsidy Project (FLISP) programme that was under close monitoring. FLISP had a funding allocation of R220 million and annual targets of 2 000 sites and 1 782 top structure units. In quarter one, the Eastern Cape had delivered 52 top structure units at a cost of R 2.7 million. KwaZulu-Natal had delivered 52 at a cost of R12.4 million and the Western Cape had delivered 80 at a cost of R 7.2 million. Most provinces had not reported on the programme, although this was the first round of report requests. Mr Mbengo admitted that FLISP was under-performing.

6 893 units were targeted for rectification, and 1 280 units had been done at a cost of R153 million. Limpopo, Mpumalanga, Gauteng and Western Cape had not spent any of their rectification budgets. Each province had been asked to provide a breakdown of municipalities and number of units delivered. The aim was to try to dig deeper into the programme to get more information on how they allocated their funds. The Department had not received information from all provinces but they hoped to get more information in future to gain a better understanding of allocations.

The operational capital programme (OPSCAP) had a R805 264 million allocation, and the municipalities had spent R190 132 million by the end of quarter one. Limpopo had not spent any of its allocated budget, while other provinces had been spending their allocations too fast and had been cautioned by the Department. For example, Free State had set aside R 52 million and had spent R23 million, while the Northern Cape had set aside R90 million and spent only R 10 million.

In the last quarter of the municipal financial year, R10.8 billion was available for the Urban Settlements Development Grant. Actual expenditure had amounted to R9.9 billion (91.8%). The municipal expenditure varied, but only eThekwini municipality had spent 100% of their budget, Ekurhuleni had the highest under spending of 26.6%. Metros that did not spend had roll-overs from the previous year, meaning the new year had roll-overs and a new allocation. This would continue to be the case unless they came up with new ways to do allocations.

Mr Mbengo said the rest of the presentation was a breakdown of the Buffalo City, Nelson Mandela Bay, Mangaung, Ekurhuleni, City of Johannesburg, City of Tshwane, and Ethekwini municipalities financial and non-financial performance.

Discussion

Mr K Sithole (IFP) started by commenting that he was concerned by the Department having so many officials in acting positions. He wanted to find out what remedies the Department had to help under-spending municipalities like Gauteng and Ekhurhuleni. He said the under-performance of Limpopo province had been going on for ten years -- they had even had money shifted from their allocations to other provinces -- and he wanted to know what the Department was doing to help them.

He turned to the grant transfer payments that had been transferred but up to 79% had been unspent. He asked what mechanism the Department was employing to remedy this. The current situation could be described as fees dumping. He asked for clarity regarding the revised structure that had been approved by the Minister, and what the strategy was behind it.

Mr S Gana (DA) expressed his disappointment at the late submission of the presentation. The Committee had raised the issue of the report not being accurate, and the corrected presentation had been received the day before the meeting, and the Members needed time to go through it. It made preparation difficult, given the travelling schedules of the Committee Members.

He commented that the Department had a challenge of not being able to monitor expenditure by provinces. He asked that they give an indication of how they were currently monitoring expenditures.

He asked what had happened to the money not spent by Gauteng province. He noticed that every time the Department presented, they reported that Gauteng had not spent their allocation, but they did not know where their unspent money went to. Other provinces had their unspent money transferred to other provinces.

He asked if the rectification figures were not communicating the units that were work in progress. He said it must be celebrated that the Eastern Cape was spending, although the presentation was not indicating why they had taken 25% of the total allocated budget. He asked if they were just pushing numbers then rectifying the same units in the following financial year. It was worrying. He believed the budget for rectification was high and in his opinion, should be done away with.

He focused on the Free State, who said their rectification was different to other provinces. Their delivery target had been 508 units, and they had delivered 29 units at a cost of R25 million. They had spent almost R1 million to erect each unit. It seemed to him that the province did not plan to do anything for most of the year, and then spent a lot to do a few units. He had raised this concern before and he wanted to know what kind of mansions the Free State province was building. Ekurhuleni had been reflected well in report, but he knew from the oversight visit that there were deep problems in Ekurhuleni and that it was in a sorry state.

Mr N Capa (ANC) asked if the Department had made the Gauteng provincial offices aware of their poor performance and if there was an indication whether they understood these concerns. He asked what their response was, if they were willing to respond.

Regarding FLISP, where there are only three provinces delivering, he asked whether there were any implications with National Treasury on the roll-overs.

He welcomed the fact that the challenges had been accompanied by recommendations, but asked for clarification on what the effected changes would be.

Lastly, he asked if the poor expenditure of provinces would have an impact on their allocations for the following financial year.

Ms T Gqada (DA) said she regarded the lack of capacity as a Departmental challenge. The capacity grant meant for metros had been withheld. A written communication had been circulated in August 2015. The metros were not performing and they were lacking capacity. She asked what the reason was for withholding the grant. What was the money going to be used for, and how much was it? She requested a report on the reason.

The Chairperson added that the allocation was R100 million.

Ms L Mnganga-Gcabashe (ANC) said when a province over-spent by 53%, like Limpopo had, it could not go unchallenged as they were spending what they did not have.

She said she was glad that the DHS had acknowledged that FLISP was underperforming, but wanted to know what they were doing about it. She would like the Department to enforce the requirement that the provinces report on FLISP.

She turned to the rectification figures for Free State, where two houses had been worked on at a cost of R2 million. She said it required an investigation and a report from the provincial office, and if the province did not investigate, the national office must initiate it -- but heads must roll. She said one cannot spend R1.2 million on repairing a house of not more than R150 000. She wanted the money accounted for, as well as how much was spent on which part of the house to see how much was spent on repairing what.

Lastly, for the Work in Progress report, she wanted to know if windows, doors, bathroom fittings, and plumbing were included under finishings.

The Chairperson said the Department had reported on Gauteng’s under-spending before. In their previous reports, they had talked of intervention programmes, but were not mentioning them now. She asked for clarity on the matter. She said Limpopo’s overspending did not match their output -- they had delivered zero serviced stands and not many houses. She asked what the additional 53% had been spent on, because it would be understandable if their deliveries were high. They had jumped from under- to over-spending, and she suggested that they could be over-compensating because money had been taken away from them before.

The Chairperson said it was worrying that Gauteng was not reporting on FLISP when it was supposed to be a high priority in the programme. She asked what interventions had been given to Gauteng, as she knew it was where the programme was most needed. She noted that Gauteng was under-performing on both grants, and asked what the problem was. She wanted to understand why Ekurhuleni was in a sorry state. She would like a response on the interventions, rather than pumping in more money, and an explanation on why the capacity grant had been was withheld.

Response

Mr Chainee conceded that Gauteng was spending but did not deliver. The Premier had appointed a task team to implement recovery and turn-around strategies. The Acting Director General was part of the task team. There were issues of alignment between provinces and municipal offices to coordinate and align their funding. They would take it up with the premier to take the necessary action. He also saw a problem of self diagnosis in the provinces, but would come back with a full report at the Committee’s earliest convenience.

He said it was important to acknowledge that Limpopo was once the top performing province, with a clean audit and the Govan Mbeki Award for performance about six years ago. They were coming out of a bad period. The 153% expenditure was because they had activated their accruals as of 31 March for work in progress. Their accruals from roll-overs had been approximately R308 million. For this year, they had reported that Limpopo had delivered 685 sites, and houses excluded the 3 177 units promised from the roll-over period. The Department did not know if they would they make good on their promise. As a Department, they were concerned about the province’s inability to keep within allocated budgets.

He agreed that there was a value for money issue. The provinces received all the money but were not delivering the expected numbers and not utilising the money within the allocated quantum. A directive was being issued about their spending. In the Free State, the concern was not only with rectification. The Department had written to them asking about community residential units costing R1 million a unit.

He also agreed with Mr Gana that rectification was one of the programmes that had to be closed down and the MECs must in future make applications for rectifications. However, sometimes the units must be demolished and removed before being rebuilt, which resulted in higher costs.

The Department certainly could do better in monitoring and evaluation, and although they had a robust system, it could be improved. They had a chief directive and had requested monthly reports from provinces going forward.

To deal with the lack of capacity, the Minister had approved the revised structure to allow for regionalisation. They had asked for regional teams to assist with the planning, monitoring and evaluation functions. This would allow for more intervention and a more proactive approach.

Over and above the capacity grant of R100 million, the reason for the intention to withhold the grant was that the Department wanted to know the correlation between outcomes and expenditure. They wanted an explanation for why only 17% of the transferred budget had been spent from the provincial offices. The provincial offices already had the unspent money and before the national department transferred the next allocation, they wanted to know what had been done with the previous allocation and where the remainder was. They had asked all metros to account. Ekurhulweni had not spent R527 million -- three metros had spent 50% of their allocation in the last month. The Department wanted to know how they had spent 50% in the last month after failing to spend it over the year. Mr Chainee said they had not received a response. There were contractual reasons and inter-governmental commitments.

He confirmed that finishes did include windows, doors and painting.

The Free State’s spend per unit would be investigated and reported on.

Ms Lucy Masilo, Chief Director: Finance, DHS, explained that it had been a MinMec decision that provinces should send their applications via the National Housing Finance Corporation (NHFC). Most provinces went via the NHFC, but had a lot of challenges, especially with courier delays and had decided to apply directly. Gauteng was now the only province still working with NHFC offices, since it was closer. It was then suggested that the provinces arrange suspense accounts with banks. Once their applications were approved, the money would be transferred into the suspense account. She explained that sometimes the money was transferred upon receipt of applications, but it was then declined. This had resulted in FLISP being higher than the approved budget, even though the money ended up going back.

The Chairperson said that she needed more clarification on why some provinces were not adhering to subsidy quantums. They would have to consult MinMec on these issues.

Special Presidential package for distressed mining communities: progress report

The Chairperson said on the oversight visit to Gauteng’s West Rand, they had seen the need for progress on the state of mining towns. The President had also requested an update, hence the Acting Director General’s absence.

Ms Pamela Sekhanyana, Director: Programme and Project Planning, DHS,said the president was meeting all stakeholders in mining on 8 September to take stock of progress regarding implementing the framework agreement for a sustainable mining industry. Human Settlement’s commitment was to accelerate efforts to improve the living and working conditions of mineworkers. Housing remained the key challenge and provision of bulk infrastructure services would be the focus. The DHS was working on Human Settlements’ mining town strategy, linked to housing subsidies and grants offered to mineworkers. The aim was to align it with its own interventions. Partnerships with sector departments, mining companies, and the private sector would be a focus area. The operational model would focus on integration and alignment of various initiatives to ensure overall transformation in the sector. They would fast track existing projects, focus on municipal planning and alignment, identify gaps and further work required, and align and support other government department initiatives. The two key components to ensure proper implementation were programme management from the national department to all municipalities and provincial and project level technical and capacity support per province and in identified towns. They would support the existing mega-projects like the N2 Gateway and Zanemvula.

Ms Sekhanyana said she would highlight only the challenges, but the presentation had the mitigation measures alongside each challenge.

The challenges they were facing were a lack of planning and pipelining of projects. Provinces and municipalities were not prioritising informal settlement upgrading. Capacity at municipal level was lacking. There was a challenge in negotiations with mining companies where they were previously only asked to donate land, and now the DHS was asking them to bring more to the table, like bulk infrastructure interventions. Consultation and communication with communities involving all role players and all sector departments was required to develop a communication strategy. Access to traditional land authorities through rural land reform needed to be unblocked. The application of policies to address the complexities of integrated projects was a challenge. The Living out Allowance (LoA) enabled mineworkers to seek decent accommodation. The DHS had found a strong correlation (about 40%) between people receiving the grant, but living in informal settlements and sending the money home.

Project update showed how the Department had developed a project-ready matrix to track project details and find blockages. She shared the progress on upgrading informal settlements. The assessment was categorised into four areas. Out of the total number, 35 would receive full upgrading, 63 would receive interim basic services, 22 would receive emergency basic services and 107 would be rapidly relocated to available or imminently available sites.

She said they were having challenges in Gauteng and Limpopo with regards to delivery and expenditure. They had signed an implementation plan with Gauteng.

Rural housing loan funding had been provided in mining town areas as from March 2015, and the bulk of units in Mpumalanga and Rustenburg were mortgaged.

The National Urban Reconstruction Housing Agency (NURCHA) provided bridging finance to small, medium and established contractors who build low and moderate income housing and related community facilities and infrastructure. As at 31 July 2015, they had awarded eight affordable housing loans and eight subsidy loans.

Social housing would form an important part of the strategy. The DHS was in the process of resolving zone restructuring and creating affordable housing opportunities. The rental market dynamics in a mining town were complex, as there were job losses in the sector. This project aimed at delivering 4 131 units.

The following partnerships with mining companies were being concluded: Anglo Platinum in Thabazimbi, Lonmin in Marikana, BHP Billiton in Hotazhel. Recommended projects had been submitted to the Minister for consideration. A map of the spread of private sector-funded catalytic projects was shown. After analysis, the DHS divided the mining towns into strategic clusters and created interventions for each cluster.

Ms Sekhanyana said the DHS was intent on understanding property markets in mining towns, measuring growth, trends, opportunities, identifying policy implications and enticing private sector investment. There were 22 mining towns in six provinces. In some instances, one town could have three markets -- privately traded houses, government-sponsored housing, and an informal settlement. The challenge was to integrate the housing markets.

The DHS was drafting and consulting for transformation plans for the Northern Cape, Lephalale/Thabazimbi, Sekhukhune, and Matlosana.

She gave an update on the Marikana Extension 2 project. Lonmin mine had donated 50 hectares of land to the Rustenburg local municipality in the Bojanala district. The land would yield about 2 600 units. The project had hit a few challenges but the committee was engaged with the involved parties. One of the main challenges was that the agreement between the mine and province was that the project would benefit the whole community, but mine workers did not qualify for Breaking New Ground houses as they earned more than the threshold. There was tension between the community and mine workers regarding who must occupy the houses, including illegal invasions as an unintended consequence. To address this, the best option was to convert the community residential units to rental housing to mitigate invasion risk. A recommendation had been made to the Minister of Human Settlements to provide an in-principle approval to use Marikana Ext 2 as a pilot project to test the new Rental Housing Delivery Model in mining towns, and to extend it to other mining towns, should it succeed.

DHS identified these key implementation enablers for the Marikana Ext 2 project:

  • Ensure the department had a strong presence in the province and municipalities to provide support;.
  • Dedicated programme management support to strengthen capacity;
  • Review policy on qualification and allocation for better options for mineworkers;
  • Communication and social facilitation strategy and stakeholder engagement and alignment;
  • Establish project steering committee;
  • Clear roles for other government departments in restoring dignity in Marikana.

Operation Mining Phakisa had been announced by the President, aiming to build a relationship between the government and key stakeholders to unlock investment and transformation. From the DHS, it needed focused implementation plans and viable property markets, specific projects, funding tenures, migrancy, policies, zoning, capacity, political will, and sustainability.

A benchmarking study tour to Australia had been supported by the Australian Government and led by Department of Planning Monitoring and Evaluation (DPME), titled ‘rapid appraisal of policy and regulatory system governing the mining sector, benchmarking performance in South Africa, Chile and Zambia.’ The participants had been the Minister of Presidency and Labour, the Deputy Minister of Labour, Members of Parliament (the Committee Chairperson and one Committee Member) and senior government officials.

A symposium would be held on 16 September 2015, where the findings and recommendations would be presented.

Ms Kailash Bhana, Chief Director: The DPME shared the concern over expenditure in Limpopo and Gauteng. The DPME would like to see provinces pay attention to long term planning. They also proposed a long term strategy for mining towns that included planning around property market fluctuations, and the downturn in commodity markets affecting labour and retrenchments, as they had implications on how they invested in mining towns. The lesson that had emerged from the study tour was that mining companies took responsibility for housing their workers in Australia. She believed mines should negotiate different terms on how they housed their workers. The DPME would investigate how the Living out Allowance linked to other incentives. There needed to be a proper supply of rental units. There was no supply of rental stock currently.

Discussion

The Chairperson said she was happy that a service level agreement had been signed with Gauteng. Their West Rand oversight visit had revealed that the Office of the Presidency had been there, but not the Department. She remarked that bulk infrastructure was a big problem. Projects and towns had been identified, but the lack of bulk infrastructure delayed implementation.

Mr L Khoarai (ANC) said capacity building was not happening. He asked who had started the project only to realise now that others did not qualify. He asked where the project in Moqhaka was, and which mine they were working with. He knew that there were no hostels in Maqhaka, so mineworkers had to commute.

Mr Gana said what the Department was saying regarding Marikana was worrying. Firstly, police had killed people and then Lonmin had donated land to those that were not killed, and when the Department went to the donated land, first thing it did was to erect a board. The board indicated the target market as those earning between R0 and R5 000, so they knew from the outset that mineworkers would not qualify. Now the Department was saying they were launching a pilot rental housing project, when they knew that mineworkers did not qualify. He had asked the Minister about this matter and got long-winded response. The response was that those that qualified were in the R0-R3 500 income bracket. He had asked if mineworkers would benefit from the project, and the response was that mine workers who earned more qualified for FLISP, which had a higher threshold. He further found out that 34 units were earmarked for FLISP. The workers were not allowing anyone to move in because when the land was donated, they were made to believe that they were going to benefit. He asked who was responsible for planning, and whether the workers had been consulted. The project should benefit the community, including mine workers. He feared that the people responsible for this would have no consequences levelled against them. He said none of the instruments were geared towards mineworkers.

Mr M Shelembe (NFP) asked for clarity on whether the stakeholder engagement had included employee representation, or just Lonmin and the municipality. He was not clear on how the Living out Allowance from the mining company was calculated. If it was deducted directly from the wages, what about those that had an alternate place of living and could use the money in a better way?

Mr Sithole said he was at Khutsong and had seen major infrastructural challenges. He asked what the Department was planning to do to help the municipality with bulk infrastructure. He also wanted to know how many workers were not benefiting from the houses being built, specifically in the West Rand area. He asked where in Randfontein the 748 units were that had been delivered. Lastly, he would like to know how far the negotiations with mine companies were over land donations.

Mr H Memezi (ANC) made an appeal to the Committee Members to avoid comments that were not helpful. He asked that where people had lost their lives, matters be treated with caution. It should be clear that Members of Parliament were very sorry that the killings had taken place, but should avoid politicising the matter. He believed mines should train employees better and deal with labour issues better. The report was helping the Committee to come up with proposed options for mineworkers. It was proper to appreciate where there had been progress. He saw the need for timelines in each area to be able to see the schedule of activities. The people should be aware of the timelines and when their situation would be attended to. It would also assist when the Committee was doing oversight visits to see targets better. It was important to remember that the miners had created the townships and the people that were there were the children of mineworkers. The DHS must ensure integration of communities because if they separated mineworkers from community members, it then created hostility. The aim was to unite South Africans. He commented that generally the report was not different from quarter one report, and it indicated that the Department was not doing well.

The Chairperson asked why the DPME and the DHS did oversight visits alone and not as an integrated team. If they went as an integrated team, it would make progress easier.

Response

Mr Chainee explained that the intervention in mining towns was about integration and redressing social issues. This involved integrating labour giving, labour receiving and existing communities because mining benefited the entire town. The Department had been taking steps over the years and taken the responsibility for households in mining sectors being provided with adequate shelter. The study tour had revealed that companies took responsibility for workers’ well-being. South Africa was amongst the very few countries that had private sector partnerships.

The Marikana Ext 2 project would encompass different tenant options. Unfortunately it had not been done holistically. If it had, then the tension would not have arisen. In trying to integrate the communities and workers, they could not adopt a rigid policy -- they must be able to tweak it. At the time of developing the Community Residential Units (CRUs), they were doing so according to a policy. They had found the policy not to be applicable and were agile enough to deal with the policy. He said it was important that they were able to repair and bring together the community in Marikana.

To deal with the lack of bulk infrastructure on the West Rand, the department would ask National Treasury to include it as part of the ring-fenced spending. If there were bulk shortages, they would deal with it with that money.

Ms Sekhanyana showed the Marikana Ext 2 land layout that had over 2 000 units. The agreement signed with Lonmin, province and the municipality was that the project would benefit the whole community. The understanding was that the green region on the map would be FLISP and social housing, and that was where the mine workers would be accommodated. This recommendation was to solve the current problem. The DHS had tried to bring stakeholders together. The steering committee included the national department, provinces, municipalities, Lonmin, community representatives and unions, with the aim of reaching common ground. So far they had met twice and agreement in principle had been reached. The living out allowance was a proposal. The bottom-line was that for the first time, they were sitting together to reach a collective agreement. The number of mineworkers who would not benefit was still being determined.

Ms Bhana said there were policy gaps regarding mineworkers benefiting from state-assisted housing. When the inter-ministerial committee (IMC) was set aside, it became apparent that there was a policy vacuum of miners qualifying for social houses. Generally, miners earned more than average workers, which created complexities when addressing how the state assisted mineworkers while their policies targeted the poorest of the poor. People questioned why mine workers should benefit versus farm workers, for example. They had engaged all mining companies and unions to look at how to address living arrangements. The proposal was for employer-assisted housing programmes.

Social facilitation in Marikana had revealed how the people in communities had a sense of entitlement around scarce resources. The social facilitation strategy was about sharing information on allocations and policies, and affording decent rental options.

She said the LoA would be an agreement between the employer and employee. The DPME did not have much influence. The IMC had noticed the unintended consequence, and so it needed to be re-looked. There was no way that they could deduct from a worker’s salary to go to the rental agreement without the worker’s knowledge and consent. It was an option that had been discussed when looking at how to ensure that the allowance was used for what it was intended. Another issue was the indebtedness of mine workers. Their severe financial stress was a problem in qualification for loans in the open market.

Responding to the Chairperson’s concern, she said they did oversights as an integrated team. The base-line studies of the municipalities had been done by the Presidency, which was why they had gone alone to the West Rand. It was a research versus implementation issue.

Ms Odette Crofton, General Manager, Housing Development Agency (HDA) started by responding to the informal settlement upgrading projects. She said the 231 National Urban Settlement Programme (NUSP) settlements did form part of the 248 total. It was only in Rustenberg where numbers were different. The reason was that some settlements were initially prioritised during rapid assessments, but they had since decided to attend to all at once. All 248 were supported by the NUSP. The outstanding figures were from Steve Tshwete, and a list of names, status of planning and timeline of planning could be provided. Upgrading was the responsibility of the province and municipalities, but the DHA was working with them to prioritise. There was a challenge of 107 that needed to be relocated. It would not be quick, but a negotiated process where the communities would be involved in where they were going. The IMC had set up a mining town dedicated structure in each province -- both a technical structure and political structure. It had not been set up in all provinces. Free State and Limpopo were working well. Sometimes it was started by different bodies, and then they brought in other bodies.

Regarding bulk infrastructure, they were working with the Department of Water and Sanitation and Cooperative Governance and Traditional Affairs, where they got information on all the approved projects. The municipalities were out of sync with DHS projects. They were working towards aligning projects.

For the negotiations with mining companies, as mentioned, they had set up structures in the mining towns. They integrated the transformation plans with existing projects in the area. They were also asking for more than land, and more regarding infrastructure development. There was no beginning and end time to negotiations.

The Chairperson said the Committee would get clarity on other areas as the projects were unpacked. She released the officials from the meeting.

Adoption of minutes

The Chairperson said the meeting had been chaired by Ms Mnganga-Gcabashe and the minutes were accurate.

Mr Memezi proposed their adoption, and Mr Sithole seconded.

The Chairperson said they would be visiting metros in the Eastern Cape, Buffalo City and Nelson Mandela. There would be an update on interventions from the provincial department in Nelson Mandela municipality. The Committee were asked whether the briefing should take place before they departed, or in Buffalo City. They agreed to do it in Buffalo City.

The meeting was adjourned.

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